You are looking to rent an apartment or house in Israel. The first and most important thing on your list should be to find a place you where you wish to live and at the right price. But the terms and conditions of the rent should not be far behind.
Making sure it's the right neighborhood/community to fit your needs and those of your family, with good schools, synagogues, nice parks, shopping areas etc., is something you would do naturally. Unfortunately, however, people tend to think it ends there. The importance of reading and signing the contract are things which are often overlooked. Amazingly, sometimes no contract even exists.
Understanding the Contract
Take the case of Avrumi G. from Brooklyn, who is planning to get married during the summer, and is looking to rent an apartment beginning this fall. His fiance hears from her best friend that a distant cousin of hers is leaving the apartment she had been living in for a few years. They get the owner's name and number, give him a call, mail him a deposit and the deal is closed.
But wait a minute! What are terms of the rental? What's included in the price? How long is the lease for? What if they want to leave early or stay longer? Is the rent in shekels or dollars? What happens when the dollar rate goes up or down? Is the apartment fully or partially furnished? What is the condition of the furniture? Is there an air conditioner? Is it in working condition?
These are just a few of the many issues which must be dealt with IN ADVANCE and IN WRITING. You cannot afford to have arguments later over what was said or not said during that brief long distance phone call. There must be a clear and detailed contract which spells out all the details.
But wait a minute! What are terms of the rental? What's included in the price? How long is the lease for? What if they want to leave early or stay longer? Is the rent in shekels or dollars? What happens when the dollar rate goes up or down? Is the apartment fully or partially furnished? What is the condition of the furniture? Is there an air conditioner? Is it in working condition?
These are just a few of the many issues which must be dealt with IN ADVANCE and IN WRITING. You cannot afford to have arguments later over what was said or not said during that brief long distance phone call. There must be a clear and detailed contract which spells out all the details.
Having a contract is not enough. Often when a landlord faxes this young couple a 6-7 page contract and asks them to sign it, they find it's in Hebrew; not elementary school level Hebrew and not even advanced level Hebrew, but legal Hebrew. But it doesn't really matter what language it's in, since most people have no intention of reading it.
"Contracts are for signing, not for reading."
"It's much too long and complicated."
"Who has time to read those things?"
This is a big mistake. You must read the contract you are being asked to sign. If you don’t understand what it says, consult with someone who does. If you don't have time to read it, find someone to read it for you, but you should not be signing a contract before you read and understand what it says.
Let's get back to Avrumi G. and his fiance, - who are now Mr. & Mrs. G. – and fast forward two years. After buying their own apartment, they are now preparing to move out of the place they have been renting for the past two years. I received a phone call from a disturbed Avrumi who tells me that the landlord came by to do a walkthrough, in order to check that the apartment was in order before they leave. The next day the landlord handed them a bill for NIS 7,000 along with a long list detailing items that needed to be paid for, since "they were not returned in the condition in which they were received". According to the landlord, the amount of repairs and replacements will cost NIS 7,000, which he had already taken from the G's by cashing one of their deposit checks. Needless to say, 90% of the items on this list were either cases of expected wear and tear or had been broken to begin with. I asked to see the contract- which was of course in Hebrew- and discovered the following clause: "At the end of the lease, the landlord will perform a walk-through and prepare a list of any and all items that need to be repaired or replaced." And here comes the interesting part: "This list will be accepted as is and the landlord will not be obliged to prove the validity of his claims or the cost for any of the items. Costs will be deducted from the deposit check." I wish I could say I was able to help Avrumi, who was of course totally unaware that the contract he had signed contained such a clause. At this point there wasn't much left to do, except perhaps sue the landlord, which is a long and complex process - not always worthwhile.
Let's get back to Avrumi G. and his fiance, - who are now Mr. & Mrs. G. – and fast forward two years. After buying their own apartment, they are now preparing to move out of the place they have been renting for the past two years. I received a phone call from a disturbed Avrumi who tells me that the landlord came by to do a walkthrough, in order to check that the apartment was in order before they leave. The next day the landlord handed them a bill for NIS 7,000 along with a long list detailing items that needed to be paid for, since "they were not returned in the condition in which they were received". According to the landlord, the amount of repairs and replacements will cost NIS 7,000, which he had already taken from the G's by cashing one of their deposit checks. Needless to say, 90% of the items on this list were either cases of expected wear and tear or had been broken to begin with. I asked to see the contract- which was of course in Hebrew- and discovered the following clause: "At the end of the lease, the landlord will perform a walk-through and prepare a list of any and all items that need to be repaired or replaced." And here comes the interesting part: "This list will be accepted as is and the landlord will not be obliged to prove the validity of his claims or the cost for any of the items. Costs will be deducted from the deposit check." I wish I could say I was able to help Avrumi, who was of course totally unaware that the contract he had signed contained such a clause. At this point there wasn't much left to do, except perhaps sue the landlord, which is a long and complex process - not always worthwhile.
