Israeli Courts Order Builders to Deliver Delayed Eilat Homes Despite Payment Disputes

Israeli courts have ruled against a construction company involved in a prolonged legal dispute over a residential project in Eilat, ordering the firm to hand over homes to buyers despite ongoing payment disagreements. The rulings came after buyers accused the builder of demanding excessive payments as a condition for handing over apartments, despite delays of nearly two years and failure to pay statutory compensation for the delay.

In one case, Herzliya Magistrate's Court Judge Boaz Ben-Amati granted a temporary order compelling the company to deliver a villa to a couple who had nearly completed payment. The company claimed the buyers owed about 200,000 shekels, while the buyers argued the true balance was closer to 40,000 shekels after deducting 466,000 shekels in unpaid delay compensation. The court criticized the builder for acting in bad faith by refusing to offset mutual debts and ordered immediate delivery of the property along with 10,000 shekels in legal fees to the buyers. The builder's appeal was rejected.

A second ruling by Judge Tzahi Almog addressed similar claims from two families also purchasing homes in Eilat. The court ordered the builder to transfer the apartments upon payment of agreed sums, without prejudice to ongoing financial claims to be resolved later. According to the buyers, the company inflated the debt with accrued interest and linkage differentials during the delay period, demanding up to 850,000 shekels from one family, while the buyers estimated their true debts at 250,000 and 180,000 shekels respectively.

Attorney Erez Asraf, representing the buyers, highlighted a growing trend where builders delay delivery, withhold legally mandated compensation, and then demand inflated final payments as a condition for handing over keys. He emphasized that the courts affirm buyers’ rights to offset delay compensation against outstanding payments and reject the use of property keys as leverage. The rulings allow buyers to move into their homes promptly while financial disputes continue in court, sending a clear message against what Asraf terms "key ransom" tactics by contractors.