Lease Agreement: Clauses That Should Raise Red Flags

Finding a suitable apartment is exciting, but reviewing the lease can be daunting. Even when clauses seem unfair, negotiating without jeopardizing the rental can be difficult. A standard lease is not always straightforward, and legal assistance is not always readily available or affordable. However, understanding essential lease provisions is crucial for tenants.

This guide clarifies mandatory lease clauses and those raising red flags. A sample lease agreement is also provided: Sample Lease Agreement.

Below, find a standard, fair, unprotected tenancy agreement in Word format. A standard lease agreement forms an excellent foundation for a fair contract.

Understanding the Fair Tenancy Law

The Fair Tenancy Law, enacted in 2017, amended the existing Rent and Loan Law (from the 1970s). This amendment followed various events and societal shifts, notably the 2011 social protests against escalating housing costs. Illustrative of the change: previously, a 5-bedroom apartment in North Tel Aviv cost approximately 1.5 million NIS; today, a 3-bedroom apartment in Southern Israel may cost more.

These protests highlighted the inadequacy of existing legislation regarding the housing market, particularly rental properties. The amendment to the Rent and Loan Law followed approximately six years later.

Important Note: The Fair Tenancy Law does not apply to all leases. See the list of exclusions: Exclusions from the Fair Tenancy Law.

Even After Signing: Lease Terms Cannot Waive Tenant Rights

A key provision of the Fair Tenancy Law, Section 25(d)(2), states that most clauses cannot be waived except in the tenant’s favor. For example, the law caps deposit amounts; a clause demanding a higher deposit is void, but a clause demanding a lower deposit is valid because it benefits the tenant.

Even signed clauses contradicting the law are unenforceable; the tenant prevails in such disputes. Information on security deposits (security checks, bank guarantees, etc.) is available here: Security Deposits in a Lease Agreement.

Mandatory Lease Clauses Under Law

Section 25(g) of the Rent and Loan Law mandates the following clauses in a lease:

• Property address;
• Parties’ details (full names, ID numbers, contact address);
• Description of the property, furniture, and fixtures, including any adjoining common areas;
• Lease term, including any extension options;
• Termination rights and conditions;
• Rent amount, payment schedule, and method;
• Additional charges (e.g., maintenance fees), if any;
• Known material defects (e.g., dampness, leaks, broken windows);
• Any known factors affecting property use (e.g., planned nearby construction).

Lease Clauses Raising Red Flags

While individual preferences vary, common problematic clauses are highlighted below. These indicate a non-standard lease.

“Tenant Responsible for All Repairs”

Section 25(h) of the Rent and Loan Law addresses repair responsibilities. Remember the rule on waiving tenant rights? This is one. The landlord is obligated to repair material defects interfering with normal use, regardless of when they appear. This applies if all the following conditions are met:

1. Damage not due to tenant misuse (including under the Guardianship Law, 1967);
2. Defect is not minor;
3. Tenant notified the landlord;
4. Property is not a long-term lease (over 25 years).

See our detailed guide on repairing defects: Repairing Defects in a Rental Property.

“Tenant to Deposit 50,000 NIS Bank Guarantee and Security Check”

Section 25(i) of the Rent and Loan Law allows landlords to demand various security deposits. While a security check requires no upfront payment, others (bank guarantees, cashier’s checks, cash deposits) do. The law limits these, based on whether they involve tenant expenses: The total amount cannot exceed the lower of:

1. One-third of the total rent for the lease term;
2. One month’s rent.

For more on security deposits: Security Deposits in Lease Agreements.

“Failure to Pay Rent Results in Full Debt Payment”

Many landlords include clauses where a missed payment triggers full rent payment, contradicting sound practice. Section 25(i)(c) of the Rent and Loan Law specifies when and how a landlord can use security deposits:

1. Unpaid rent: up to the unpaid amount, plus interest;
2. Unrepaired tenant-responsible defects: up to repair cost;
3. Unpaid additional charges: up to the unpaid amount. These include rent, taxes, utilities, and maintenance fees;
4. Non-vacated premises: as specified in the lease.

“Tenant Inspects and Waives All Claims”

While tenants should inspect, this clause is problematic. A reasonable inspection doesn’t require extensive investigation. The clause should be amended to exclude hidden defects or those not reasonably visible.

“No Early Termination Clause”

Landlords often prohibit early termination. Although not legally mandated, life is unpredictable. A reasonable clause should allow early termination with sufficient notice (usually two months) and a suitable replacement tenant.

“Full Rent Payment Regardless of Early Termination”

This is unfair; early termination could be due to landlord actions or unforeseen circumstances. A better clause would state “full rent is payable except in circumstances beyond the tenant’s control or due to a breach of contract by the landlord.”

Addressing Problematic Clauses

Discuss these clauses calmly with the landlord, emphasizing their importance. Refer to relevant laws, highlighting that these are not arbitrary requests, but fundamental aspects of fair rental agreements.

Most importantly: don’t be afraid. Even if it feels like there are no available apartments, there are. A fair landlord and a good relationship are as important as the location or appearance of the apartment. Careful consideration is crucial.