Must Agreements Be Kept? Residential Leases During Covid-19*.

This article examines residential lease payment behavior among Israeli renters during the first COVID-19 lockdown in March–April 2020, focusing on how financial fragility, income shocks, contractual guarantees, and landlord-tenant relationships influenced rent payments. Survey data from 1,511 households reveal that about 12.5% did not pay full rent, withholding on average two-thirds of the due amount, with financially fragile tenants experiencing income cuts less likely to pay full rent. Formal contractual guarantees—such as post-dated cheques, security deposits, and co-signers—were associated with higher rent compliance, especially among financially fragile tenants, while stronger informal relationships (longer tenure and frequent interactions) correlated with lower rent payments, suggesting landlords may accommodate temporary non-payment to preserve relationships. Analysis of paired leases before and after the pandemic onset showed little change in contract terms, indicating rigidity despite economic shocks. The authors interpret these findings through a dynamic bargaining framework, where formal guarantees and relational contracts serve as substitute mechanisms influencing rent payment adherence under economic stress.