As the title of this Blog suggests, we usually discuss legal matters that have an international side to them. However, now and then, we allow ourselves to devote a post to a local, day-to-day, legal matter that is prevalent. In this post, a common landlord-tenant dispute will be the focus. In particular, when the landlord breaches his or her duty to repair, can the tenant unilaterally reduce the amount of rent he/she usually pays?
In Israel, the usual answer is "yes, the tenant may reduce the amount of rent to a sum that equals the amount the defect has on the value of the rental property." For example, if the rent value of the property without any defects is "X", and the rent value of the property with the defects is "X-Y", then the tenant is entitled to pay a monthly rent of "X-[X-Y]" until the defect is cured.
This is a statutory right provided for in section 9(a)(2) of Israel's Rental and Borrowing Act of 1971.
While this right is clearly provided for, in practice tenants should be aware of certain pitfalls that are common when the statute is improperly invoked.
First, in these types of cases there is always the problem of proving damages. Take, for example, a common repair problem such as leaking. A tenant who intends to rely upon section 9(a)(2) should make sure he/she she can prove the "true value" of the damaged property. In Israel, this is usually done with an expert opinion of a professional appraiser. The evaluation of the property should be specific as possible and relate to the actual property, not a general opinion of the effects of leaking on the value of a property. See Lister v. Pinner, Civ. App. 7783-02-18 (Dist. Ct. Tel-Aviv, June 6, 2018). That said, some courts have been more flexible in this regard and have allowed tenants to prove the true rental value without any expert evidence. See Di Veroli- Siani Engineering, Ltd. v. Atzmon Yaniv, Civ. Act. 17301/03 (Mag. Ct. Tel-Aviv, Dec. 12, 2005). Our suggestion is to play it safe and be equipped with a professional expert evaluation of the property by someone who has experience in this area.
Second, if the tenant has elected to remain in the property, despite the dire need of repair, he/she better have a good explanation of why. Courts have found that claims of damages are non-credible when they come from tenants who have remained in a property or exercised an option to extend the lease. See Lister v. Pinner.
Third -- and this may seem obvious-- the tenant must give the landlord an opportunity to cure the defect. The tenant must notify the landlord of the defect and demand that it be repaired. Failure to do so will prevent the tenant to later on invoke section 9(a)(2) to reduce the rent.
I hope this more practical post was interesting and helpful, even though it lacked some of the esoteric ideas that past posts included. As an international firm and practitioner, its important that we focus on other facets of the law as well, including real-estate law which, by its very nature, is as local, non-international, as it gets.
P.S. This post is for educational purposes only. The post should not be used as a substitute for competent legal advice from a licensed professional attorney.