Can a non-resident get an Israeli bank guarantee for renting or buying property?

Bank guarantees run through Israeli property life in two directions, and a non-resident meets both. As a tenant, you are asked to hand one to the landlord. As a buyer of a new apartment, you receive one from the developer's bank. The first is a hurdle; the second is a protection the law forces on the seller. Knowing which is which, and what a non-resident can realistically obtain, saves a great deal of frustration at signing.

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Detailed Explanation

Start with the tenant's side, because that is where non-residents get stuck. Israeli landlords frequently prefer a bank guarantee (arvut bankait) over a cash deposit, since it is fast to call and does not depend on the tenant's cooperation. A bank issues that guarantee only when it is comfortable it will be repaid. For an Israeli with salary history and a credit record, the bank may issue on the strength of the relationship. For a non-resident with no Israeli income and a thin local footprint, the bank will almost always require the full guaranteed sum to be pledged in a blocked deposit (pikadon), so the guarantee is effectively backed shekel-for-shekel by your own money. On top of that you pay a commission, commonly 1 to 2 percent of the guaranteed amount per year. The practical alternative many landlords accept from foreigners is a plain cash deposit or a personal guarantor who is an Israeli resident.

The buyer's side is where the law works in your favour. When you buy a new apartment from a developer before completion, you are handing over large sums for something that does not yet exist, and the Sale (Apartments) (Assurance of Investments of Persons Acquiring Apartments) Law 1974 addresses exactly that risk. It requires the developer to secure your payments, most often through a bank guarantee that refunds your money if the developer fails to deliver. Each payment you make should be matched by a guarantee for that amount, released to the developer only as construction milestones are met. This is the same protection mechanism we explain for buyers worried about their money, and it connects closely to how your deposit is protected when buying off-plan in Israel. A non-resident buyer's job here is not to obtain a guarantee but to insist on receiving and safekeeping the developer's one for every payment.

For a non-resident, the friction is almost entirely about collateral and account access, not eligibility. To obtain a tenant guarantee you generally need an Israeli bank account already holding the pledged funds, which itself takes time to open from abroad. To hold and enforce a buyer guarantee under the 1974 law, you need to keep the original document safe and check it names you, states the correct amount, and is issued by a recognised bank or insurer. An Israeli lawyer can vet the guarantee wording, because a defective or under-stated guarantee is worse than none: it looks like protection while covering less than you paid.

In Practice: A non-resident tenant guarantee is typically issued only against a blocked deposit (pikadon) for the full amount, with a bank commission of about 1 to 2 percent per year, so an NIS 40,000 guarantee costs roughly NIS 400 to NIS 800 annually plus the tied-up capital. On the purchase side, the Sale (Apartments) (Assurance of Investments) Law 1974 requires the developer's bank to guarantee each payment, enforceable through the courts, and arranging a tenant guarantee once funds are in place usually takes 3 to 10 business days at the branch.

Key Considerations

• A non-resident can obtain a tenant bank guarantee, but normally only by pledging the full amount as blocked collateral plus an annual commission.
• A cash deposit or an Israeli-resident guarantor is often a simpler alternative many landlords will accept.
• When buying off-plan, the Sale (Apartments) Law 1974 obliges the developer to give you a guarantee, so you receive protection rather than provide it.
• Every off-plan payment should be matched by a guarantee for that sum, and you must keep the originals safe.
• Opening the underlying Israeli account from abroad takes time, so start early if a landlord will demand a guarantee at signing.

When to Consult a Lawyer

This question typically requires professional legal advice when:

• A landlord insists on a bank guarantee your bank will only issue against full collateral you would rather not lock up.
• You are buying off-plan and need the developer's guarantee wording and amount checked against every payment you make.
• A developer offers an alternative security instead of a 1974-Law guarantee and you cannot tell whether it protects you.

A qualified Israeli attorney should review any guarantee, given or received, before money changes hands.

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Speak With an Israeli Attorney

We help non-residents arrange tenant guarantees against their Israeli accounts and, more importantly, verify that a developer's buyer guarantee under the 1974 Law actually covers every shekel you pay.

Contact us for a confidential initial consultation.