Developer Fined NIS 350,000 for Delayed Apartment Deliveries
Translated & summarized from Bizportal by baba
A Tel Aviv court ordered developer Yahalom B.K. to pay 38 buyers NIS 350,310 for delayed apartment deliveries in Yoken'am. The judge rejected the company's excuses, including COVID-19 and military operations, stating that non-functional elevators rendered apartments uninhabitable. Seventeen of the 20 apartments will receive compensation, with the highest amount exceeding NIS 47,000. The company was also ordered to pay NIS 35,000 in legal fees.
The story in 5 lines · by baba
- Developer Yahalom B.K. ordered to pay NIS 350,310 to 38 buyers for delayed apartment deliveries.
- Judge rejected company's excuses including COVID-19, military operations, and supplier delays.
- Apartments without functional elevators were deemed uninhabitable by the court.
- 17 out of 20 apartments will receive compensation, ranging from NIS 12,000 to NIS 48,000.
- The company must also pay NIS 35,000 in legal fees to the buyers.
A Tel Aviv Magistrate's Court has ordered the real estate company Yahalom B.K. to pay NIS 350,310, plus interest, to 38 buyers of 20 apartments in Yoken'am for late delivery. The buyers had sued for NIS 1,159,941, claiming the apartments were delivered four to nine months late. Judge Adi Hader partially accepted the claim, rejecting most of the company's excuses, including the COVID-19 pandemic, military operations, authorities, and suppliers.
The apartments, purchased between 2020 and 2022 under both the "Price for the Resident" program and the open market, were contractually due by May 24, 2023, or December 31, 2022, for "Price for the Resident" units. However, most were delivered in August and September 2023. The buyers reported receiving indifferent responses from the company regarding compensation until they filed the lawsuit.
The court acknowledged a clause in "Price for the Resident" contracts that allowed for delivery delays if the building permit was issued late. The permit was delayed by 162 days, pushing the delivery date to June 11, 2023. Judge Hader found this clause valid, as buyers did not claim to be misled. Consequently, three families who received their apartments within a 60-day grace period will not receive compensation.
The judge dismissed the company's claims that COVID-19, military call-ups during "Swords of Iron War," and supplier delays caused significant delays, stating that the pandemic is not a "magic word" to excuse all delays and that the company failed to provide sufficient proof like work logs. He also ruled that delays caused by municipal or utility companies are a risk the contractor must factor in and cannot be used to avoid compensating buyers.
A key ruling stated that a certificate of occupancy does not suffice if essential amenities like elevators are non-functional, particularly for higher floors. For six families living on the fifth floor and above, the delay was counted until the elevators were operational in mid-September 2023. One buyer, Maksym Segal, who signed a waiver after receiving NIS 10,000, was awarded NIS 30,525, as the judge determined the payment was for a specific apartment modification, not a broad waiver of all compensation rights, especially for legally mandated delay compensation.
Out of 20 apartments, 17 will receive compensation ranging from approximately NIS 12,000 to NIS 48,000, with the highest amount going to a family on the seventh floor who waited 137 days. The court also awarded the buyers NIS 35,000 in legal fees and one-third of court costs, noting that they received only about a third of their claimed amount and did not initially attach contracts to their lawsuit.
