Lease Agreements During Wartime: Continued Validity and Sample Lease Agreement

War and Lease Agreements: Operation Swords of Iron raised numerous questions regarding the impact of the operation on contractual obligations, particularly lease agreements. Each legal issue must be assessed individually; however, understanding the relevant laws is crucial. Property owners nationwide contributed to the war effort by providing housing for displaced persons. For convenience, we’ve included a downloadable [sample unprotected lease agreement (Word document)], tailored to the complex circumstances of Operation Swords of Iron. A [short-term lease agreement (not necessarily short-term)] is also available.

War Does Not Justify Breach of Contract

Contracts should be fulfilled in good faith. If contract fulfillment is possible (or approximately so), it should be done. Claiming a breach due to military operations is insufficient.

Even with a substantiated “breach due to war” claim, the likelihood of success remains low. Such a claim relies on the defense of “force majeure” or “frustration of contract” ([Section 18 of the Contracts (Remedies for Breach of Contract) Law, 1971]). The breaching party must demonstrate that circumstances prevented contract fulfillment beyond their control and reasonable foresight. This warrants exemption from enforcement or compensation.

To successfully claim contract breach due to force majeure or frustration, three cumulative conditions must be proven:

1. Circumstances rendered contract fulfillment impossible or fundamentally different from what was agreed upon;
2. At the time of contract signing, the breaching party was unaware and had no reason to be aware of these circumstances;
3. The breaching party could not prevent these circumstances.

The second condition is problematic when claiming frustration due to war. The Supreme Court has established that war is not an unforeseen event in Israel. Therefore, a claim of contract frustration due to war is generally unsuccessful. This precedent holds true even for major wars that severely impacted the country, from the Yom Kippur War to Operation Protective Edge. A security situation has not been recognized as sufficient grounds for contract breach.

“Legal Breach”: The Extension of Time Limits Law

A key reason for rejecting claims of contract frustration is the [Extension of Time Limits Law of January 1975. This law defines situations or contracts where deadlines are automatically extended or extendable via court petition.

For example, if someone is called up for emergency service at a time when they were required to perform an [action] or 30 days prior, they have an extension until 30 days after the end of their service ([Section 2(a) of the Extension of Time Limits Law, 1975]).

Accordingly, courts have ruled that if a legal solution mitigates deadlines during emergencies, it should be utilized. Information on time extensions concerning Operation Swords of Iron is available in this article.

Lease Agreement Breach During War: Separate Legal Considerations

Except for [special cases], most Israeli leases are governed by the [Landlord and Tenant Law]. Given the sensitive nature of housing, this law establishes a dedicated mechanism for exemption from payment ([Section 15 of the Landlord and Tenant Law]).

A tenant is exempt from lease-related payments for the period they were prevented from using the property if the following conditions are met:

1. The tenant was prevented from using the property for its intended purpose;
2. The prevention relates to circumstances connected to the leased property or access to it;
3. At the time of contract signing, the tenant was unaware and had no reason to be aware of these circumstances;
4. The tenant could not prevent the circumstances;
5. The tenant did not terminate the contract due to the prevention.

In other words, the same conditions for “regular” contract frustration must be met, plus two additional conditions (1 and 5). While claims of contract frustration due to security situations have been unsuccessful, the COVID-19 pandemic changed this trend. Courts recognized the pandemic as an unforeseen force majeure, but generally granted only partial exemptions to tenants.

Postponement of Deadlines in Lease Agreements During War – Operation Swords of Iron

On October 19, 2023, the [Law for Postponement of Deadlines (Temporary Order – Swords of Iron) (Contract, Court Ruling, or Payment to Authority), 2023] was published. This law specifies situations where certain payments can be postponed by eligible parties. For a list of those eligible, click here.

According to the law, the deadline for actions under a [lease agreement] is postponed by 30 days if the following conditions are met ([Section 2(a) of the Law for Postponement of Deadlines]):

1. The contract was signed before the relevant period (October 7, 2023, to November 7, 2023);
2. The payment is due during the relevant period;
3. The postponement applicant is included in the [list of those eligible for postponement;
4. The applicant or their representative notified other parties to the contract;
5. Other parties to the contract are not eligible for postponement.

If all conditions are met, there is no basis for claiming breach of contract.

Those eligible for postponement are also automatically entitled to a 30-day postponement of the following payments ([Sections 3 and 4 of the Law for Postponement of Deadlines]):

1. Payments to authorities (such as property tax, security fees, water, etc.);
2. Deadlines set in a final court ruling (e.g., an eviction order).

Sample Lease Agreement – Short-Term Agreement Adapted to the Security Situation

During security crises, many property owners rent their properties to displaced persons. Operation Swords of Iron left many without housing, either due to damaged homes or security concerns.

To balance assistance with property protection, we’ve prepared a sample short-term lease agreement.

We’ve also included a sample promissory note. And of course, a [sample unprotected lease agreement] is available.