Court Rejects Seller's Claim, Orders Him to Pay Buyers

A Haifa court has dismissed a lawsuit filed by a homeowner in Pardes Hanna who sought to cancel a property sale valued at 2.35 million shekels. The seller claimed the buyers had not paid the final 100,000 shekels of the purchase price. However, the court found that the seller himself had breached the contract by failing to transfer property rights on time.

The dispute arose after the parties signed an agreement in June 2020 for a house nearing completion. The contract stipulated that if the seller did not provide necessary documents for property transfer by the handover date, 100,000 shekels of the remaining payment would be held in escrow. The seller later sued, alleging the buyers withheld this sum and had fraudulently registered the property in their names without his consent. He sought to annul the sale, reclaim the house, and receive contractual compensation.

The seller attributed the delay in providing documents to issues with capital gains tax assessments, which he claimed were erroneous and required correction. The buyers presented a different account, stating they had given a check for 100,000 shekels to the seller's attorney, who allegedly failed to deposit it into the escrow account. They also asserted that the seller breached the agreement by not registering the property rights within the agreed timeframe and by failing to fix discovered construction defects.

Judge of the Haifa District Court sided with the buyers, ruling that the seller had a contractual obligation to achieve the registration of rights, not merely to make an effort. The court rejected the seller's claim that the parties agreed not to deposit the check, noting his own testimony indicated the attorney was supposed to deposit it. The judge found the seller had not been truthful on this key issue.

The court also dismissed the seller's argument that the COVID-19 pandemic caused the delay in tax assessment corrections, as no evidence was provided to support this claim. The judge noted that a tax assessment correction, once requested, was completed within days. The court further found that the seller was aware of and had consented to the buyers registering the property rights themselves.

Ultimately, the court concluded that the buyers were justified in using the remaining 100,000 shekels to offset compensation owed to them due to the seller's breaches. The seller's lawsuit was entirely rejected, and he was ordered to pay the buyers 40,000 shekels in legal costs.