What Happens After I Sign the Contract for My Off-Plan Property in Israel?

After signing the contract and making your initial payment, you have work to do. There are several crucial steps you need to navigate to ensure a smooth process leading up to receiving the keys to your new home.

1. Bank Guarantees and Payment Security

Each payment you make to the project’s designated account should be matched with a corresponding bank guarantee or other legal security. It’s essential to track this closely and follow up with the developer if any guarantees are delayed. Payments should only be made using the official pre-printed payment book (pinkas shovarim), never to an alternative account. This is something your lawyer or forex transfer company may be able to assist with, ensuring payment security and proper documentation.

2. Power of Attorney

You will need to provide the developer with an irrevocable notarized power of attorney to handle property registration and related matters. This should be arranged soon after signing the contract.

3. Payment Schedule

Adhering to your payment schedule is critical to avoid penalties and inflation-linked price increases. Even if your attorney negotiates a short grace period, it may not apply to price adjustments due to inflation. If payments are linked to construction milestones, stay informed about progress to ensure timely payments.

4. Mortgage Arrangements

If you are financing your purchase with a mortgage, you should have received approval before signing the contract. However, there is still a lot to do before you actually take the mortgage. It’s important to start the process a few months before you need the funds, as it involves extensive paperwork, obtaining signatures from the developer, notarization, and registration with the pledge office, all of which take time.

5. Structural and Design Changes

If you purchased early enough in the project, you may have the option to request changes to the layout, plumbing, or electrical plans. Meet with the developer’s designated representative to finalize these decisions and ensure any payments for modifications are made on time to avoid cost increases. If you are overseas or unfamiliar with the local procedures, hiring a project manager can be a valuable investment to ensure timely decisions and manage on-the-ground details.

6. Material And Finish Selections

As construction progresses, you will need to choose materials such as tiles, doors, and fixtures according to the developer’s schedule. Delays in making these selections can result in project delays or the developer choosing for you. If you are overseas, hiring a project manager is highly recommended to oversee this process.

7. Certificate of Occupancy

Near the end of construction, the developer will work to obtain Tofes 4, the official certificate of occupancy. Without this, you cannot be permanently connected to electricity and utilities. Avoid taking possession of the unit before this certificate is issued.

8. Final Inspection

Before making your final payment, conduct a detailed inspection of your unit and shared areas. While not mandatory, hiring an engineer is highly advisable to check for structural issues and construction defects. All deficiencies should be documented in an official Protocol.

9. Final Payment and Key Handover

If the apartment is habitable and meets agreed-upon conditions, you will make your final payment and receive your keys. However, ensure that your security guarantees remain with a lawyer in trust rather than directly with the developer, as property registration can take time.

10. Post-Handover Follow-Up

After moving in, you may discover additional issues that were not immediately visible. Inform the developer in writing about any defects within the applicable warranty period to ensure they are addressed.

By staying proactive and well-organized, you can navigate the post-contract phase with confidence and ensure a successful property acquisition in Israel.