Purchasing a new-build apartment requires specialist legal representation covering all aspects of the contract. Developer contracts differ according to land rights and project stage. (Shoshi Arbib Law Office.)
Purchasing a new-build apartment requires specialist legal representation covering all aspects of the contract. Developer contracts differ according to land rights and project stage.
What Is the Process for Buying a New-Build Property in Israel?
Our services include: conducting negotiations from the offer through to signing, attending signing meetings, carrying out all relevant checks, examining the developer's land rights, and exit options before a permit is granted.
Important: The developer's lawyer represents the developer only. Only a lawyer acting for the buyer protects the buyer's interests.
Purchasing Before a Permit Is Granted
Advantages: Lower price; usually benefits from the developer.
Risks: No security for payments at this stage; building plans are not final until the permit is granted.
Key Clauses to Include in the Developer Agreement
- No more than 7% of the price held in trust in the lawyer's account
- Right of cancellation if no permit is obtained within a set period
- Right of cancellation if the apartment plan changes significantly
- On cancellation — full and prompt return of all funds with no conditions
What are the risks of buying an apartment from a developer before a building permit is granted?
Purchasing before a permit is issued carries several risks: no statutory security for payments, building plans may change, and the project may face long delays or cancellation. Buyers should insist on clear cancellation rights and ensure funds are held in trust until the permit is received.
What must a purchase agreement with a developer include under Israeli law?
Under the Sale (Apartments) Law, the agreement must include a detailed technical specification, a defined delivery date with compensation for delays, and a bank guarantee protecting all payments. No more than 7% of the purchase price may be held before security is provided. Only the buyer's own lawyer can protect the buyer's interests.
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.
