Knesset enacts Fair Rents Law

Rental apartment

The law defines housing that is fit to live in but does not include any restriction on raising rents.

The Walla! news website reported that the Knesset yesterday passed the Fair Rents Law on its second and third readings. The law amalgamates six private bills by MKs Roy Folkman (Kulanu), Stav Shafir (Zionist Union), Dov Khenin (Joint List), Orli Levi-Abekasis (Independent), Tamar Zandberg (Meretz), Yair Lapid (Yesh Atid), and Yael German (Yesh Atid). The law regulates relations between tenants and landlords, and defines housing fit to live in. It does not include any restriction on raising rents; the original version proposed four years ago contained such a clause.

The Fair Rents Law seeks to establish rules for residential leases aimed at ensuring fairer relations between the parties in a deal, to provide appropriate solutions adapted to the developing residential renting market, and to ensure a minimum quality of leased housing. Among other things, a residential lease is defined, various contractual aspects of leases are regulated, and housing unfit for residence is defined.

Several amendments were added to the law initiated by Folkman, among others, including a clause involving agents that stipulates that the landlord will pay the real estate agent's fee. Another clause restricts the guarantees that the landlord can demand to one third of the rent for each period, up to a maximum of three months' rent. Landlords are obligated to either make repairs on the housing unit themselves or pay for such repairs, if they have not been made within a reasonable time.

The law also states that housing unfit for residence is housing that unreasonably jeopardizes the tenant's health or safety, a housing unit lacking an electrical system, lighting, or sewage in proper order, and a housing unit lacking ventilation openings.

"The law - the most effective solution for high-demand areas"

Kulanu faction chairman Folkman said upon the passage of the law, "I am happy and proud to have brought, together with MK Stav Shafir, good news for renters in Israel. The law makes major changes in the rental housing market. Up until now, rental housing has not been considered an alternative, but when there are high-quality housing units for rent with an adequate level of maintenance, with regulated relations between landlords and tenants, it will constitute a real substitute for buying housing at too early a stage in life. This is the most effective solution for high-demand areas."

Shafir added, "The Fair Rent Law will finally bring order and fairness to the lives of two million Israelis currently living in rented accommodations. It was a long and hard road from the tent protests in 2011 to this moment, which makes the feelings now stronger. This law is the social protest. An entire generation, my generation, was subjected to impossible housing prices and forced into the rental market. For decades, Israel left this market lawless and unregulated. When I proposed this bill four years ago, there were more opponents than supporters in the Knesset. The generation gap was palpable."

"There is still a long road ahead," Shafir added, "and many more tasks on the agenda in order to solve the housing problem. Regulating the rental market, however, is a first and important step on the way in order to allow fair economic conditions for renters and lower the pressure in the housing purchasing market. It has been proven worldwide that a regulated public and private rental market, with proper rules and encouragement of long-term rentals, is an irreplaceable key to lowering housing prices. This law is proof that public pressure works. This law belongs to the public. It belongs to the tent protestors' generation."

Commenting on the final passage of the law, Tel Aviv-Jaffa Mayor Ron Huldai said, "The law is important news for two million tenants in Israel. This may not be what we were hoping for when we at the municipality put the legislative process in motion; an important mechanism for restraining price increases was removed, and passing the law took far too much time. Finally, however, Israeli law is defining housing that is fit for residence, and is dictating basic rules of the game between the tenant and the landlord."

Published by Globes [online], Israel Business News - www.globes-online.com - on July 18, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

Rental apartment
Rental apartment
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