Developer Ordered to Pay Monthly Compensation to Buyers for Delayed Apartments
Translated & summarized from Ynet by baba
A Herzliya court ordered a developer to pay monthly compensation to nine apartment buyers in Petah Tikva due to a significant delay of 23 to 39 months in delivering their homes. The interim order, considered unusual, mandates payments from October 2026 until delivery. The court denied a request to force project completion, citing the lack of an occupancy permit. The main lawsuit for NIS 1.49 million in damages is still pending.
The story in 6 lines · by baba
- A developer must pay monthly compensation to nine buyers for delayed Petah Tikva apartments.
- The delay in apartment delivery is between 23 and 39 months past the contract date.
- The court ordered monthly payments of NIS 6,250 to NIS 7,500 until apartments are delivered.
- The interim order is considered unique and was granted early in the legal process.
- A request to force project completion was denied due to the absence of an occupancy permit.
- The main lawsuit seeking NIS 1.49 million in damages for past delays is still pending.
A court in Herzliya has ordered a real estate developer to pay monthly compensation to nine apartment buyers 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 is considered unique and unusual because it grants an interim mandatory financial order early in the legal proceedings.
The court ruled that the delay in delivering the apartments currently stands at a prolonged period of 23 to 39 months beyond the contractual dates. The developer, "Tichnun - Chaim Cohen 28 Petah Tikva," purchased the apartments from the company in 2021-2022, with contractual delivery dates ranging from July 2023 to November 2024. However, construction is not yet complete, and the required "Form 4" (occupancy permit) has not been obtained.
The buyers had filed a main lawsuit seeking approximately NIS 1.49 million for past delays, along with other remedies. As part of their request for interim relief, they asked for an order compelling the company to pay ongoing monthly compensation from the date of the application until delivery, and an order to complete the project. The buyers argued that the compensation is intended to cover alternative housing costs in real-time, not retroactively.
The developer argued that the interim relief sought was identical to the final financial relief and should not be granted before the main lawsuit is decided. They also claimed that the buyers' chances of success were slim, citing force majeure, contract terms, and a contractual clause for a 60-day grace period that they believe negates the buyers' right to compensation.
Judge Eilat Haranof determined that the case warranted an interim mandatory order, acknowledging the developer's breach of contract. She noted the significant delay of two to over three years and the ongoing monthly damage to the buyers, who are forced to find and fund alternative housing. The judge ordered the developer to pay the monthly compensation starting from October 21, 2026, until the apartments are delivered or a final judgment is issued.
However, the request for an interim order to compel the completion and delivery of the apartments was denied because "Form 4" has not yet been issued. 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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