Why Second-Hand Purchases Need Full Due Diligence
Buying a resale apartment in Israel involves risks specific to properties with history: undisclosed building violations, outstanding debts attached to the property, informal agreements with neighbours, or a seller who does not have clean title. A thorough pre-contract due diligence process protects against all of these.
Pre-Contract Checklist
- Land Registry extract (Nesech Reyshan): Verify ownership, existing mortgages, attachments, and any annotations.
- Municipality building file: Request the building permit file and occupancy certificate. Check whether any part of the apartment was built or modified without permit.
- Building management fees: Confirm all Va'ad Bayit (building management) fees are paid. Outstanding fees are a lien on the property in some cases.
- Utility debts: Water, electricity, and municipal tax (Arnona) arrears should be cleared before closing.
- Betterment levy: Check whether any approved planning changes have created an outstanding betterment levy obligation.
- Seller's tax status: Ensure the seller is entitled to a capital gains exemption or that the tax liability is properly allocated in the contract.
What is an occupancy certificate and why does it matter when buying an apartment in Israel?
An occupancy certificate (Teudat Gimurim) is issued by the municipality and confirms that a building was constructed in compliance with its approved building permit and may legally be occupied. If a building lacks an occupancy certificate — as many older buildings in Israel do — it may indicate building violations that could require expensive remediation. Some banks refuse mortgage financing for apartments without an occupancy certificate, and buyers may face difficulties in future resale.