The Purpose of the Contract
The contract states the rights and obligations of both sides and protects them from being violated. Without a contract, you are nothing but a squatter, who can be thrown out tomorrow. What will protect you when a fight breaks out? How will you know who's right and who's wrong? The contract also includes (or should include) a clause regarding how to solve conflicts or arguments. For religious people, the ideal would be to have a local rabbi work things out. The worst would be to have to go to court. There are other options in between these two. This, like many other issues in the contract can and should be negotiated. You (usually) do not have to accept the contract as is. Even if it was prepared by the other side, you are an equal part of this contract and should try to make it as fair as you can. That said, you may encounter a landlord who is not open to accepting any adjustments to his contract. In a case like this, at least you know in advance what you are getting yourself into, so there are fewer surprises at a later stage.
Key Points
- Make sure the lease establishes clearly what's included in your rent and what is not. Property tax (Arnona), co-op committee fees (Va'ad Bayit), utilities and gardening fees are traditionally not included in the rent.
- Understand how, where, and to whom you pay the rent and bills each month. Is the rent deposited directly into the owner's bank account, or do you have to hand-deliver the check to your landlord or his attorney. I recently encountered a case, where the landlord overseas was demanding that the rent be deposited into his account in the US, while his attorney here was demanding that the money be given to him.
- Get clear on the documentation and monetary deposits you'll be asked to produce. For example: Will you need co-signers? Can the deposit be a check or does it have to be cash. Often the landlords ask for a few security deposits, one for the actual rent, and the rest for the various utility companies. Landlords will often request that all the bills be transferred into your name. While this is mostly for their own benefit, it will also prevent you from having to pay old bills which were left by someone else. In the case of Arnona, this will enable you to receive the discount you may be eligible for.
- Make sure to walk through the apartment with the landlord before you move in. Make a list of things which must be repaired or replaced. Even if the landlord does not intend to replace every single shutter, electrical outlet, cracked window or floor tile, make sure you point out (and even take pictures of) broken or damaged or badly worn items. If you are overseas and cannot do this walkthrough, find a friend or relative to do it for you.
- If you intend to sublease the apartment when you go away for vacation, make sure this is allowed in the contract.
- Insuring the contents of the apartment against theft, fire, etc. is up to you, but I do recommend at least getting "third party" risk insurance, in case a guest or your cleaning lady is somehow injured while in the apartment, and decides to sue you for damages.
Q: How much security deposit can a landlord take? What can it be used for?
A: Normally the security deposit is three months’ rent. It will be used if the tenants leave the apartment without paying all the rent they owe, or if they left debts to Arnona or any of the utilities.
Q: Do landlords have to allow a grace period for late rent before they charge late fees? Are late fees legal?
A: The landlord does not have to allow anything. However, a 7 day grace period is traditionally given. Late fees are legal, providing they are reasonable and are stated in the contract.
Q: When are landlords allowed to raise the rent? Are there rent control laws?
A: As long as the contract is valid, and assuming the contract states a set monthly rent, the price cannot be changed. However, as soon as the contract term ends, the sky's the limit: The landlord can raise the rent as high as he wants. While there used to be the Tenants' Protection Law, which protected tenants from the rent being raised unreasonably, this law does not exist anymore and therefore the landlord may raise the rent as high as he believes he will find someone crazy enough to pay.
Q: I would like to have an air conditioning unit installed. Who is supposed to pay for the unit and installation?
A: Again, these things can and should be dealt with in advance in the contract. If they were not, you can try to negotiate with your landlord. He might be willing to split costs with you or you may have to pay for it all. In any event, make sure you are getting what you paid for. In other words, if you paid for all of it, it belongs to you, and you should be allowed to remove it when you leave. In this case, make sure it's a unit which can be easily removed. If you paid for half of it, while you will not be allowed to remove it, make sure you're getting some sort of security in return, i.e. a 3 year lease without an increase in price. You may also try to put a clause in the contract, asking the landlord to reimburse you when you leave, after deducting an annual 10% devaluation. If all else fails, you may be able to get partial reimbursement by the tenants who take your place when you leave (though personally I believe the tradition of forcing the next tenants to buy your stuff, has gone a bit too far).
Getting Legal Advice
There are plenty of competent real-estate lawyers in Israel. Referrals and recommendations are good ways to choose a lawyer, so it's best if you can ask a friend or acquaintance who they have used and if they were happy with the service they received. Make sure the one you choose speaks your language, will be available to you and is experienced in this field. The attorney’s fee for a rental contract usually ranges from NIS 1,000 to one month's rent. This may depend on the seniority of the lawyer you use, but more often will depend on the amount of time the lawyer had to spend preparing the contract, amending it, negotiating it with the other side's attorney, and so on. The lawyer’s fees should also be stipulated in advance.In Conclusion
Renting an apartment need not be an unpleasant experience. You and your landlord can and should be friends. It just requires some planning ahead and dealing in advance with as many issues as possible to avoid having to argue about them later. Take the contract seriously. Read it, know what it says and sign it consciously when you're ready.
Avner Slater is a real-estate attorney, living in Ramat Eshkol with his wife Yardena and their children. He may be reached at SlaterEsq@gmail.com or by phone 02-5825210.
Note: This article is not to be considered as legal advice or opinion. For legal advice, please contact legal counsel directly.
(This article was edited slightly for the blogosphere.)
Can a landlord deposit the security cheque into his bank account at the beginning of the rental period with the promise he will return it?
ReplyDeleteI just learned from a friend there is something in israel where you can "buy the key" of an apartment and you cannot be kicked out of there for as long as you live... is called something like baal ha machteach or something like that. can someone explain that a little bit.
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