Stepping over every possible landmine: this is how Israelis fail in real estate transactions

The real estate market in Israel refuses to cool down, and continues to attract thousands of buyers and investors, but many Israelis do not experience relief and joy after the purchase, but mostly mental anguish, frayed nerves, lawsuits, and losses of hundreds of thousands of shekels up to the loss of the properties - and all due to stupid mistakes

Adv. Idan Atias, guest column

04/08/2022

Thursday, 04 August 2022, 14:48

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Yossi and Farah, a young couple with two children, looked for apartments in the lowlands for a long time and also came to the green neighborhood in Yavne.

Farah fell in love with one apartment where the bathroom area was huge.

The seller explained that they are profiting from an expensive extension renovation for which no additional price will be charged, provided they proceed quickly to the signing.

They decided not to miss the opportunity, as happened to them in another apartment when they hesitated, and signed.

A month before their entry, the seller informed them that due to a dispute between neighbors who complained to the local authority inspectors, an inspection of construction anomalies was carried out in all the apartments in the building.

From then on, the couple got into a huge legal entanglement.

The seller made it clear to them that they must comply with the agreement, and that they had the opportunity to check the legality of the extension, but they consciously chose to move forward, and hence it is already their problem.

It was made clear to them at the municipality that purchasing a property with a construction exception is a criminal offense.

In the legal process, the couple was fined hundreds of thousands of shekels, fell into huge financial debts and had to sell the apartment.

All the entanglement and heartache could have been solved if they had carried out an inspection comparing the house plan with the house itself, an inspection which is done by reviewing the "building file" in the engineering department of the local authority, or if they had used a real estate appraiser to provide them with a copybook to carry out the transaction.

The haste from the devil.

One mistake can cost a lot of money (Photo: ShutterStock)

In another case, Ilan and Ofra, a retired couple, bought an apartment by the sea in Bat Yam, which they had dreamed of all their lives.

The seller treated them kindly and kindly and even agreed to leave a lot of furniture for them.

They reached the signing stage willingly to his will, and agreed without hesitation to all the conditions and requests he made regarding the dates of the distribution of payments.

"This is a routine contract," he said.

This is one of the most common statements and has the potential to cause problems in the future, since in real estate transactions there is no such thing as a "routine" contract.

One of the things that Ilan and Ofra did not take into account is that the payment dates are not synchronized with those they agreed with the buyer of their previous apartment, and do not embody any minimal gap that would ensure Preventing pressure in the event of a payment delay on the part of the buyer or the bank. And that's exactly what happened - a month's delay in transferring the money on the part of the tenant due to illness, reluctantly brought them to a situation where they had to choose between going to legal proceedings for breach of agreement and taking a loan and interest payments that they bear until the payments are settled.

Many buyers tend to think that this is a simple transaction that does not require the involvement of a professional, and choose to save the costs of the fees, out of the innocence that this is a standard and routine contract.

But in fact they make basic mistakes that can lead to heartache and huge financial losses.

In most cases, the small savings are expensive.

Be careful what you write, also and perhaps especially on WhatsApp (Photo: ShutterStock)

And not only official agreements that are not adapted to the circumstances can complicate us, but also WhatsApp correspondence, emails, voice messages and recorded conversations.

These constitute legal evidence for all intents and purposes.

This is what happened to Itzik who wanted to sell an inherited apartment in Holon on his own after the death of his parents, and save the brokerage fees.

For many months he failed in his sales attempts until he decided to contact a brokerage firm.

After a few weeks, the company found a serious buyer who agreed to the purchase, on the condition that he would receive a significant discount, to which Itzik agreed without any choice.

Just then, an interested person from the past came back into the picture and started negotiating with Itzik and agreed to all his terms.

Itzik verbally and in WhatsApp messages promised the apartment to that interested party, on the condition that he wait a few months until the expiration of the agreement with the brokerage company.

Soon this was revealed to the company, which insisted that he abide by the agreement and not sue him for breach of contract, and so he did.

But on the other hand, the buyer with whom he conducted independent negotiations chose to sue him in court for mental anguish due to the misrepresentation that the apartment was already his. He presented the dozens of correspondence between them, and thus, in an attempt to save a commission of several tens of thousands of shekels, he was required to pay compensation of 223 thousand shekels .

Never, but never sign with a common lawyer for both parties (Photo: ShutterStock)

Attorney Idan Atias (Photo: Shir Nagar)

The attempt to save costs is a recipe for additional problems, such as a hidden conflict of interest that those involved in the scheme are often unaware of.

This is what happened to Michal and Hagi, a young couple who decided to sell their apartment and buy a bigger one for their growing family.

They advertised the apartment and a buyer arrived - a businessman who convinced them to hire one lawyer to handle both sides and make a "simple" agreement.

Very quickly the couple realized that it was not going to be "simple".

Immediately after the first payment, the buyer stopped paying for it, and the attorney's explanation regarding the clauses that appeared in the contract did not match what was actually agreed upon. And so the parties very quickly descended into lawsuits and unnecessary expenses.

The obvious conclusion from all these cases is not to take agreements lightly, make sure you understand all the details of the contract, and not to trust the good personal relationship created with the buyer or seller.

The fact that both parties are satisfied at the beginning and everything is going smoothly, still does not guarantee anything about the continuation, and it is important to take into account less optimistic future scenarios as well.

When it comes to one of the most important transactions in your life, it is worth giving up a few thousand shekels for professionals, who will guide you towards a successful and safe transaction.

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