תוכן עניינים
Lev-Taieb Law Firm | Real Estate & Urban Renewal Rights
In recent years, urban renewal projects (pinui-binui) have become a popular choice among apartment owners seeking to improve their living conditions. However, many of these projects suffer significant delays in delivering the new apartments — a reality that materially affects buyers who have been waiting years to receive their homes. To protect yourself in this situation, it is essential to know your statutory rights to compensation for the delay.
The Sale (Apartments) Law provides broad protection to apartment buyers, including when there is a delay in handover. The right to compensation for delay is a statutory right that may encompass compensation for all damages the buyer suffered as a result of the delay. These damages may include temporary rental cost increases, storage costs, moving costs, and in certain cases even lost income or lost business opportunities.
How Much Statutory Compensation Are You Entitled to for a Delay?
When you receive an apartment late, under the Sale (Apartments) Law, the developer is liable from the outset to pay fixed compensation. The rate is set in law and calculated as a percentage of the amount actually transferred to the developer up to the contractual delivery date specified in the contract. The current rate is 0.02% of the amount actually paid per day of delay.
It should be emphasized that the compensation is calculated only on the amount actually transferred to the developer by the contractual delivery date specified in the contract, and not on the full apartment price. In urban renewal projects, where the buyer typically pays only an additional financial supplement, the compensation will be calculated on the supplement alone, and not on the full value of the new apartment.
Additional Damages and Claims to Expand the Compensation
Beyond the statutory fixed compensation, apartment buyers have the right to sue for additional damages that were created for them as a direct result of the delay. These damages can include temporary rental cost increases, storage costs and equipment, costs of multiple furniture moves, and in certain cases even loss of income or lost business opportunities.
In urban renewal projects the situation is somewhat different. Often the buyer remains in his old apartment during the construction period. However, when the old apartment was demolished and the buyer was forced to move to temporary housing, he is entitled to full compensation for the rental costs. In addition, in cases of particularly protracted delays, it is possible to claim additional damages including impact on life plans or loss of business opportunities.
How You Can Claim the Compensation: Steps and Tips
The first step is sending a preliminary notice to the developer specifying the delay and demanding payment of the statutory compensation. It is advisable to send the notice with the assistance of an attorney, and to document carefully all the damages you have suffered. Keep custody of all relevant documents: the purchase contract, payment confirmations, and receipts for additional costs you bore because of the delay.
If the developer refused to pay or ignored your demand, you can file a lawsuit in court or in the housing disputes tribunal. The Israeli legal system recognizes the rights of buyers and generally rules in their favor when a delay is proven. In any case, it is recommended to seek assistance from an experienced attorney in the field in order to maximize the chances of obtaining proper compensation.
Note: This article reviews general principles only and does not constitute legal advice. Every case is unique and requires individual examination. It is recommended to consult with a qualified attorney before taking any legal step.
Need legal advice on compensation for delay in apartment delivery? Contact us today to schedule a free consultation. Our firm specializes in representing apartment buyers and obtaining maximum compensation in delay cases during handover.
Am I Entitled to Compensation Even If the Developer Claims the Delay Was Caused by External Reasons Such as COVID?
Yes, in general you are entitled to compensation under the Sale (Apartments) Law even in cases of external circumstances. The developer is responsible for standing by the delivery dates stipulated in the contract, unless he proves that it was a matter of superior force that could not be foreseen or prevented.
When Exactly Do the Delay Days Start Counting for the Purpose of Calculating Compensation?
The delay days start counting from the day after the date stipulated in the contract for delivery of the apartment. The compensation is calculated from the first day of the delay until the actual delivery date.
Is There a Time Limit for Suing for Delay Compensation from the Developer After I Received the Apartment?
Yes, there is a 7-year limitation period for suing for delay compensation from the date on which the apartment was received. Nevertheless, it is recommended to handle the claim as early as possible, preferably already during the delay period or a short time after the handover.
Can I Refuse to Accept the Apartment Until the Developer Pays the Delay Compensation?
No, you have no right to refuse to receive the apartment solely because of non-payment of delay compensation. You must receive the apartment when it is ready and complies with the contract terms, and claim compensation separately, either in advance or afterward.
Does the 0.02% Per Day Compensation Include CPI Linkage or Interest?
The statutory compensation of 0.02% per day is calculated on the amount actually paid, and in general does not include additional linkage. However, in certain cases it is possible to claim linkage and interest on the compensation itself if it was claimed after the expiry of the claim period.
