The Tenant Protection Law grants tenants far-reaching rights and allows a key money tenant to be evicted in only a handful of cases.
In essence, a protected tenant is a tenant who is shielded, for the rest of his life, both from increases in the rent on the property and from eviction from it. It should be stressed that protected tenancy under the law applies to commercial buildings as well as to residential properties.
It follows that evicting a key money tenant is neither easy nor simple, and even where the legal grounds for eviction are met, the court will not always allow the tenant to be evicted.
Evicting a key money tenant therefore calls for the assistance and guidance of a key money lawyer. Adv. Avital Horef is an experienced attorney in sale, rental, protected tenancy and key money transactions. His law offices are located in Jerusalem and Tel Aviv, and he is regarded as a leading attorney in this field in both cities and beyond.
Adv. Avital Horef’s extensive knowledge and experience in evicting protected tenants allow him to pursue creative and effective courses of action that save you valuable time and money and achieve your goal in the best possible way.
In this article we will look at the eviction of a key money tenant, examine who qualifies as a protected tenant, and review the cases and grounds on which such a tenant can be evicted from the property.
Eviction of a key money tenant – who is a key money tenant and what are his rights?
The key money arrangement developed in the 1950s to help the masses of new immigrants who arrived in the country destitute to obtain cheap housing. It spared them from moving from apartment to apartment and allowed them to live in one place for many years, with the law on their side and no possibility of evicting them from their homes or raising their rent.
The term key money refers to a one-time sum of money the tenant pays the property owner when moving into the property, in exchange for the protected rights.
A protected tenant is any tenant who lived in a property before August 20, 1968, even if he paid no key money, so long as the contract he signed with the owner did not state that the law would not apply to him, as well as anyone who paid the owner key money upon entering the apartment, a sum amounting to only part of the property’s value.
The protected tenant has no ownership rights in the property. He pays rent, but the rent is very low, from a few dozen shekels to hundreds of shekels. The rent is updated once a year in line with the rise in the index.
The protected tenant may live in the property for the rest of his life, but he cannot bequeath the right of residence. If he abandons the property, or does not live in it for a certain period, the property returns to the owner.
Under certain conditions, the protected tenant’s relatives may also become protected tenants in the property, if they live there with him, or lived with him for a certain period up to his death.
When a bank or any other creditor places an attachment on the property, the protected tenancy right takes precedence over the attachment, so the tenant cannot be evicted, except where he moved in knowing an attachment had been placed on the property, or moved in after it was placed.
When a protected tenant transfers his rights to another tenant, he is entitled to receive a share of the key money paid by the incoming tenant.
Eviction of a protected key money tenant – what grounds allow the tenant to be evicted?
Eviction of a key money tenant is possible when the tenant persistently fails to pay rent in the amounts agreed between him and the property owner.
When the tenant fails to comply with any of the terms of the lease, or uses the property for an unlawful purpose, such as running a gambling operation or a brothel, or operating a business without a business license.
Eviction of a key money tenant is also possible when the protected tenant has maliciously damaged the property.
When the tenant disturbs and harasses the neighbors.
When the tenant makes an unfair profit from subletting, relative to the rent he pays.
When the property owner wishes to demolish the property and puts alternative accommodation at the protected tenant’s disposal.
When the protected tenant abandons the property.
When the apartment owner wishes to use the property himself and provides the protected tenant with alternative accommodation.
When the protected property is a business, the tenant cannot be evicted so long as the eviction could harm the goodwill of the business.
Eviction of a key money tenant – definition and background
Eviction of a key money tenant is known in professional language as eviction of a protected tenant, and it is anchored in the Tenant Protection Law, which imposes rights and obligations on the tenant and the landlord alike.
In the 1960s, many protected tenancies were created through a transaction that combined a “quasi-purchase” of the property with its continued lease.
The buyer paid the apartment owner a sum worth about half the value of the property, and in return gained the right to go on living in the property for up to one hundred and twenty years, while still having to pay rent.
Eviction of a key money tenant – what is key money?
The use of key money began during the British Mandate, when the British tried to curb the high real estate prices of the time. After the establishment of the state, the Israeli authorities encouraged the arrangement, needing to house the hundreds of thousands of immigrants who arrived in the country and could not purchase property at full price.
A person who holds an apartment under a key money arrangement is considered a protected tenant under the Tenant Protection Law. The law governs the relationship between the apartment owner and the protected tenant: the obligations, the rights, the allocation of the property’s running expenses, the amount of rent, and more.
