Short-Term Rental of Residential Apartments – The Waldorf Astoria Affair

February, 2024 / EKW


An important decision was made recently in a legal dispute between apartment owners in a residential building in the prestigious Waldorf Astoria Project in Jerusalem, regarding the extent to which apartment owners can rent out their residential apartments for short periods in the style of Airbnb. The supervisor of real estate registration in Jerusalem, Ms. Avital Schreiber, determined that the bylaws of that specific condominium do not prevent such a rental, contrary to the house committee’s claim[1]. This decision reflects a broader dispute regarding interpretation of the term Residential and its implications for the rights of apartment owners.

Background and the Legal Dispute

The Waldorf Astoria Project was designed and built as a combined residential and hotel project. The idea was to create a prestigious and unique project that combines the comfort and services of the Waldorf Astoria Hotel with the privacy of residential apartments in the adjacent building, while the residents of the residential building will be able to enjoy the hotel services provided to hotel guests.

The conflict arose between a group of apartment owners who rented their apartments for short periods and other apartment owners who were represented by the condominium’s representative (the house committee), who claimed that this was contrary to the bylaws of the condominium and therefore this rental constituted a prohibited use.

The main clause of the condominium’s bylaws on which the dispute revolves is as follows:

“Residential apartments will be used for residential purposes only, and they will not be used for commercial purposes, or any other non-residential purpose”.

The main question that arose is whether short-term rental is included in the definition of Residential according to the condominium bylaws. Another question that came up is whether there is evidence that the project’s management company knew about and previously approved rentals of this type, which may indicate the appropriate interpretation of the term Residential in the bylaws.

In coming to decide the issue, the Supervisor examined previous laws that dealt with the interpretation of the term Residential in different contexts. For example, some of them were given a narrow interpretation referring to permanent residences only. In others, a more expansive approach was adopted. Even in the rulings concerning condominiums, it is not possible to point to a uniform approach, when in some cases the narrow interpretation was adopted, while in other cases an expansive approach was taken.

Although previous rulings in the field of condominiums often adopted a restrictive approach, the Supervisor in this case ruled in favor of an expansive interpretation of the term Residential. The difference may be due to the fact that the building is an integral part of a project that combines residences and a hotel, in a way that allows for more flexible uses. The Supervisor reviewed previous rulings and noted that although in some cases the term Residential referred to permanent residence only and not to a temporary tourist stay. However, in view of the unique circumstances of the Waldorf Astoria Project, she determined that the concept should be interpreted more broadly, which also includes short-term stays.

Unlike many controversies regarding the interpretation of condominium bylaws, where there is no evidence of the writer’s intent, which leads to giving great weight to the language of the bylaws, in this case evidence was discovered that indicates the circumstances of drafting the bylaws and their registration. In particular, it turned out that in the sales agreements that preceded registration of the agreed bylaws, the parties referred to the possibility of flexible uses of the apartments, beyond permanent residences. The existence of this evidence allows the interpretation to go beyond the limits of the written bylaws, and more faithfully reflect the original intention of the writers.

Thus, it was revealed that the project management company not only knew about the existence of short-term rentals but also cooperated with them in the past and did not prevent them. This fact shows that even the management company did not see such rentals as contradicting the bylaws. Based on all this, the Supervisor therefore determined that there is no reason to prohibit the apartment owners from renting the apartments out for short periods, since this action is included in the scope of Residential according to the interpretation of the bylaws adopted in this case.

Possible Latitudinal Implications

This ruling reflects a more general trend of adopting an expansive approach in the interpretation of the term Residential in the context of condominiums. It is possible that the aforementioned ruling will also serve as a guiding precedent for similar projects that combine residences and a hotel. Of course, this decision expands the rights of use and the potential earning of apartment owners from their properties.

However, such a decision may create friction with tenants who are interested in a more quiet and private nature, and demonstrates the inherent tension between private property rights and the community interest in condominiums, which will likely continue to be clarified in future rulings.


The ruling of Supervisor Schreiber regarding the option of renting apartments in the Waldorf Astoria Project demonstrates the emerging trend of adopting an expansive interpretation of the concept of Residential in the context of condominiums and the permitted designation thereof according to the provisions of the CBP.

It seems that in the appropriate cases, and in particular when it comes to unique projects that combine residences and a hotel, the court will adopt an approach that allows temporary and more flexible uses of the apartments, while balancing the interests of tenants who are interested in quieter and more private residences.


It will be interesting to see the extent of the impact on similar conflicts in other projects and on the entire apartment rental industry.


For more information, please contact:

Adv. Hanan Efraim                       Adv. Ofer Inbar

Office: 03-691-6600                      Office: 03-693-6600

Email:          Email:

[1] See Ruling (Jerusalem) 79-20 Condominium House Committee v. Yaakov Tobol