A lease agreement set that the leased house in a good condition but during the lease, for circumstance not related to the lessees, the house burned to the ground and the lessor demanded that the lessees pay for the difference between the insurance proceeds and the value of the house.
The Court rejected the claim and held that the lessees are not liable for the fire damage. Pursuant to the Israeli law, the responsibility of the lessee towards the lessor is as the responsibility of a paid custodian, when the main purpose of the possession of the property by the lessee is not guarding it, but residence, in which case the lessee is exempt from responsibility for damage not caused by its own negligence. Here, due to a fire that broke out in the rented property from an unknown source, the lessees could not meet their obligation according to the lease agreement to return the leased property clean, in good condition and intact. As the fire did not break out due to the lessees’ negligence, the lessees cannot be held accountable for the fire damage, despite the stated in the lease agreement and need not pay damages.