Developer Ordered to Pay Over Half a Million Shekels for Undelivered Penthouse

A court has ordered a real estate developer to pay NIS 443,775 in compensation to a couple for a penthouse that was significantly delayed in delivery. The couple, Yaakov Aryeh and Chudva Shkolnik, signed a contract in August 2021 to purchase a penthouse in a Tama 38 project in Petah Tikva. The developer, "Tichnun - Chaim Cohen 28 Petah Tikva," committed to delivering the apartment within 24 months, by August 11, 2023. However, more than three years later, the apartment remains undelivered.

The developer claimed force majeure, citing the war as a reason for the delay due to a shortage of construction workers. They relied on a contract clause allowing for delivery extensions in cases of war or mobilization. However, the Herzliya Magistrate's Court rejected this argument, noting that the original delivery date was set two months before the outbreak of the Iron Swords War. The judge stated that if the developer had adhered to the agreed timeline, the apartment would have been delivered before the war, and its consequences would not have affected the parties.

The court also found that the war was not the actual cause of the delay. During cross-examination, the company's representative, Nir Shar, admitted to significant issues with subcontractors throughout 2023. He described a situation where the first contractor unilaterally stopped working, threatened company staff, and refused to leave the site until early 2024, demanding payment. The second contractor, who began work in February 2024, also caused delays, with Shar admitting the company was "extorted" and that it was their "mistake" which cost them dearly. The judge ruled that the claim of war-induced delay was unsubstantiated and unsupported by work logs, especially since the company representative admitted that worker shortages were not an issue with the second contractor.

The court determined that the developer bore responsibility for all construction risks, including issues with subcontractors and unforeseen engineering challenges. The judge emphasized that the developer is responsible for contractor agreements, project budgets, and any construction problems that arise. The court also applied the provisions of the Sale (Apartments) Law, which mandates higher compensation than stipulated in the contract for delays. The couple is set to receive NIS 14,550 per month for the first eight months of delay and NIS 12,125 per month thereafter, totaling over NIS 443,000 for 35 months of delay, plus NIS 70,000 in legal fees and expenses. The construction of the penthouse is still ongoing.