Lease Agreement: Clauses That Should Raise Red Flags

Finding the perfect apartment is exciting, but then the landlord sends a lease agreement that’s difficult to understand and negotiate. Even when clauses seem unfair, tenants may be unsure how to advocate for themselves without jeopardizing the rental. Standard lease agreements are not always standard, and legal assistance isn’t always readily available or affordable. However, understanding key aspects of lease agreements is crucial for all renters.

This article outlines essential lease clauses and red flags to watch for. It also includes: a sample lease agreement.

Below, you will find a standard, fair, unprotected rental agreement in Word format. A standard lease agreement provides a solid foundation for a fair contract.

Understanding the Fair Rental Law

The Fair Rental Law, enacted in 2017, amended the existing Landlord and Tenant Law (from the 1970s). This amendment resulted from various societal shifts and events, notably the 2011 social protest highlighting soaring housing costs. The contrast between then and now is stark: previously, a 5-bedroom apartment in North Tel Aviv might have cost 1.5 million NIS; today, a 3-bedroom apartment in Southern Israel might cost more.

The protests led to legislative recognition of the anomalies in the housing market, especially the rental market. The amendment to the Landlord and Tenant Law followed approximately six years later.

Important Note: The Fair Rental Law does not apply to all rental agreements. For a list of excluded tenancies, please refer to: this link.

Even if Signed: Lease Terms Cannot Override the Law to the Landlord’s Benefit

A key innovation in the Fair Rental Law is found in Section 25(14)(2) of the Law. This section stipulates that most crucial clauses cannot be altered except to benefit the tenant. For instance, the law sets a ceiling on security deposits. A clause requiring a higher deposit is invalid, but a clause requiring a lower deposit is valid because it favors the tenant.

Even if a signed clause contradicts the law, in a dispute, the tenant generally holds the stronger legal position. For information on security deposits (security checks, bank guarantees, etc.), please see this article.

Legally Required Clauses in a Lease Agreement

Section 25(13) of the Landlord and Tenant Law mandates that a lease agreement must include:

• Apartment address;
• Parties’ details (full names, ID numbers, contact address);
• Description of the apartment, furniture, and fixtures, including any adjacent common areas;
• Lease term, including existence and details of any extension option;
• Right to terminate the contract and termination conditions;
• Rent amount, payment due date, and method;
• Additional charges (e.g., building maintenance, management fees);
• Known material defects (e.g., dampness, leaks, broken windows);
• Any matter in or around the property that currently or potentially significantly impairs use of the apartment, and known to the landlord at the time of the contract. A common example is a nearby construction project (TAMA, new neighborhood development, etc.) that the landlord fails to disclose.

Red Flag Clauses in a Lease Agreement

While individual preferences vary, certain lease clauses are consistently problematic. These clauses, highlighted by frequent small claims court filings, indicate a non-standard lease agreement.

“The tenant is responsible for all repairs to the apartment or its contents.”

Section 25(16) of the Landlord and Tenant Law addresses “repair of defects in the rented property.” Remember that some clauses cannot be modified except to the tenant’s benefit. This is one such clause.

The law clearly states that the landlord is obligated to repair anything materially impairing the normal or agreed use of the apartment, regardless of whether the defect existed at the start of the tenancy or appeared later. This applies only if all the following conditions are met:

1. The defect was not caused by unreasonable tenant use (including under the Keepers’ Law, 1967);
2. The defect is not minor;
3. The tenant requested repair;
4. The property is not leased in perpetuity (over 25 years).

See this article for details on repairing defects.

“The tenant shall deposit a bank guarantee and security check totaling 50,000 NIS.”

Section 25(17) of the Landlord and Tenant Law permits landlords to request multiple security deposits (bank guarantee, security check, promissory note, etc.). While a security check doesn’t require upfront payment, other types do (bank guarantee, bank check, cash deposit). These require significant upfront costs.

The law therefore limits the amount: the total for such deposits cannot exceed the lower of:

1. Agreed rent for one-third of the lease term (e.g., 8,000 NIS for 2,000 NIS monthly rent over 12 months (4 months x 2,000 NIS));
2. One month’s rent.

For more information on security deposits, click here.

“If the tenant defaults on any rent check, the entire remaining rent balance becomes immediately due.”

Many landlords include such clauses, despite their illogical and unfair nature. Section 25(17)(c) of the Landlord and Tenant Law states that a landlord may only use security deposits under the following circumstances and amounts:

1. Unpaid rent: The landlord may use the deposit up to the amount of unpaid rent, plus interest and indexation as per the contract;
2. Unrepaired tenant-responsible defects: The landlord may use the deposit up to the repair cost;
3. Unpaid recurring charges: The landlord may use the deposit up to the amount of unpaid charges. According to Section 25(1)(a), “recurring charges” include rent, taxes (including property tax), utilities (water, electricity, gas, heating), and building maintenance/management fees;
4. Failure to vacate: The landlord may use the deposit as specified in the lease.

“The tenant inspected the apartment and waives all claims, including claims for non-conformity.”

Tenants should indeed inspect a property. This should involve a reasonable visual inspection for obvious defects, not dismantling walls or conducting extensive electrical/plumbing checks. A clause like this can be acceptable if modified to exclude claims for hidden defects or defects beyond the tenant’s reasonable ability to detect.

“No early termination clause.”

While not explicitly addressed by law, life is dynamic. A fair lease allows for early termination with reasonable notice (usually two months) and a suitable replacement tenant approved by the landlord.

“The tenant shall pay full rent for the entire period, regardless of early termination.”

This is overly broad. A fair clause would state: “The tenant shall pay full rent for the entire period, except in circumstances attributable to the landlord and/or contrary to the agreement.”

What to Do If Your Lease Contains Problematic Clauses

Negotiate with the landlord, referencing relevant legal sections to demonstrate the importance of these clauses. Even clauses not explicitly covered by law should still adhere to common rental practices. These aren’t minor points; they are fundamental terms governing typical rental situations.

Don’t be intimidated. Even if finding suitable housing feels impossible, it’s not. Finding a fair landlord and establishing a good relationship is as important as location or aesthetics. Careful consideration is key.