Buying an apartment from a contractor?

Get to know the amendment to the law that protects you

Buying an apartment from a contractor is a complicated real estate transaction that puts the buyers at increased risk. The law is indeed on the side of the buyers, but it is important to know all the legal aspects in order to carry out transactions correctly in advance. Attorney Itai Davidi with practical advice

In collaboration with legal zap

08/18/2022

Thursday, August 18, 2022, 1:31 p.m. Updated: 1:41 p.m.

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Buyers who do not know the articles of the law may find themselves in financial losses (Photo: ShutterStock)

Buying an apartment from a contractor is a financially expensive and legally complicated business.

Buyers who do not know the important sections of the law to protect them and the correct way to conduct themselves around the purchase may find themselves in financial losses and legal proceedings in the best case, and facing a broken trough in the worst case.

The most important law designed to protect apartment buyers is the Sales (Apartments) Law, 1973-1973, and it was recently amended in a way that benefits the buyers even more. From this day onward. The amendment was passed after the Tenant Price Committee of the Bar Association submitted its position.

"Even before the amendment, the Law on the Sale of Apartments was intended to protect buyers in sales transactions of apartments sold by a contractor," explains Attorney Itai Davidi, "but Amendment 9 The law includes a number of concessions designed to further reduce the power gap between buyers and contractors, and to protect the buyers."

The reliefs are applied in three main components:

- The amendment reduces the exemption that developers have from paying compensation for delay, in that a delay in the delivery of an apartment will apply when it is caused by an act or omission of the buyer only.

The "grace" period for late delivery due to reasons related to the developer was reduced to only one month, compared to the usual 60 days before the amendment.

- the amendment establishes a limitation of linkage to the construction inputs index to the construction component only, and prohibits the linkage of the other components of the transaction.

The attachment will apply until the delivery date specified in the sales agreement, so as long as there is a delay in delivery, attachment will not be calculated starting from this date.

This means that only 40% of the apartment's value will be added to the index, compared to 100% before the repair.

- the amendment states that it will not be possible to recover legal expenses from the buyer of an apartment.

Legal aspects surrounding purchasing from a contractor

In addition to being familiar with the law of sale, it is important that buyers of apartments from a contractor know the important legal aspects and proceed according to them in order for the transaction to be carried out in the best and safest way.

Attorney Davidi lists four main sections that every buyer must know and refer to before the purchase:

- the developer is responsible for obtaining the required permits, the engineering and architectural planning, obtaining bank support, etc. The buyer (through his lawyer) must verify that the developer can indeed meet in the project that he is marketing. A preliminary check regarding the identity of the developer is very important, since the fate of the apartment rests on his shoulders. In addition, it is necessary to verify which construction company the developer signed the construction of the project with. It is recommended to check other buildings that the same contractor has carried out and wonder about the quality of the construction. It is important to make sure, Among other things, because the contracting company is recognized and registered in the register of contractors.

- Human nature, explains Attorney Davidi, does not attach sufficient importance to the clauses listed in contracts and agreements. When purchasing an apartment, these are documents that should not be taken lightly, and the technical specification booklet, which contains the exact and detailed description of the desired apartment, must also be read in depth. You come across a situation where a person buys an apartment 'on paper', before starting the actual construction project, and only after the construction is completed does he discover that there is a mismatch between what is desired and what is found," he says. "Therefore, it is important to examine and read the technical specifications carefully.

Check the size of the apartment, the rooms, the balcony, the utility rooms, and ask the developer in advance if changes can be made."

- The law of sale (apartments) anchors within it a list of possible alternatives for securing the buyers' funds, which must be examined before the purchase.

It is important to know that the seller is not allowed to receive an amount exceeding 7% on the account of the property, unless he provides one of the guarantees specified in the law.

It is important to find out what type of insurance the contractor provides.

Attorney David recommends obtaining, if possible, a bank guarantee, which is the strongest and easiest guarantee to realize.

- A sales agreement is a complex document accompanied by many risks. It is not uncommon to discover an agreement drafted in a way that tends to favor the contractor and sometimes does not provide sufficient protection for the rights of the purchasers. Therefore, it is very important to be professionally accompanied by an experienced lawyer who knows the field well and knows how to significantly reduce the risks involved in the transaction, while taking care and safeguarding the interests and considerations of his clients.

For more details and to make contact, you can contact us here or by phone - 077-8048895

on the firm's page on the legal website

The article is courtesy of Zap Legal

• Sentence

• Real estate and real estate

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• new appartment