< Back

Managing an Israeli Rental From Abroad

Q: Can I sign the lease from abroad?

Yes, either by signing a scanned copy that both sides accept or through a representative holding a limited power of attorney. Keep the signed original in Israel with the manager or your lawyer.

Q: Does the Fair Rental Law apply to short-term holiday rentals?

The law is aimed at residential tenancies and excludes certain categories. Short stays may fall outside it, but other consumer rules may apply. Check with your lawyer for your specific letting model.

Q: How much security can I ask for?

The Fair Rental Law caps the security by a formula tied to the rent. Ask your lawyer for the current cap before drafting the lease.

Keys and a lease agreement for a rented apartment in Israel

Renting out an Israeli apartment while living abroad is routine, but it works only when three things are in place: a reliable person in Israel who can show the apartment, handle repairs and collect rent; a lease that reflects Israeli law and practice; and an understanding of the Fair Rental Law 2017, which sets minimum standards for residential leases that the landlord cannot contract out of. This page explains each in turn so you can set up the arrangement once and run it with minimal intervention.

Choosing who manages the property

A non-resident landlord has three realistic options: a professional property management company, a local lawyer or broker who offers management as a side service, or a trusted relative or friend. Whichever you choose, agree in writing on:

Scope: marketing, tenant screening, lease signing, rent collection, repairs, inspections and end-of-lease handover.
Authority: the spending limit for repairs without your approval, and whether the manager may sign the lease on your behalf.
Money: where the rent is paid, how quickly it is passed on to you, and what reporting you receive.
Fees: a monthly percentage, a flat fee, a fee per new tenancy, or a mix; and what is charged for repairs coordination.
Documents: the manager should keep the lease, the entry inspection report, the deposit record and all repair invoices, and give you copies.

A manager who signs leases or holds rent for you should do so under a written power of attorney, limited to what is needed. Ask your lawyer to draft it.

What the lease should contain

Israeli residential leases are usually written in Hebrew and follow a familiar structure. A non-resident landlord should make sure the lease covers:

The parties, the apartment's identification by block and parcel, and the term with any option to extend and the rent during the option period.
Rent, payment dates and method, and whether rent is linked to the consumer price index.
Which running costs the tenant pays: arnona, electricity, water, gas, and the routine building committee fee.
Security: a bank guarantee, promissory note, deposit or guarantors, within the limits set by the Fair Rental Law.
An entry inspection report with photographs, signed by both sides, which is the basis for any deduction at the end.
Repair responsibilities, consistent with the Fair Rental Law's allocation.
Notice provisions, an address for service in Israel for the landlord, and the tenant's duty to allow access for inspection and for showing the apartment near the end of the term.

What the Fair Rental Law requires of the landlord

The Fair Rental Law 2017, enacted as an amendment to the Hire and Loan Law, applies to most residential leases and sets terms that a lease cannot override to the tenant's detriment. In outline, it:

Requires the landlord to deliver an apartment that is fit for habitation, and defines what makes it unfit, such as no functioning drainage, water, electricity or ventilation, or a danger to safety or health.
Places on the landlord the duty to repair, within a reasonable time, defects that are not caused by the tenant's unreasonable use, with shorter timeframes for defects that make the apartment unfit to live in.
Lets the tenant carry out an urgent repair and deduct the reasonable cost if the landlord does not act in time, subject to the conditions in the law.
Caps the security a landlord may demand from the tenant; the cap is defined by reference to the rent, so check the current formula.
Limits what the landlord may deduct from the security and requires notice to the tenant before using it.
Sets which costs are the landlord's and cannot be passed to the tenant, including improvements to the property and certain other payments listed in the law.
Requires a written lease that contains the details the law lists, including the parties, the term, the rent and the apartment's description.

Some categories of lease are outside the law's scope, for example very long leases or very high rents, and the thresholds are set in the law. Ask your lawyer whether your lease is covered.

Day-to-day operation from abroad

Have rent paid into your Israeli bank account by standing order so you can see it without relying on the manager.
Hold a small shekel reserve for repairs so the manager can act quickly.
Ask for a short written report after each inspection, with photos.
Keep the tax side in order: rent is Israeli-source income under the Income Tax Ordinance, and the track you choose affects what records you need.
Renew the structure insurance every year and tell the insurer the apartment is let.

Common mistakes

Signing a lease with security demands above what the Fair Rental Law permits, which makes that clause unenforceable.
Skipping the entry inspection report, so deductions at the end of the lease cannot be proved.
Giving a manager an unlimited power of attorney.
Letting the manager collect rent into their own account with no written accounting.
Ignoring repair requests, which lets the tenant repair and deduct under the law.

FAQ

Can I sign the lease from abroad?