means purchasing an apartment that does not yet exist, placing full financial dependence on the developer's stability throughout the construction period. Israel's Sale (Apartments) Law (1968) and the Sale (Apartments) (Assurance of Investments) Law (1974) impose significant buyer protections — bank guarantees, contract disclosures, defect warranties — but these apply only when the purchase contract is independently reviewed before signing. The Law Office of Adv. & CPA Shoshi Arbib conducts complete due diligence on developer purchase contracts before any commitment is made.
Why New-Build Purchases Carry Special Risks
Buying a new apartment from a developer (Katchlan) in Israel involves risks that do not exist in second-hand purchases — primarily because you are paying for something that does not yet exist, relying entirely on the developer's financial health and project execution. Purchaser protection law (Chok Mechira) provides significant safeguards, but only if you know what to verify.
Top Risks to Check
- Developer's financial stability: Developers with weak finances may not complete the project. Check land ownership, existing mortgages, and project financing.
- Bank guarantee (Avraham Bankait): The law requires the developer to provide a bank guarantee for all stage payments. Verify it is properly issued — not just promised.
- Planning approvals: Is a valid building permit issued, or is the project still in planning? Delays in permits delay delivery.
- Delivery date and penalties: What is the contractual delivery date? What compensation is owed for delay? Are the penalty clauses realistic?
- Specification changes: Developers can substitute materials and finishes — check what the contract says about specification changes and approval rights.
- Registration timeline: How long until the apartment is registered at the Land Registry in your name? Delays of years are common without contractual pressure.
Is a bank guarantee mandatory when buying from a developer in Israel?
Yes — under Israel's Sale Law (Apartments) and its regulations, developers selling unfinished units must provide a bank guarantee (Avrahat Bank) for each stage payment received that exceeds a defined threshold. The guarantee must be for the full amount paid and remain in force until the apartment is registered in the buyer's name or a registered mortgage in the buyer's favour is in place. Buyers should verify the guarantee document directly with the bank — not just accept the developer's assurance.
What is top risks to check?
Yes — under Israel's Sale Law (Apartments) and its regulations, developers selling unfinished units must provide a bank guarantee (Avrahat Bank) for each stage payment received that exceeds a defined threshold. The guarantee must be for the full amount paid and remain in force until the apartment is registered in the buyer's name or a registered mortgage in the buyer's favour is in place. Buyers should verify the guarantee document directly with the bank — not just accept the developer's assurance.
Official References: Israel Land Authority · Israel Tax Authority · Israel Ministry of Justice · Israeli Courts Administration · National Insurance Institute of Israel
Steps in an Israeli Property Purchase
- Pre-purchase checks — Verify Land Registry title, building permits, encumbrances, and compliance with any development agreement.
- Negotiate and contract — Negotiate price and terms, and draft a sale agreement with protective clauses against delays and building deviations.
- Tax planning — Calculate purchase tax, identify applicable exemptions, and plan the transaction tax position before signing.
- Land Registry registration — Transfer title and register the property in the buyer's name, including mortgage registration where applicable.
Shoshi Arbib Law Office — Attorney | CPA | Mediator, Netanya, Israel.
