Developers can no longer rely on changes to an apartment,
requested by the purchaser, as reason to avoid payment of
compensation for late delivery. This was ruled recently by the
Supreme Court in a case involving a dispute between purchasers of
an apartment and a contracting company.
The Sale (Apartments) Law states that a delay of over 60 days
from the date specified in the sale contract for the delivery of
the apartment to the purchaser, means that the purchaser will be
entitled to compensation without proof of damage, and this from the
first day of delay.
In the abovementioned case, the sale contract which was signed
by the purchasers and the contracting company stated that any
request to change or supplement the apartment will postpone the
delivery date of the apartment for at least 60 days.
It should be noted that clauses of this nature are common and
appear in almost every sale contract from a contractor.
The Supreme Court ruled that the wording of the relevant clause
is broad and vague, and gives the contractor unlimited options to
determine the date of delivery, which creates uncertainty among the
purchasers. Thus, the contractor prevents the purchasers from
preparing themselves for a new and clear date on which the
apartment will be delivered to them, and to plan their moves
The Court further ruled that from now on, the contractor cannot
rely on sweeping clauses in apartment sale contracts, which include
provisions exempting him from paying compensation for delays in
delivery of apartments, in any case where changes to the apartment
were ordered by the purchasers.
However, the Court held that the parties can agree, for example,
on a new and concrete postponed delivery date, in the case of
making changes in the apartment at the request of the purchaser, in
a later agreement signed by the parties.
The Court also noted that a new and postponed delivery date that
will be determined by agreement, as mentioned, may be examined by
the Court, in terms of its reasonableness in relation to the scope
of changes made to the apartment and their nature.
Originally published on March 6, 2016
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