Meaning of the ruling: The comment can no longer be used as a protection for apartment buyers in the event of the liquidation of the contractor or developer • "The judges put uncertainty in the market"
TMA 38 project
Photo:
Joshua Joseph - Illustration
Now it's final: the Supreme Court has ruled that a warning note is not a guaranteed protection for homebuyers. Meaning: The money of investors or buyers in TMA 38 projects is not guaranteed.
This is a recent ruling in the Supreme Court, in which an appeal was rejected against the district's decision to delete warning notes issued in favor of apartment buyers in the TMA 38 project in Ramat Gan as part of the entrepreneurial company's liquidation proceeding. The law in the district was published about a year ago in "Israel Today."
No longer secured creditors
The ruling means that the buyers of the apartments in the project lost their rights in the apartments they bought, and may not even get their money back, this is because the developer went bankrupt and according to the liquidator no other developer was interested in completing the project. The court accepted the claim and ruled that deleting the warning note is the only way to advance the stuck TMA project.
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However, according to experts, deleting the warning note by the court creates an acute problem: buying an apartment is considered the largest purchase that an average family makes during its lifetime, and invests all its savings in it - hundreds of thousands of shekels and sometimes even more. Homebuyers, who until now were in the status of a secured creditor and believed that their money was protected and would be the first to get it back in case the developer goes bankrupt, will not now be able to rely on this legal instrument and guarantee their money in case the consideration is not provided.
"The court has created uncertainty in the real estate market, and the entire market is already changing its behavior," warns Adv. Chen Bachar of the Bachar Shabtai firm, which represented one of the buyers in the Ramat Gan project. Who usually find it difficult to get a bank loan, will have difficulty selling apartments due to the fear of potential buyers to buy an apartment in a project that does not provide them with protection for their money. This ruling of the court is also inconsistent with the provisions of the Sale of Apartments Act, and in fact 'sends' the tenants to prove to the liquidator the protection that the law has already given them. There is a reversal of burdens in this ruling, which creates uncertainty in the entire real estate market.
