Jerusalem Building Project Sued Over Alleged Lack of Permits, Delays

Buyers of 32 apartments in a large Tama 38 project in Jerusalem are suing for NIS 14.7 million, alleging construction has been underway for over a year without a valid building permit. The project, "Project HaYovel," on Hatzionut Street, began in 2016 under the now-defunct Tzabar company, controlled by the late Roni Tzabari, which collapsed in 2023 with NIS 150 million in debts. The project, which involves reinforcing 70 existing apartments and adding 80 new ones across five buildings, is now being managed by the Avnei Derech group, controlled by Yair Cohen.

Building permits for the five buildings were initially obtained in July 2019 and were valid until July 2025. However, construction only commenced in 2021, meaning that for over a year, work has proceeded without a valid permit. The buyers claim they are facing delays of up to four years in receiving their apartments, with the current promised delivery date set for December of this year.

The lawsuit states that the defendant has repeatedly changed delivery dates through various communications, creating ongoing uncertainty for the buyers. These delays have resulted in significant financial burdens, including parallel rent and mortgage payments, increased loan costs, moving expenses, and storage fees, alongside substantial impacts on their personal and financial stability.

The buyers are seeking compensation for the delivery delays according to the Sales Law, based on three different compensation mechanisms outlined in their agreements, assuming the apartments are delivered by the end of 2024. They are also requesting NIS 30,000 per apartment for emotional distress. Furthermore, they are asking the court to rule that the remaining payments owed to Avnei Derech will not be linked to the construction input index, even for the delay period, as the company intends to charge indexation differences until the actual delivery date.