blog.cat.realestate6 min read8/25/2026

Landlord Won’t Return the Apartment Deposit: What May Be Withheld and When It Must Be Paid

In Israel, a deposit cannot be turned into a blanket penalty for scratches, cleaning, or a dispute with the tenant. The Lease and Loan Law, 1971 limits the grounds and amounts that may be withheld, requires prior notice, and establishes a deadline for returning the balance.

Numbers and facts

•60 days—the general deadline for returning the security
•Up to 3 months’ rent—one of the limits
•30 days—the ordinary deadline for the landlord to repair a defect
•3 days—the deadline for an urgent defect
•₪18,000—the limit for rent of ₪6,000 under a 12-month tenancy

The Deadline Is Not Calculated Only from the Move-Out Date

Under Section 25J of the Lease and Loan Law, 1971, the landlord must return the security or its balance, including any proceeds derived from it, within 60 days after the apartment is returned to the landlord’s possession. If the tenant still has debts specified by law, the period runs until the date they are paid—the later of the two dates applies. Therefore, handing over the keys without documenting the date may complicate a dispute. It is better to prepare an apartment return report, record the meter readings, and obtain confirmation that the keys were delivered.

Four Grounds for Withholding

The landlord may realize the security for unpaid rent—up to the amount of the debt, with linkage and interest if provided for in the agreement. The second ground is the cost of repairing a defect caused by unreasonable use of the apartment and not remedied by the tenant. Unpaid current charges owed by the tenant may also be covered: arnona, water, electricity, gas, heating, and ordinary maintenance of the common property. Finally, if the apartment is not vacated by the end of the tenancy, the amount specified under the terms of the agreement may be charged.

Wear and Tear Is Not Automatically the Tenant’s Debt

Section 25H makes the tenant responsible for defects caused by unreasonable use. Other defects, unless they are minor, must be repaired by the landlord at the landlord’s expense: generally no later than 30 days after a demand, and an urgent defect that prevents normal living—no later than three days. Therefore, a single photograph of a stain or an old faucet is not enough: it is important to establish the apartment’s condition at move-in, the cause of the damage, and the actual cost of repair. Withholding the entire amount without a calculation, invoice, or estimate is significantly harder to justify than a specific documented expense.

The Landlord Must Give Notice Before Taking the Money

The law requires the landlord to notify the tenant, a reasonable time in advance, of the intention to realize the security and to give the tenant a reasonable opportunity to remedy the breach. In practice, the notice should clearly state the ground, the amount demanded, and how the problem can be remedied: paying a bill, settling the debt, or repairing the damage. In a dispute, the agreement, the apartment condition report, photographs from before move-in and after move-out, correspondence, invoices, receipts, and proof of payment of utility charges will be important. The court will also assess the connection between the damage and the tenant’s actions, the proportionality of the withholding, and compliance with the notice procedure.

How to Demand the Money Back

First, the tenant should send the landlord a written demand stating the date the apartment was returned, the amount of the security, the expiration of the statutory period, and the tenant’s bank details. It is useful to attach the handover report, photographs, confirmations that there are no outstanding debts, and a request for a written calculation of each withholding. If no agreement is reached, the dispute may be referred to mediation or a monetary claim may be filed in court, with the agreement and the complete chronology of the correspondence attached. For Tel Aviv residents, the municipal Mediation and Dialogue Center offers free mediation between tenants and owners.

The Deposit Amount Is Also Limited

For securities that require a financial outlay by the tenant, including a cash deposit and a bank guarantee, the maximum aggregate amount is the lesser of two figures: rent for one-third of the entire term or three months’ rent. For example, under a 12-month agreement with rent of 6,000 shekels, both formulas produce a limit of 18,000 shekels. The restriction does not apply to every type of tenancy: the exceptions include student dormitories and an agreement of up to three months with no possibility of extension. The special rules also do not apply to certain other categories listed in Section 25O of the law.

FAQ

Can the landlord withhold the deposit for repainting the apartment?

Only if the need for repainting is connected to a defect caused by the tenant’s unreasonable use and the amount corresponds to the cost of remedying it. Ordinary deterioration in condition is not, by itself, identified by law as a ground for realizing the security.

Can the entire deposit be withheld because of an unpaid electricity bill?

Withholding is permitted only up to the unpaid amount. The balance of the security must be returned, and the landlord must notify the tenant in advance and give the tenant a reasonable period to pay the debt.

When do the 60 days begin if the final water bill arrived later?

The law uses the later date: the return of the apartment to the landlord or the payment of the tenant’s debts specified by law. Therefore, a late final bill may postpone the time for returning the security, but it does not permit an unjustified amount to be withheld without a calculation.

What should be done if no apartment condition report was prepared at move-in?

Gather alternative evidence: dated photographs, messages to the landlord about pre-existing defects, videos, witness testimony, and repair requests. The absence of a report does not terminate the parties’ rights, but it makes a dispute over the cause of damage and when it occurred more difficult.

Can the deposit be withheld for building insurance or major building repairs?

Section 25I does not make the tenant responsible for insuring the apartment’s structure or for expenses related to purchasing or improving permanent systems. The tenant is generally responsible for current services and ordinary maintenance of the common property, not capital improvements.

What to do next

Document the date the apartment was handed over, its condition, and the absence of outstanding current charges, then request a detailed written calculation of the withholdings. If the 60-day period has passed or the grounds are unsupported, retain all correspondence and consider mediation or court collection, taking the amount and documents into account. This is general information, not individual legal advice.