Management Firm Ordered to Repay 88,000 Shekels for Unauthorized Charges
Translated & summarized from Bizportal by baba
A management company in Hod Hasharon must repay over 88,000 shekels to two building resident committees for unauthorized charges and missing funds. The Supervisor of Real Estate Registration ruled that the company violated its contract by incurring expenses without prior written approval. The company also failed to transfer over 18,000 shekels to the committees. In addition to the repayment, the firm must pay 15,000 shekels in legal fees, while its counterclaim was dismissed.
The story in 6 lines · by baba
- Management firm Zach Nadir Holdings ordered to repay 88,011 shekels plus interest to building committees.
- Company charged for services not approved in writing, violating its contract.
- Over 18,000 shekels in resident funds were not transferred to the committees' accounts.
- Supervisor of Real Estate Registration cited company's disregard for contract terms.
- Company's counterclaim was entirely dismissed by the supervisor.
- Firm must also pay 15,000 shekels in legal fees and 5,000 shekels in court costs.
A real estate management company, Zach Nadir Holdings and Services, has been ordered to repay over 88,000 shekels (approximately $24,000 USD) to the resident committees of two buildings in Hod Hasharon for unauthorized charges and funds not transferred to the committees. The ruling came after the committees, whose members are volunteers, began scrutinizing monthly reports from the company, which managed the buildings for 19,000 shekels per month under a November 2017 agreement.
Beginning in late 2021, committee members noticed discrepancies, including late reports and a gap between resident payments and funds received by the committee. The contract stipulated that any work or expense beyond the monthly fee required prior written approval from the committee, a clause the Supervisor of Real Estate Registration, Erez Steinberg, emphasized the company knowingly disregarded. Steinberg noted that even verbal approval, like a "like" on WhatsApp, would have sufficed, according to the company's manager, Yinon Zach.
Among the disputed charges were monthly fees for air fresheners despite the contract including them, a 5,043 shekel charge for a fire system inspection explicitly stated as included in the management fee, and a 2,043 shekel charge for a semi-annual parking lot wash. Zach claimed some of these were discussed and approved, but failed to provide evidence. He also could not recall the reason for a 515 shekel charge for a SIM card renewal for the parking lot gates, which was billed a month after the committee had already paid for it.
The supervisor reviewed 14 disputed charges, finding most unsubstantiated. The committee representative, Zvika Amit, confirmed approval only for a 3,000 shekel charge for installing Wi-Fi in the parking lot, and no negligence was proven regarding this item. Accountant Liran Ben Avi's review revealed that 9,941 shekels were missing in 2020 and 8,238 shekels in 2021, with the company failing to submit a counter-expert opinion.
Steinberg expressed difficulty trusting Zach's account, rejecting the company's defense that the committee had approved the reports in real-time, citing the volunteer nature of committee members and the company's late submission of reports. The company's counterclaim, which included demands for management fees for January 2022 and compensation for emotional distress, was entirely dismissed. The company will also pay 15,000 shekels in legal fees and 5,000 shekels in court costs.