Do You Always Need a Lawyer -Even for a Simple Rental Contract?

Prospective tenants often choose to use off-the-shelf lease agreements. These are standard lease agreements that are provided by the real estate agent or purchased from a store or the post office.

The rationale behind using a standard agreement goes like this: “Hey, it’s only a rental agreement – what could go wrong? Why should I spend money consulting a lawyer?”

The following true story should explain why representation is important even for a simple lease. Identifying details have been omitted to protect client confidentiality.

Read the Contract. Read It Again.

I was approached by clients from an English-speaking country to represent them during contract negotiations on an apartment they were interested in renting for a year in Jerusalem.

They were not anticipating any difficulties and just wanted me to quickly double check the rental agreement sent by their prospective landlord’s lawyer.

When I read the draft lease agreement I found several disturbing items. The most worrisome were the following two issues:

  1. The contract omitted all clauses which would obligate the landlord to fix anything that broke during the term of the lease.
  2. The contract included a clause stating that the laws obligating the landlord to make repairs would not apply to this lease.

So, if the pipes burst and major plumbing work was needed (as can happen with an old building), or there was major dampness, or the shutters broke, my clients would be financially responsible for the bills. Either that, or they could choose not to fix the problem and live with the consequences of staying in an apartment which needed repairs.

The landlord’s lawyer was unavailable to meet or even discuss the lease until the morning of the day my clients were due to fly home.

At the meeting, which took place in the other lawyer’s offices, we were able to work out most of the issues with the contract. The one sticking point was the issue of repairs.

As a compromise position, the landlord’s lawyer was willing to include a clause in the contract stating that the landlord would repair anything which prevented the tenants from living in the apartment.

This was still unacceptable as far as I was concerned. What if, for instance, one of the two bathrooms required repair? It would certainly be possible to remain in the apartment with only one bathroom, but it would materially affect my tenants’ quality of life while there. If they rented an apartment with two bathrooms, I felt strongly that both should be available for their use.

The asking price for monthly rental was high to begin with, and my clients deserved to receive an apartment with no unreasonable preconditions.

The landlord, on the other hand, apparently felt that he should be able to sit back, get paid, and not deal with any problems which might arise. He wanted to laugh all the way to the bank at the expense of my clients.

The negotiations took the better part of the morning. Any compromises suggested by me, my clients or the real estate agent were rejected by their lawyer.

My clients do not speak Hebrew. The lease was written in Hebrew and all negotiations were in Hebrew. Throughout the entire meeting I translated the discussions and explained the ramifications of the issues and questions involved so that my clients could make an informed decision.

Shortly before the end of the meeting, I took my clients aside and asked them whether they would be prepared to walk away from the negotiations and lose the apartment. In negotiation lingo this is called a BATNA – the Best Alternative To a Negotiated Agreement.

I explained to them that the landlord was well aware that they were returning to their home country that day and that they were consequently under pressure to sign the lease. He was using this knowledge as his trump card in the negotiations, figuring that they would eventually sign under his terms because they didn’t have a choice.

Having considered their options, my clients decided to walk away from the deal and look for other apartments on another trip or explore the option of renting another apartment that they had already seen. They had already planned to return to Israel in August and would search then, despite the greater scarcity of rental apartments during the summer months as tourists arrive for sabbaticals or new immigrants look for their first home.

There is a concept in negotiation called “overplaying your hand.” That is what the landlord and his lawyer did with my clients. They believed that they had my clients over a barrel because they had a plane to catch. Indeed, that is probably why the landlord’s lawyer would not make himself available until that morning.

As I drove my clients back to their hotel after the meeting, we discussed what had happened and what their options were. Even though the deal fell through and they left that day without a lease agreement in hand, they were pleased that they consulted an attorney who was able to warn them of the dangers and pitfalls of that particular lease agreement.

I heard from my clients the following day. They decided to rent a different apartment that they had seen on their trip. The landlord of this apartment agreed that I could prepare the lease in English. I was able to negotiate a fair lease which was signed via fax, and now my clients have a place to live when they return to Israel in August.

All’s well that ends well.