Couple Awarded 352,000 Shekels After Receiving Smaller Apartment Than Promised in Israeli Project

A district court in Lod recently ruled in favor of a couple who received a four-room apartment instead of the five-room duplex they were promised in a luxury project in Rosh HaAyin. The court ordered the group purchase organizer and its manager to compensate the couple 352,000 shekels, including 282,000 shekels for lost opportunity and distress, plus 70,000 shekels for legal fees. The couple had joined the project after being shown plans for a five-room apartment, but later discovered that only four-room units would be built due to changes in the building permit process.

The couple alleged bad faith negotiations and breach of contract by the organizer and manager. They also sued Herzog Fox & Neeman law firm, which accompanied the project, claiming negligence for failing to notice discrepancies between the planning documents and the actual representations. However, the court found the law firm not liable, stating that the firm was not responsible for supervising the planning process and that the changes were made by the local planning committee without the firm's knowledge.

The court emphasized that the law firm’s duty of care did not extend to overseeing architectural or planning decisions and rejected the couple’s claim that the firm should have foreseen the permit issues. The ruling highlights the risks buyers face in group purchase projects where plans may change during licensing, and clarifies the limits of legal counsel’s responsibility in such developments.

The couple’s legal representation was by attorney Ehud Porat and partners, while Herzog Fox & Neeman represented the law firm. The organizer and manager did not present evidence or attend hearings, leading to a default judgment against them. The case underscores the importance of transparency and good faith in real estate group purchases in Israel.