Delays in delivering new apartments are common. Under the Sale (Apartments) Law, as amended in 2022 (Amendment 9), a buyer is entitled to fixed compensation for delay, without proving damage.
When does compensation start?
For contracts signed after the amendment took effect, if the delay exceeds 30 days, compensation is due retroactively from the contractual date. In older contracts the grace period was 60 days.
How much?
Compensation is based on the rent of a comparable apartment, for each month of delay:
- The first four months: full rent.
- Months five to ten: 1.25 times the rent.
- From month 11: 1.5 times the rent.
Beyond this, actual damage can be claimed if it can be proven.
When is the apartment considered delivered?
When it is fit to live in. This usually requires an occupancy certificate (Form 4) and connection to electricity and water. Material defects preventing reasonable use may postpone the legal delivery date. See new apartment handover.
Can the developer claim force majeure?
Only in exceptional circumstances beyond his control that he could not foresee or prevent. Bureaucratic delays, labour shortages and routine difficulties usually do not qualify. Check in the contract how “force majeure” is defined, and narrow it. See negotiating a developer contract.
What should you do?
Document the dates, keep the correspondence and do not sign a waiver of rights as a condition for receiving the keys. If needed, send the developer a formal demand, and if there is no response, consider a claim.
Where do you go from here?
A developer’s contract is written by the developer’s lawyers, so it protects the developer first. At Paz Israel & Co. Law Office we represent buyers of new apartments and landowners in combination deals: we check the developer, the security and the specification, negotiate the contract and accompany you through handover and registration at the Land Registry. For more information see our property purchase and sale representation page, or contact us to schedule a meeting in Tel Aviv, Jerusalem or Modi’in.
This article provides general information, is correct as of the time of writing, and does not constitute legal advice or a substitute for reviewing your specific circumstances.