Developer Must Pay Monthly Compensation for Delayed Apartment Deliveries
Translated & summarized from Calcalist by baba
A Herzliya court ordered a developer to pay monthly compensation to nine apartment buyers in Petah Tikva due to a 23-39 month delivery delay. The interim order, considered exceptional, mandates payments from October 21, 2026, until actual delivery. The court denied a request to force construction completion, citing the lack of an occupancy permit. The developer was also ordered to pay NIS 10,000 in legal costs.
The story in 5 lines · by baba
- Developer ordered to pay monthly compensation to nine apartment buyers for significant delivery delays.
- Compensation ranges from NIS 6,250 to NIS 7,500 monthly, starting October 21, 2026.
- Apartment delivery delays range from 23 to 39 months beyond contractual dates.
- Court denied request to compel construction completion due to missing occupancy permit.
- The developer must pay NIS 10,000 in legal costs to the buyers.
A court in Herzliya has ordered a real estate developer to pay monthly compensation to nine buyers of apartments in a urban renewal project in Petah Tikva. The compensation, ranging from NIS 6,250 to NIS 7,500 per month, will be paid from the date of the court's order until the apartments are actually delivered. This decision comes after the court determined that the current delay in delivering the apartments ranges from 23 to 39 months beyond the contractual dates.
The ruling is considered unique and exceptional because it grants an interim mandatory financial order early in the legal proceedings. The main lawsuit, seeking approximately NIS 1.49 million for past delays, has not yet been decided and will be heard later. The court partially accepted the buyers' request, instructing the developer, "Hitnachalut - Haim Cohen 28 Petah Tikva," to provide ongoing monthly compensation as stipulated by the Sales Law (Apartments) until the apartments are handed over.
However, the buyers' request for an order to complete construction and transfer possession was denied due to the absence of a "Form 4" (occupancy permit). The court noted that the buyers purchased their apartments in 2021-2022, with contractual delivery dates between July 2023 and November 2024. Construction is still unfinished, and the significant delay has left buyers needing to arrange and fund alternative housing.
Judge Eilat Haranof stated that the developer is in breach of its contractual obligation to deliver the apartments on time, with delays of two to over three years. She emphasized that the law mandates that statutory compensation be paid monthly to cover the ongoing damages of needing alternative housing. The interim order will remain in effect until a final judgment is rendered or further court decisions are made.
The request for an order to complete construction was rejected because the transfer of apartments is contingent on obtaining Form 4. The court also dismissed the claim against another company, finding it was not a party to the sales agreements and its involvement had not been proven. The developer was ordered to pay the buyers NIS 10,000 in legal costs.
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