Developers Liable for Misrepresenting Private Roof Space

A Tel Aviv court has ordered real estate developers Africa Israel and Danya Sibas to compensate three couples who purchased apartments on the top floor of a residential project in Be'er Yaakov. The homebuyers claimed the developers misled them about the separation of roof areas allocated to their apartments. The six plaintiffs bought apartments on the 16th floor of the "Sivnei Talmi Menashe" project between 2011 and 2012, with each apartment assigned a 105-square-meter roof area. They alleged that sales representatives convinced them to buy by presenting the roofs as private, separate spaces suitable for hosting events.

Upon delivery, however, the buyers discovered that instead of concrete walls separating the roof areas and common property, temporary metal fences on concrete blocks, about 1.2 meters high, had been installed. They also complained about ventilation pipes emitting foul odors. The buyers initially sought NIS 1.5 million in damages, demanding concrete walls and separate entrance doors, or alternatively, compensation for diminished property value.

A partial agreement was reached on some claims, reducing the original claim amount. The court then focused on the issue of diminished value. Africa Israel and Danya Sibas argued that their sales contracts and technical specifications did not commit them to building partition walls, stating the buyers received exactly what was agreed upon: attached roof areas, not roof terraces.

Judge Ehud Schwartz rejected the demand for concrete walls but accepted the buyers' claim of a breach of disclosure duty. He ruled that the buyers had a reasonable basis to believe, based on sales representatives' presentations, that they would have private use of the roofs, implying some form of separation. A key turning point was the project's architect testifying under cross-examination that the companies knew as early as 2008, three years before the sales, that the separation would be by fences on concrete blocks, and that the roof was not designed for exclusive private use.

The judge determined the companies should have disclosed the fencing plan approved in the permit, or at least its nature, rather than merely listing what would not be built. He called it a "failure of disclosure during negotiations." However, he did not find the non-disclosure to be intentional or a marketing tactic, considering the buyers were represented and could have investigated further.

Ultimately, each couple was awarded NIS 38,000 for diminished value, NIS 15,000 for emotional distress, and NIS 8,000 for legal expenses and attorney fees. The construction giants were jointly ordered to pay a total of NIS 183,000 to the three couples, plus linkage and interest.