The key money the tenant pays the property owner ranges from thirty percent to sixty percent of the property’s value at the time the deal is made.
In addition to the initial key money, the protected tenant pays a nominal monthly rent for the property.
The protected tenant may not sublet the apartment, operate a business in it, or transfer his rights in the protected property without the owner’s consent. If the tenant leaves the property, he is deemed to have abandoned the apartment and his rights in the property expire.
Living under a key money arrangement has several advantages, including the ability to live in a more spacious apartment, at the same price, than a small apartment registered in the tenant’s name in the land registry would offer.
Who is considered a protected tenant?
Anyone who holds an apartment or business premises and paid key money for it.
A tenant who did not pay key money but entered the property before 1940.
A tenant whose lease agreement with the landlord does not explicitly state that the Tenant Protection Law does not apply to him.
A continuing tenant, meaning a family member who became a protected tenant after the protected tenancy right passed to him from the original protected tenant.
Eviction of a key money tenant – 8 grounds that allow the tenant to be evicted
As a rule, a key money tenant can be evicted only by a judgment of a dedicated rent tribunal, which is equal in status to a magistrate’s court.
Eviction of a key money tenant, first ground: when the tenant does not pay the rent he owes.
Eviction of a key money tenant, second ground: when the tenant maliciously caused significant damage to the apartment.
Third ground for evicting a key money tenant: when the protected tenant uses the property for criminal or illegal activity.
Eviction of a key money tenant, additional grounds:
When the tenant deliberately and regularly disturbs and harasses the neighbors.
When the tenant sublet the property and made an unfair profit compared with the rent he pays.
When the apartment owner needs the property for himself.
When the protected property is owned by the state or a local authority, and the property is required for an essential public need.
In an urban renewal project, when the landlord wants to demolish the protected property and put up a new building in its place, and has already obtained the required building permit. Where a protected tenant is evicted because of urban renewal, the property owner must pay him financial compensation or purchase an apartment for him.
Eviction of a key money tenant – how does a protected tenancy differ from an unprotected one?
| Protected tenancy agreement
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Unprotected (free-market) tenancy | |
| Contract duration | For life. | Until the end of the term set in the signed lease.
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| Who is entitled to live in the property? | The tenant and his first-degree family members. | Anyone approved in the rental agreement signed between the property owner and the tenant. |
| Monthly cost of renting the property | A very low amount, on average a few hundred shekels per month. | Free-market rents, usually a few thousand shekels per month.
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| Who is responsible for repairing damage? | The property owner and the protected tenant share the repair costs equally.
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The property owner is responsible for repairs, unless the tenant caused the damage. |
| Is it possible to get a bank mortgage? | No, because the tenant’s rights are not registered in the land registry and he is not considered the owner of the property.
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No mortgage is needed, since no purchase is being made.
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| How much can the monthly rent be raised?
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The rent rises only under the periodic updates published from time to time.
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The market is free; the property owner may raise the rent by any amount he sees fit.
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| Advantages | For a relatively low key money payment, the protected tenant gains peace of mind, without the pressure of vacating the apartment at the end of a contract.
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Renting lets the tenant end the contract and move to another apartment or another city.
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Evicting a key money tenant requires close legal guidance.
Although properties are almost never purchased with key money today, according to Ministry of Housing data there are still approximately twenty thousand properties in the old neighborhoods at the centers of large cities that were purchased with key money.
In an era of urban renewal projects in city after city, evicting a key money tenant demands skill and experience. Adv. Avital Horef, practicing in Tel Aviv and Jerusalem, is an expert key money lawyer. He has accumulated extensive knowledge and experience, and consulting him is the way to protect the rights of the protected tenant and the property owner alike.
Bottom line: evict a key money tenant only with a lawyer at your side!
Although the law lists a number of grounds that allow a key money tenant to be evicted, it is worth knowing that even where a statutory ground for eviction exists, the court may still grant the tenant equitable relief.
So before you act, get proper legal advice from Adv. Avital Horef.
If you need your property back and want the protected tenant evicted, contact Adv. Avital Horef.
Adv. Avital Horef has practiced protected tenancy and key money law for many years. He has accumulated broad experience and a solid reputation, and he knows how to assist you with everything involved in evicting a key money tenant.
* Updated for 2026
