Israeli Court Orders Buyers to Pay Seller Nearly 200,000 Shekels After Cancelling Apartment Deal

A magistrate court in Ashkelon recently ruled that a couple who canceled a property purchase in the city must pay the seller approximately 200,000 shekels in compensation. The buyers had claimed the seller breached the contract by failing to register the apartment in his name within the agreed 120 days. However, Judge Ido Kafkafi found that the seller had made all reasonable efforts to complete the registration and was not at fault for the delay, which was mainly caused by the construction company.

The dispute began about two years ago when the parties signed an agreement for the purchase of an apartment on HaTayasim Street for 1.82 million shekels. At signing, the property was not yet registered under the seller's name, who committed to completing the registration within 120 days, provided the delay was not his fault. When the registration was not completed on time, the buyers unilaterally canceled the deal after ten months and sued for a contractual penalty of 10% of the purchase price, alleging a fundamental breach.

The seller, a Canadian resident, argued that he had done everything possible to advance the registration from abroad and that the delay was due to circumstances beyond his control. He claimed the buyers breached the contract by canceling without authorization and demanded compensation of 182,000 shekels.

Judge Kafkafi ruled that the contract's wording did not guarantee absolute registration within 120 days but allowed for delays beyond the seller's control. The judge emphasized that if the buyers wanted a strict cancellation right after 120 days, they should have included a specific termination clause. Since they did not, their unilateral cancellation was a breach. Consequently, the court ordered the buyers to pay the agreed compensation plus legal fees totaling 202,000 shekels.