A rental promissory note (שטר חוב, shtar chov) is a signed written promise to pay a stated sum. In an Israeli lease, a landlord may hold it as security for the tenant’s obligations, but it is not a payment already made, a security cheque drawn on a bank, or an automatic finding that the tenant owes its face value. The note and the lease must be read together: the note identifies the payment promise and the lease should define the circumstances in which it may be used. The Bills of Exchange Ordinance, section 84 defines the basic instrument as an unconditional written promise signed by the maker to pay a definite sum on demand or at an ascertainable time.
What does signing one expose you to?
A landlord holding a valid promissory note can seek collection if an obligation is claimed to have gone unpaid. The official Enforcement and Collection Authority service accepts applications to enforce an unpaid cheque, bill of exchange or promissory note. That is why the sum printed on the note, the identity of the person signing, the named payee and the separate security terms matter. Do not assume that a promissory note must first be collected like a bank cheque or that the landlord automatically wins a disputed claim.
One note may identify more than one maker or guarantor. A guarantor’s undertaking, its wording and any contractual conditions must be examined separately. A person signing as a guarantor should not treat the signature as ceremonial or assume that an amount described as “three months’ deposit” in conversation controls a differently worded note.
| Instrument | What you give | Practical risk to check |
|---|---|---|
| Promissory note (shtar chov) | A written promise to pay a stated sum, potentially with other makers or guarantors | Who may demand payment, when the note can be submitted for enforcement and how it is returned |
| Security cheque (shek bitachon) | A cheque from the tenant’s bank account, held as security rather than monthly rent payment | The named payee, completed amount and date, any transfer restriction, and the rules for depositing it |
| Bank guarantee (arvut bankait) | A bank’s undertaking secured under its agreement with the tenant | Funds or credit tied up, fees, expiry and the beneficiary’s conditions for demand |
See the existing guides to security cheques and rental bank guarantees for the different mechanics. The rental security comparison explains why these instruments should not be treated as identical.
What to write down before signing
The ordinance supplies the legal definition, but it is not a landlord-ready lease form. These are practical checks to agree in writing with the landlord and, when necessary, a lawyer. The list does not claim that each item is a statutory condition of validity.
- Identify the property and lease. State the apartment, the lease date and the security purpose in the accompanying agreement, so the note is not confused with an unrelated obligation.
- Identify the maker and payee. Match the name and identity details to the signers and the person entitled to hold the note. A note signed only by guarantors but not its maker can fail the enforcement authority’s document requirements.
- Fix the maximum amount. Never sign an instrument with an open amount on the understanding that someone will fill it in fairly later. Make the amount, currency and any agreed linkage or interest intelligible in the signed documents.
- Address dates and transfers. Decide whether payment is on demand or at a defined time, how any completion of blanks is controlled and whether the instrument may be transferred. Consider an express non-negotiability restriction with legal advice.
- Define grounds and notice. Tie the security to documented lease obligations and a clear process for giving notice, correcting the problem and accounting for any money sought.
- Keep the signed record. Retain copies of the note, lease and any separate guarantor terms, with a receipt identifying who holds the original.
- Specify return. Record where the original will be returned, and request a signed receipt or cancellation confirmation when the security ends.
Some sample forms advise leaving a maturity date blank. That increases the importance of controlling the completion of blanks in the written agreement; it is not a reason to leave the amount, payee or underlying purpose uncertain. The colour of the pen is not a substitute for a valid instrument or agreed conditions.
Is the amount limited to three months’ rent?
Not every type of rental security is subject to the same statutory amount ceiling. Section 25י(b) of the Rental and Borrowing Law limits a security whose provision entails a financial expense to the tenant. A promissory note normally does not require the tenant to hand over cash or freeze a bank balance when signing, so do not assume the ceiling on an expense-bearing bank guarantee also caps the face amount of a note. The note still creates a potential claim that needs contractual limits and professional review. The lease type and the law’s exclusions also matter.
The same statute, section 25י(c), lists grounds on which a landlord may realise security in a covered residential lease, including unpaid rent, qualifying repairs, unpaid tenant charges and failure to vacate. Section 25י(d) requires reasonable advance notice and an opportunity to remedy the problem. Secondary guides disagree about the precise interaction between those provisions and no-upfront-cost instruments such as a promissory note. Do not treat that disagreement as permission for unrestricted collection or as proof that every claim under a note is barred. Have the actual note and lease reviewed before relying on a disputed interpretation.
What happens if the landlord tries to enforce the note?
The landlord or other entitled holder may seek payment and, if the note is not honoured, submit an application through the official bill and promissory-note enforcement process. The application must identify the obligor and instrument. Its procedural requirements differ from a normal claim for rent; the authority screens the application documents, including signatures and changes to the instrument. A filed application is not itself proof that the full requested sum is owed.
Do not ignore an enforcement warning. A debtor who disputes the claim can use the authority’s objection to bill or promissory-note enforcement route, including an objection to part of the sum. Its published service distinguishes objections within and outside the ordinary warning-period deadline; as reviewed on 31 October 2026, the ordinary period is 30 days after receipt of the warning. The applicable instructions and dates on the actual notice govern, and late cases have an additional application path.
When the defence is that a debt has subsequently been paid or discharged, the authority also provides a separate “I have paid” (פרעתי, para’ti) application. That does not replace an objection that challenges whether an underlying debt existed at the outset. Keep the payment records, handover protocol, invoices, notices and communications. A lawyer can determine which procedural route matches the actual dispute.
How and when should the promissory note be returned?
For a lease to which the statutory residential-security provisions apply, section 25י(e) requires return of the security, or its unused balance after lawful realisation, including its proceeds, within 60 days after the apartment is returned to the landlord’s possession, or by the date the specified tenant debts are settled, whichever is later. The statute uses return of possession, not simply the date printed as the end of the lease. A guide that says “whichever comes first” reverses that rule.
Ask for the original instrument back with a short signed acknowledgement that the landlord no longer asserts a claim under it. If it is not returned, make a dated written request and preserve proof that you vacated and settled the qualifying charges. If an unjustified enforcement action follows, ask about the objection route promptly rather than assuming an old note will be ignored.
Five questions worth putting in the lease
- What specific obligations does this note secure, and does it include a contractual late-vacating charge?
- What is the maximum face amount, and may it be transferred to someone else?
- Who may fill any blank, and only on what objective basis?
- Will the landlord notify me in writing and allow correction before attempting collection?
- Who holds the original, and what exact handover and debt-settlement event releases it?
The safest choice is not automatically the largest or smallest note. Compare your actual cash constraint, guarantors and contractual risk against the alternatives before agreeing to one.
Sources and next step
Primary legal and procedural sources checked 31 October 2026: Bills of Exchange Ordinance, especially section 84; Rental and Borrowing Law, section 25י; Enforcement Authority opening a bill file; objection to bill enforcement; and the payment defence service. The disputed no-expense-instrument interpretation and unusual guarantor arrangements are not presented as settled universal rules. This is general information, not legal or tax advice; confirm with a licensed professional.
When comparing homes and their lease terms, ask Semerenko Group to include the intended security instrument in your rental search brief, so costs, timing and guarantor requirements are clear before you commit.
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