Israel Implements New Tenant Rights Rules on Repairs, Deposits, and Early Lease Termination

Israel's rental market continues to expand, with nearly one-third of the population living in rented apartments. To reduce common disputes between landlords and tenants, the Ministry of Justice has introduced new default contract regulations that apply when lease agreements are silent on specific issues. These rules clarify responsibilities for repairs, deposit limits, rent increases during lease extensions, and procedures for early lease termination.

Under the new guidelines, landlords are responsible for fixing systemic defects and essential infrastructure problems such as electricity, water, and sewage. Tenants must notify landlords in writing of any defects. Urgent repairs affecting safety or reasonable use must be addressed within three days, while non-urgent issues have up to 30 days for repair. If landlords fail to act, tenants may fix the problem themselves and deduct the cost from rent, but only after providing written notice and reasonable time for repair. The rules distinguish between repairs and upgrades, with landlords obligated only to fix defects, not to improve or modernize the property.

Deposit amounts landlords can demand are capped at the lower of either one-third of total rent for the lease period or three months’ rent. For example, a one-year lease at 3,000 shekels monthly allows a maximum deposit of about 9,000 shekels. Landlords must return the deposit within 60 days after tenancy ends, including any accrued interest. Disputes over deposits often arise from disagreements about property condition at move-out, so tenants are advised to document the apartment’s state with photos and signed checklists at move-in and move-out.

Regarding rent increases during lease extensions, if the contract lacks explicit terms, rent hikes are limited to the consumer price index increase, preventing sudden large rent jumps. Courts have also shown willingness to allow tenants to terminate leases early if they find a suitable replacement tenant and the landlord unreasonably refuses to accept them. However, landlords can reject candidates with poor financial standing or rental history.

If tenants fail to pay rent or vacate on time, landlords must pursue eviction through the courts, with filing fees around 774 shekels plus legal costs. Additionally, if a rented property is sold during the lease, the new owner inherits the existing lease obligations, and tenants retain their rights unchanged. These new default rules aim to fill gaps in lease agreements, reduce conflicts, and provide clearer timelines and protections for both parties.