Construction Defects and Non-Conformities in New Apartments: What Are Your Rights as Buyers?

By: Attorney Moshe Taieb

Construction Defects and Non-Conformities in New Apartments: What Are Your Rights as Buyers?

Purchasing a new apartment from a developer is one of the most significant financial decisions a person makes. When the apartment delivered does not match what was promised, buyers face a difficult reality. A significant ruling from the Central District Court sheds important light on the rights of buyers who discovered construction defects and non-conformities in their new apartments.

The Facts: A Development Project in Kadima

In this case, 18 buyers purchased 9 apartments in a development project by Pelasim Ltd. in 1999, on Rehov HaLimon in Kadima. When they received the apartments, they discovered significant discrepancies between what was promised in the contracts and the reality: fewer rooms than specified, rooms that did not meet required standards, and other construction defects.

The buyers filed suit seeking compensation for the defects and non-conformities. The case raised important legal questions about the nature of “apparent non-conformity” and the scope of the seller’s obligations under Israeli sale law.

What Is “Apparent Non-Conformity”?

One of the central questions in this case was the distinction between “apparent” and “hidden” non-conformities. An apparent non-conformity is, on the surface, one that can be detected upon inspection — yet the court clarified an important nuance: a non-conformity is considered “apparent” only if it can be discovered without professional knowledge.

In our case, some of the defects required professional expertise to identify. The court determined that these could not be considered “apparent” non-conformities, and therefore buyers were not barred from claiming compensation for them even after accepting the apartments.

The “Actual Condition” Clause Does Not Release the Seller

Pelasim argued that buyers had accepted the apartments “as is” and that contractual clauses regarding the apartments’ “actual condition” released them from liability for the defects. The court rejected this argument decisively.

The court held that under the Sale (Apartments) Law, a seller cannot contractually waive his statutory obligations toward the buyer. The law provides mandatory protections that cannot be circumvented by contract. This principle is crucial: even if you signed a contract with an “actual condition” clause, you do not lose your right to claim compensation for construction defects that were not apparent to the eye.

Compensation: Defect Repair Costs Plus Mental Anguish

The court awarded the buyers compensation for the cost of repairing all documented construction defects. In addition, the court awarded a supplementary sum for mental anguish — 10% of the defect repair costs — recognizing that living in a defective apartment causes real distress beyond the financial damage.

This mental anguish component is important: it acknowledges that buyers are entitled to receive what they paid for, and that deviating from the agreed specifications causes genuine harm.

What You Need to Know as an Apartment Buyer

This ruling carries several practical lessons. First, document everything from the moment you receive the apartment. Photograph every defect, write down every problem, and request formal responses in writing. Second, do not be deterred by “actual condition” clauses in the contract — these cannot waive the seller’s statutory obligations. Third, if you suspect defects that require professional assessment to identify, do not hesitate to retain an expert. The court will take the expert’s opinion seriously.

Fourth, act promptly. The Sale (Apartments) Law sets specific limitation periods for different types of defects. Delay can cost you your right to compensation.

Questions and Answers

We received an apartment with defects. The developer says we accepted it “as is.” Are we stuck?

No. As this ruling illustrates, “actual condition” or “as is” clauses cannot waive the seller’s mandatory statutory obligations. Document the defects, consult an attorney, and assert your rights. The law is on your side.

How do I know if a defect is “apparent” or “hidden”?

A defect is considered “apparent” only if it can be detected without professional knowledge — simply by looking. If identifying the defect requires professional expertise (an engineer, a contractor, etc.), it is likely a hidden defect, and the limitation period for claiming compensation is longer. Consult an attorney to assess your specific situation.

Can I claim mental anguish compensation in addition to repair costs?

Yes. As this ruling shows, courts recognize that living with construction defects causes real distress. Courts typically award mental anguish compensation as a percentage of the repair costs. Your attorney can advise you on the relevant amount in your case.

How long do I have to file a claim for construction defects?

The Sale (Apartments) Law sets varying limitation periods depending on the type of defect. We strongly recommend consulting an attorney as soon as you discover a defect. Do not delay — every day counts. Contact us: 072-2428822.

Want to know more? Contact our office for a free consultation.

This content does not constitute specific legal advice. For guidance tailored to your situation, contact our office.