A tenant knew the building was undergoing TAMA 38 works, but days after he got the keys, workers entered two rooms of the flat, while damp, mould and other defects came to light. The court held that cancelling the lease was justified and ordered the landlords to refund March's rent and compensate him, ILS 5,980 in total.
What happened
In January 2026 a lease was signed for a 3.5-room flat in a building undergoing a TAMA 38 project. The lease stated expressly that the tenant knew about the works, that the rent had been set with them in mind, and that he waived claims about the flat's condition. On the other hand, it also said the tenant's rights would not be harmed. The tenancy was to start on 10.3.2026, but the tenant received the keys on 3.3.2026 so he could move his belongings in and settle, in return for paying municipal tax (arnona) from that date.
After getting the keys, the tenant found damp and mould on the bathroom ceiling, peeling plaster, a broken window and faulty shutters. At first it was agreed that the landlords would deal with the mould, and he kept moving his things in. Within a few days he learned from a former occupant that the damp problem, coming from the flat above, had gone on for a long time; the landlady said the shutters would not be fixed because of the works; and workers entered two rooms, drilled and chiselled, and put up wooden planks and support props.
Through a lawyer, the tenant demanded to cancel the lease. The landlords rejected his claims but demanded that he vacate within three days, or pay ILS 400 for every day of delay. He moved out on 10.3.2026 and left the key with a neighbour the next day, as the landlady instructed. The landlords cashed the ILS 2,400 cheque for March and kept depositing further cheques. The tenant and his father sued for ILS 11,280.
The parties' arguments
The landlords argued that the tenant had viewed the flat several times, knew about TAMA and got a significant rent reduction. They said the damp had been repaired in the past and that they called in a professional as soon as it was reported. They also argued that it was the tenant who breached the lease, by not providing all the guarantees, not transferring the bills to his name and cancelling cheques, and that he had simply changed his mind. As for the father, they argued he was not a party to the lease.
The decision
The court first dismissed the father's personal claim: he had been involved at every stage and had even signed as guarantor, but he was not a party to the contract, and it was not shown that he suffered any personal loss or paid anything under the guarantee.
On the merits, the court distinguished between accepting the ordinary nuisance of living in a building under renovation, such as noise, dust and scaffolding, and accepting that some rooms of the flat could not be used. The lease did not mention works inside the flat, and its clause that the tenant's rights would not be harmed showed that his acceptance of TAMA was not unlimited. A rent reduction reflects expected inconvenience, not a waiver of reasonable use of the rooms. Under the Rental and Loan Law, a landlord undertakes to allow use of the property for the purpose of the lease, not merely to hand over a key.
The court believed the landlords that they too were surprised by the scope of the works and hid nothing, and held that the damp alone did not justify immediate cancellation, since they were entitled to a reasonable time to repair it. But the combination of circumstances, above all losing the use of two out of 3.5 rooms with no proven end date, amounted to a fundamental breach under sections 6 and 7 of the Contracts (Remedies for Breach of Contract) Law. A breach does not require bad intent, and the cancellation notice was given within a reasonable time, as section 8 requires. The landlords' own demand for immediate vacation strengthened this conclusion.
Since the cancellation was lawful and the flat was vacated on the very day the tenancy was due to begin, the landlords were not entitled to March's rent or to rent for any period after possession was returned, regardless of when the flat was re-let.
Compensation
- Refund of March's rent: ILS 2,400.
- First move into the flat: ILS 2,000, based on proof of payment. This expense was wasted because of the cancellation. No proof was offered for the second move, so nothing was awarded for it.
- Lawyer's letter: ILS 1,180.
Rejected were damage to a wardrobe (extent of the damage not proven), cleaning (no receipts), a courier (conflicting documents), electricity (not included in the statement of claim) and emotional distress. The Small Claims Court has no power to order the return of the cheques and guarantees, but the tenant may present the judgment in the enforcement and opposition proceedings.
The outcome
The claim was partly accepted. The landlords were ordered, jointly and severally, to pay the tenant ILS 5,580 plus ILS 400 in legal costs, ILS 5,980 in total, within 30 days. The father's claim was dismissed with no order for costs. A request for leave to appeal may be filed with the Central-Lod District Court within 30 days.
Key takeaways
- Renting in a TAMA 38 building? Ask for the lease to state whether works will take place inside the flat, in which rooms and for how long.
- A clause saying the tenant knows about the works does not cover every disruption. A clause saying your rights will not be harmed can work in your favour.
- Found a defect the landlord is willing to fix? Usually you must give a reasonable time before cancelling.
- Keep receipts and proof for every expense, such as moving costs. Without a document, the court will not award compensation.
- Someone who signed as guarantor or helped with the deal, but is not a party to the contract, usually cannot sue in their own name.
This article summarizes a published Israeli court decision in plain language and is not legal advice. Every case depends on its facts. The parties' names have been omitted. This is a first-instance decision and may be appealed.
