Legal Updates

A lease of less than five years does not need to be in writing or signed

April 27, 2025
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An apartment owner sought to forfeit the bank guarantee given to her by the tenant when the tenant withdrew from the lease a week before she moved in, contending that the agreement was not signed but only negotiations took place and drafts were exchanged between the parties.

The Court dismissed the tenant’s claim to declare the lease agreement non-binding.  The Israeli Contracts Law states that a contract can be made orally provided that existed an offer and acceptance, the parties' consent and specificity. The Israeli Real Estate Law adds that a lease agreement for a period of less than five years does not need to be in writing.  Here, the parties exchanged drafts and even agreed on all the terms of the lease, including the lease period, monthly rent, collateral, remedies, the method of paying the rent and the details of the leased property.  The tenant had no comments after receiving the draft of the amended lease and  even submitted a bank guarantee and received a key to the apartment.  Therefore, the contract is binding even though it has not been signed and will compensate the landlord for withdrawing from the agreement.

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