No Limit on Rents in Israel

The new Fair Rents Law does not restrict Israeli landlords from raising rents, as had been proposed.

After months of debate and years of controversy, the Fair Rents Law passed into law on July 17 2017. The new law regulates the relationship between landlords and tenants by fixing certain terms for residential leases and creating minimum standards to ensure that rental apartments are fit for habitation.

Although the original version of the law proposed in 2013 included a restriction on raising rents, the final version of the Fair Rents Law does not actually limit landlords’ rights to request an increase in residential rental rates. It also only applies to homes that are rented out for periods of between three months and 10 years, and not to vacation properties.

The main changes introduced by the Fair Rents Law can be summarized as follows:


    Landlords must pay for property insurance, but renters are officially responsible for paying bills for utilities, municipal taxes (arnona) and day-to-day maintenance.


    Renters must pay for any damage that they cause to the property through “unreasonable use”. Owners are responsible for repair of damage caused by “reasonable use,” and must do so within 30 days. Urgent repairs must be carried out within three days, and if they are not then renters can deduct the cost of the repairs from their rent. The landlord must pay for anything that increases the value of the property.


    Landlords may not demand a guarantee or deposit of more than three months’ rent, and this money can only be used if the renter does not pay rent or other payments on time, or if they cause damage to the property, or vacate the property late.


    If the parties agree that the renter can continue living in the property after the contract date, either party can then end this extension arrangement with reasonable notice.


    Whoever hires a realtor to rent out or find a property must pay the real estate agent’s fee.

Shaun Isaacson, CEO of Creative Estates Israel, who is a qualified lawyer and licensed realtor involved in long-term rentals throughout Central Israel, welcomes the new legislation. “Landlords who already provide a good standard of accommodation, and whose properties are well-managed and maintained, are happy that this legislation has finally passed into law. The threat of rent restrictions was worrying for some Israeli property owners, but we are happy to see that the all-important relationship between landlord and tenant will be regulated without imposing unnecessary restrictions.”

It is estimated that 2 million people live in rented accommodation in Israel, and by regulating this market the government hopes to encourage long-term rentals as a comfortable and safe alternative to buying housing.

The “Tent Protests” in 2011 were in part protesting the lack of regulation at the bottom of the rental market, and the proposed regulations designed to create fair economic conditions for renters and reduce pressure in the housing market. The new legislation combines proposals from six private members bills submitted by Knesset members from various parties, and it is seen as a good compromise between the different interest groups represented.

For more information about Creative Estates rental property management service in Israel, contact Shaun Isaacson at or on +972 526521096. We will give you a price quote in complete confidence and without obligation.