Section 5A of the Sale Law: The Complete Guide to Delivery Delay Compensation
Section 5A of the Sale Law (Apartments), 5733-1973, is the statutory foundation for delivery delay compensation claims in Israel. This is a complete explanation from start to finish.
What Section 5A Stipulates
If a contractor did not deliver an apartment on time as set out in the contract, the contractor must pay the buyer compensation as follows:
- For each month of delay in the first 8 months: 150% of the reasonable rent for that month.
- From the 9th month onward: 125% of the reasonable rent per month.
This compensation reaches the buyer without requiring proof of specific harm. It constitutes “agreed compensation” established directly in law — meaning you do not need to show that you actually suffered a particular loss.
What Is Reasonable Rent?
Reasonable rent is the amount that could be received for renting the apartment on the open market. It is not linked to the purchase price and is not limited by it.
When Does the Delay Period Begin?
The delay is counted from 60 days after the contractual delivery date. The contractor receives a 60-day grace period that is not counted toward compensation. From day 61 onward, compensation is calculated for each month of delay.
Full Calculation Example
- Reasonable rent: 7,000 NIS/month
- Delay period (beyond the 60-day grace): 12 months
- First 8 months: 7,000 × 150% × 8 = 84,000 NIS
- Additional 4 months: 7,000 × 125% × 4 = 35,000 NIS
- Total: 119,000 NIS
Can You Claim More Than the Section 5A Compensation?
Yes. The compensation under Section 5A is the floor, not the ceiling. You can claim proven damages that exceed the statutory compensation, for example: actual rent paid for alternative housing, storage costs, moving costs, and emotional distress. For more, see our delivery delay attorney page.
What Happens When There Is a Dispute About the Delivery Date?
The contractual delivery date is the point established in the purchase contract. If the contract set a “soft date” and a “hard date” separately, compensation is calculated from the binding date. If no clear date was set, the default provision in the law applies.
Statute of Limitations
A claim for compensation under Section 5A must be filed within 7 years of the apartment delivery date. It is strongly recommended not to wait — documentation is far easier to gather and preserve closer to the events.
Contact Lev-Taieb
Lev-Taieb specializes in Section 5A delivery delay claims. We will review your contract, calculate your full compensation, and guide you through the process. Call 072-2428822 or visit our delivery delay attorney page.
