Court Orders Developer to Pay Over Half a Million Shekels for Undelivered Penthouse
Translated & summarized from Ynet by baba
A Herzliya court ordered a real estate developer to pay over 513,000 shekels to a couple who bought a penthouse in Petah Tikva in 2021 but have not yet received it. The judge rejected the developer's claims that the "Swords of Iron" war and subcontractor issues caused the delay, stating the breach occurred before the war. The couple will receive the full claimed amount for 35 months of delay, plus interest and legal fees.
The story in 6 lines · by baba
- A Herzliya court ordered a developer to pay over 513,000 shekels for an undelivered penthouse purchased in 2021.
- The court rejected the developer's defense that the "Swords of Iron" war and subcontractor issues caused the delay.
- The penthouse was scheduled for delivery in August 2023, but the project remains incomplete.
- The couple claimed 443,775 shekels for 35 months of delay in receiving their apartment.
- The judge ruled that compensation is due from the original contractual date, not after a grace period.
- The developer was also ordered to pay 70,000 shekels in legal expenses.
A Herzliya Magistrate's Court has ordered a real estate developer to pay over half a million shekels to a couple who purchased a penthouse in Petah Tikva in 2021 but have yet to receive it. Judge Eilat Harnoif rejected the company's attempt to blame the prolonged delay on the "Swords of Iron" war and issues with subcontractors.
The couple signed an agreement in August 2021 to purchase the penthouse as part of a Tama 38 urban renewal project. The developer committed to delivering the apartment within two years, by August 2023. However, the project remains incomplete, and the couple had not received possession of the apartment even by the time the court ruling was issued last week. The couple sought 443,775 shekels for 35 months of delay.
The developer argued that circumstances beyond its control justified the delay, citing a severe shortage of construction workers due to the "Swords of Iron" war, unexpected engineering complexities in the building's foundations, and difficulties with subcontractors. The company claimed the first contractor refused to leave the site and prevented their replacement from entering, and disputes with the second contractor also led to work stoppage.
Judge Harnoif dismissed these claims, noting that the contractual delivery date was set two months before the war began, meaning the company was already in breach. She stated that had the project proceeded on schedule, the apartment would have been delivered before the war. Evidence pointed to issues with subcontractors and project management as the primary reasons for the delay. The judge highlighted that the developer was responsible for the construction process, including contractor relations and the project budget.
The court also rejected the developer's claim that the initial 60-day grace period was not eligible for compensation. According to the relevant provisions of the Sales Law (Apartments), the purchasers are entitled to compensation from the original contractual date once the grace period expires without delivery. Using a professional appraisal that estimated the fair monthly rent for a similar apartment at 9,700 shekels, the court awarded the couple the full amount they claimed, 443,775 shekels, plus linkage and interest. The developer was also ordered to pay 70,000 shekels for legal expenses and attorney fees.