Delay in Apartment Delivery from Contractor – Right to Compensation Under the Sale Law

Moshe Taieb
Advocate | Lev-Taieb Law Office

Purchasing an apartment from a contractor is one of the most significant financial commitments a person makes in their lifetime. When the contractor fails to deliver the apartment on the agreed date, the buyer is entitled to financial compensation under the Sale Law (Apartments) 5733-1973. This article explains the legal mechanism for calculating compensation, the conditions for canceling the contract, and the force majeure exceptions that a contractor may invoke.

The 30-Day Delivery Window

Under the Sale Law (Apartments), a contractor who delivers the apartment within 30 days after the contractually agreed delivery date is not liable for delay compensation. Only from the 31st day onward does the obligation to pay compensation begin. This grace period is built into the law and cannot be contractually waived to the buyer’s detriment.

Tiered Compensation Formula

Once the 30-day grace period expires, compensation is calculated according to a tiered monthly formula based on the apartment’s purchase price:

• Month 1 of delay (days 31–60): 0.5% of the apartment price per month of delay.
• Months 2–3 of delay (days 61–120): 1% of the apartment price per month of delay.
• Month 4 onward: 1.5% of the apartment price per month of delay.

Compensation begins accruing automatically from the day after the contractual delivery date — no prior notice to the contractor is required. Each additional month of delay increases the total sum owed to the buyer.

Right to Cancel the Contract

If the delay is prolonged and the buyer can no longer wait for delivery, the law grants the right to cancel the purchase contract entirely. To exercise this right, the buyer must prove a causal link between the delay and a genuine need for alternative housing — for example, being forced to rent accommodation or relocate during the delay period. Upon valid cancellation, the contractor must refund all payments made plus linkage and interest.

Force Majeure Exceptions

A contractor may be exempt from paying delay compensation if the delay resulted from external, unforeseeable circumstances beyond the contractor’s control — such as natural disasters, security situations, or official strikes. However, the contractor must actively prove that:

1. The cause of the delay was truly external and unforeseeable.
2. The delay was not also caused or aggravated by the contractor’s own negligence or poor planning.

Courts have interpreted force majeure exceptions narrowly. General claims of supply chain problems or labor shortages are typically insufficient without detailed supporting evidence.

Practical Steps for Buyers Facing a Delay

If your contractor has missed the delivery date, we recommend:

• Documenting the contractual delivery date and any written extensions.
• Keeping records of all rental or alternative housing costs incurred during the delay.
• Sending a formal written demand for compensation to the contractor.
• Consulting a real estate attorney to assess your full entitlement and, if necessary, to file a claim in the appropriate tribunal.