Housing7 min read8/1/2026

Renting an Apartment in Israel: What Money the Landlord Is Not Entitled to Demand

“That is what the contract says” does not always mean that the demand is lawful. The 2017 amendment to the Rental and Borrowing Law, known as the Fair Rental Law, limits monetary guarantees, allocates expenses, and establishes deadlines for repairs and the return of the deposit.

Numbers and facts

•3 months’ rent — one of the guarantee limits
•⅓ of the rental term — the alternative limit
•30 days — the standard period for a material repair
•3 days — the period for an urgent repair
•60 days — the period for returning the guarantee

Not Every Bill Is the Tenant’s Responsibility

Section 25ט of the Rental and Borrowing Law, 5731–1971, lists the tenant’s payments: rent, arnona, water, electricity, gas, heating, and routine maintenance of the common property. However, the landlord may not directly pass on to the tenant the cost of purchasing or improving permanent systems and equipment unless the tenant requested the improvement. The tenant also cannot be charged for insurance of the apartment’s structure or for the landlord’s obligations to third parties. For example, if a real estate agent acted on behalf of the owner, the agent’s commission cannot simply be added to the tenant’s expenses.

The Deposit Is Limited, Even If the Contract Says Otherwise

The limit under Section 25י applies to guarantees that require the tenant to incur a monetary expense, including a cash deposit and a bank guarantee. Their total amount may not exceed the lower of two amounts: rent for one-third of the entire rental term or three months’ rent. For rent of 6,000 shekels per month over 12 months, the cap is 18,000 shekels; for a 6-month contract, it is 12,000 shekels. The parties cannot legalize an amount above the limit merely by signing the contract.

When the Landlord May Retain the Guarantee

The guarantee is not a reserve budget for the owner to repaint or renovate the apartment. The law permits it to be used only for unpaid rent, unrepaired damage for which the tenant is responsible, unpaid mandatory current expenses, or failure to vacate the apartment on time. The amount retained must correspond to the debt, the repair cost, or the contractual terms governing delayed vacating. Before realizing the guarantee, the landlord must notify the tenant in advance and allow a reasonable time to remedy the breach.

Breakdown or Damage: Who Pays for Repairs

The tenant is responsible for a defect caused by unreasonable use of the apartment and, as a general rule, must repair it at the tenant’s own expense. The owner must repair all other material defects at the owner’s own expense no later than 30 days after receiving a demand. If the defect makes normal living in the apartment impossible, the maximum period is reduced to 3 days. If the landlord fails to act, the law allows the tenant to arrange the repair and demand reimbursement of reasonable expenses or a proportionate reduction in rent; for a non-urgent breakdown, the owner should be notified before the tenant arranges the repair independently.

Return of the Deposit and a Small Claim

After the rental ends, the landlord must return the guarantee or its remaining balance, including any income derived from it, within 60 days after the apartment is handed over or after the debts specified by law are paid—whichever occurs later. If money is retained without explanation, it is useful to send a written demand stating the date the keys were handed over, the amount, and the deadline for repayment. The dispute may then be brought before the Small Claims Court, with the contract, proof of the deposit, the handover report, photographs, correspondence, bills, and receipts attached. The court will examine whether there was a statutory basis for the retention, whether notice was given, and whether the amount deducted corresponds to the actual debt or the documented repair cost.

FAQ

Can the landlord demand a deposit equal to four months’ rent?

A cash deposit or bank guarantee is subject to a limit: the lower of three months’ rent and rent for one-third of the rental term. Therefore, under a standard one-year contract, four months’ rent exceeds the statutory limit.

Must the tenant pay a special building committee fee?

The tenant pays for routine maintenance of the common property. However, payments for purchasing or improving permanent systems and equipment are not among the tenant’s current expenses listed by law unless the improvement was made at the tenant’s request.

Can the deposit be retained for ordinary wear and tear?

The law links the tenant’s responsibility to a defect caused by unreasonable use. It is not enough for the owner to label any scuffing as “damage”: the basis for retention and the repair cost must comply with the conditions prescribed by law.

Can the tenant call a repair professional and deduct the cost from the rent?

If the owner did not remedy a material defect within the prescribed period, the tenant may repair it and demand reimbursement of reasonable expenses or reduce the rent proportionately. For a non-urgent repair, the owner must be notified in advance; the law allows an urgent defect to be repaired without waiting.

What should be attached to a claim concerning an unreturned deposit?

The contract, proof of the transfer of money, correspondence, photographs from move-in and move-out, the apartment return report, and the demand for return of the deposit are practically important. If the landlord alleges damage or a debt, bills, receipts, and the notice of intent to use the guarantee will be relevant.

What to do next

Before handing over the keys, document the apartment’s condition, meter readings, and the absence of debts, and obtain written confirmation that the keys were received. If the deposit is not returned, request a detailed calculation of the amounts retained and preserve all correspondence; after the statutory period expires, the documents can be used to file a claim in the Small Claims Court.