New Court Ruling Prohibits Short-Term Apartment Rentals

A precedent was handed down in a lawsuit filed by the housing committee of a condominium building in Tel Aviv against a foreign resident holding the title to one of the 19 residential apartments in the condominium building. The suit stemmed from the resident’s habit of letting out his apartment for short-term rentals on a near-daily basis.

The court ruling was based on the condominium building’s house regulations, which include provisions regulating the management and maintenance of the building and which relate, inter alia, to the permitted uses of the residential apartments. Within this context, the house regulations include a clause prescribing that “the residential apartments shall be used solely for residential purposes, and not even for mixed uses.”

Highlights of the court ruling:

1. The condominium building’s house regulations apply to all apartment owners, and its provisions are also binding upon those who purchased their rights in the building after it was registered, such as the defendant, who purchased his apartment subsequent to the registration of the house regulations.

2. The intention of the term “residential use,” as worded in the condominium building’s house regulations, is to permanent use or to long-term leases (of several months at the very least) and not to apartment rentals at intervals of merely a few days.

Furthermore, under the circumstances of the case to which this ruling refers, and considering the character of the building, which is a new, modern residential building constructed at high standards and providing many innovative and “sophisticated” shared facilities, it indeed appears that this was also the parties’ intention when they drafted the aforesaid provision in the condominium building’s house regulations.

3. In light of that stated above, the court accepts the plaintiff’s plea and rules that the defendant must cease and desist from letting out his apartment for short-term daily/weekly rentals.

It is important to keep in mind that this ruling relates to a particular case, in a unique building, in which there was a special provision in the condominium building’s house regulations, and to an apartment owner who purchased his apartment after the house regulations were already registered.

Nevertheless, this ruling also underscores the provision in Israeli real estate law whereby once a condominium building’s house regulations have been registered, they may not be amended in a manner that prejudices the rights of any apartment owner without receiving his or her express prior consent.

This case emphasizes the importance of engaging with professionals to perform preliminary legal examinations before purchasing, letting out, or renting a property, including an examination of the condominium building’s documents and the provisions of the house regulations.