Is there any guarantee of the quality of construction in my new home in Israel?

When someone purchases a new apartment or an apartment “off-plan”, a question that often arises is how does the purchaser guarantee the quality of construction after taking possession? The Sales Law, with the primary objective to protect buyers against negligent builders, makes the prospect of buying a new apartment in Israel, a more secure exercise.

In Israel, there are stringent laws, particularly the Sales Law (Apartments) 5733 -1973 (the “Sales Law”), which sets forth the obligations and legal responsibilities of a builder and imposes protections for buyer’s giving them legal recourse against a builder in the case of faulty or negligent construction.  In addition, in order to protect payments made by buyers to developers, or sellers, a law called the Sales Law (protection of investment of apartment purchasers) 5734-1974, was enacted to guarantee payments paid during the course of construction. The above laws have been amended over the course of the years and have put significant limitations on builders requiring them to adhere to strict rules, both regarding quality of construction and protection of buyer’s investment.

This article focuses on the Sales Law (Apartments) 5733 -1972.  The Sales Law (protection of investment of apartment purchasers) 5734-1974 will be addressed in a future post.

Primary objective of Sales Law is to protect apartment purchasers

The Sales Law was enacted nearly fifty years ago, with the primary objective to protect apartment purchasers. Over the years, the law has been amended many times with an emphasis to give buyers significantly more protection against negligent builders.

The Sales Law sets forth the responsibility of a builder for the projects it has constructed. Specifically, the Sales Law gives a buyer recourse against builders if they build negligently, not in conformance with relevant building codes and, in general, for faulty construction which includes the use of deficient or substandard materials.

Technical Specifications (Mifrat Techni) are required by law

According to the Sales Law, every contract signed must have attached to it the technical specifications of the apartment (Mifrat Techni) which describes in detail the building in which the apartment is located, the materials used in construction, and what is included in the apartment (for example: number of electric outlets; types of windows; doors; kitchen; floor tiles; bathroom tiles; heating; air conditioning; etc).  The technical specifications must also include the credits given for items not taken by the purchaser. Failure on the part of the builder to build in accordance with the terms of the technical specifications, or a deviation from the quantities or qualities set forth in the technical specifications, is deemed a breach of the law and will entitle a buyer to recourse.

According to the Sales Law, the buyer first has to give the seller an opportunity to fix any defects or deficiencies.  If after a defect was revealed and the seller repairs the same defect more than once during a two year period, or if the defect is the type which needs to be fixed urgently and the seller fails to do so, the buyer can make those repairs him/herself and the seller is obligated to cover the cost of the repair. Bear in mind that the Sales Law is not a be-all and end-all, but rather, is in addition to the buyer’s right to sue the Seller for damages in the event of defects or deficiencies or other breaches of contract by a Seller.

Warranties on new apartments

Furthermore, the Sales Law sets forth various warranty periods which include a general warranty for everything in the apartment for one year, and longer warranties for more material items such as piping, waterproofing, and structural issues, which can be as long as 6 years or more, depending on the nature of the defect or deficiency. It is important to note that there are many cogent provisions (provisions that a developer cannot contract out of) in the Sales Law that even if a developer puts a provision in a contract which goes against the terms of the Sales Law, such provisions are not enforceable. For example, a developer cannot give shorter warranty periods than are required by law or not provide security for the purchaser’s payments.  

There are also provisions in the Sales Law imposing penalties on the developer, and giving a purchaser recourse, in the case of delayed completion.

While the Sales Law is not perfect, the amendments made over the years make the prospect of buying an apartment in Israel, off-plan, a more secure exercise.  Yet, while the Sales Law provides many important legal protections, prior to purchasing, a purchaser should always consult with all of the appropriate professionals to ensure that they are fully protected in the framework of their purchase.

It is important to note this article is merely an abstract of what the author deemed to be the most salient points in the Sales Law but should no way be interpreted by the reader as giving legal advice and is not a substitute for consulting with the necessary professionals prior to purchasing an apartment.

The author, Josh Portman, Advocate, is the owner and managing partner of Portman Law Offices. With nearly 25 years of experience in representing foreign residents, primarily from English-speaking countries, in purchasing real estate in Israel, he has particular expertise in representing clients purchasing apartments off-plan. Adv. Portman can be reached by email at [email protected].

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