Court Rejects Buyer's Compensation Claim Against Seller Who Withdrew from Eilat Property Deal

The Beersheba District Court has dismissed a lawsuit filed by a woman seeking compensation from a property owner in Eilat who backed out of selling his apartment to her. Judge Yaakov Danino ruled that no binding contract was formed between the parties. Although the seller acted in bad faith, the court found no proof of damages entitling the buyer to compensation.

The buyer decided in June 2024 to purchase an apartment in Eilat and subsequently put her own apartment in Kiryat Bialik up for sale. After visiting the Eilat property and learning of construction violations, she initially offered 1.9 million shekels, later increasing it to 2.03 million shekels, while the seller was asking 2.2 million shekels. Negotiations proceeded through intermediaries and lawyers, involving draft agreements and correspondence.

However, in October 2024, the seller announced his decision not to sell, citing his inability to secure financing for a replacement property. The buyer, who had already sold her Kiryat Bialik apartment for 1.07 million shekels, sued for compensation, arguing that binding agreements had been reached and demanding a pre-agreed sum of 203,000 shekels. Alternatively, she sought compensation for the loss of a discount or for damages incurred from selling her apartment below market value.

The seller contended that the discussions had not matured into a contract and that he had never agreed to sell without securing financing for another property. Judge Danino acknowledged that while agreements were reached on the price and handover date, significant issues like the payment schedule remained unresolved. Therefore, he concluded, the "meeting of the minds" required for a binding contract was absent, precluding the buyer from claiming the agreed-upon compensation.

Despite this, the judge found the seller acted in bad faith by failing to inform the buyer and her lawyer about the crucial condition of securing a mortgage for a replacement property. Nevertheless, this finding did not benefit the buyer, as her claim for reliance damages of approximately 133,000 shekels was denied. The court noted she had decided to sell her own apartment before even seeing the seller's property and that evidence did not prove she accelerated her sale due to the potential Eilat purchase. Her claim for expectation damages of about 171,000 shekels was also rejected, as no actual loss of profit from the failed deal was demonstrated.

Ultimately, the buyer's lawsuit was fully dismissed. However, given the seller's bad faith, the judge decided not to award court costs against the buyer.