What guarantees are you still allowed to ask for?
Since the Fair Rental Law of 2017, what you may ask your tenant to put up is capped. The cap depends on your rent and the length of the lease — work it out here, then check what counts towards it and what does not.
Your legal cap
You may not go above
19,500 ₪
- Three months' rent19,500 ₪
- A third of the rent for the whole term26,000 ₪
The law takes the lower of the two.
The cap covers the cash deposit and the bank guarantee — the money the tenant actually ties up.
What counts towards the cap
The cash security deposit and the bank guarantee (ערבות בנקאית). These are the guarantees that genuinely cost the tenant money: they come out of their pocket or are frozen at their bank. That is exactly what the legislature set out to limit.
Add them together: it is the total that must stay under the cap, not each one separately.
What does not
The promissory note (שטר חוב) and personal guarantors (ערבים) are not capped, because they cost the tenant nothing as long as everything goes well. That is the room you have left if the cap feels tight.
In practice a careful owner combines a deposit at the cap with a promissory note backed by a guarantor. You stay within the law and you are covered beyond it.
The rules your contract cannot set aside
Repairs that do not come from unreasonable use are yours to pay for, within a reasonable time and no later than 30 days from the request — 3 days if the fault makes the flat unliveable.
Building insurance is yours, and you cannot pass it on to the tenant. Nor can you charge them the fee of the agent you hired.
The flat must be fit to live in under the First Schedule of the 1971 law: connected to drinking water, electricity and drainage, ventilated, naturally lit, with doors and windows that lock.
A clause that contradicts these rules will not protect you: in a dispute the law prevails over the contract.
When the cap does not apply
Above roughly ₪20,000 of monthly rent the Fair Rental chapter no longer applies (the threshold is re-indexed every year).
It does not apply either to leases of three months or less with no renewal option, nor to anything that is not residential — an office or a commercial unit is outside it.
FAQ
Can I ask for a deposit and a bank guarantee at the same time?+
Yes, but it is their total that must stay under the cap. A two-month deposit plus a two-month bank guarantee goes over a three-month cap: that is unlawful.
Does a promissory note count towards the cap?+
No. The promissory note (שטר חוב) and personal guarantors are not capped by the law, because they tie up none of the tenant's money.
What happens if my contract goes over the cap?+
The clause cannot be enforced: you will not be able to call on the guarantee beyond the legal cap, and you expose yourself to a claim from the tenant. The rest of the contract stands.
When must I return the deposit?+
Within 60 days of the flat being vacated, less any sums the tenant genuinely owes you and that you can account for.
A contract that works the cap out for you
MyHoze writes your lease in Hebrew — the version that binds — with the English translation under every clause, refuses a guarantee above the cap, and has both parties sign it remotely.
Create my contractMyHoze is not a law firm and does not provide legal advice.