In This Edition
- Welcome
- Featured Article – Eight Questions to Ask When Buying
Second Hand Real Estate in Israel
- Tip of the Month – Changes in Purchase Tax ("Mas
Rechisha") Rates
- Legal Vocabulary – "Arevut Banka'it" (Bank Guarantee)
- Subscription Information
- For Further Information
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Welcome to Israel Real Estate Law Insights
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Welcome to the latest issue of the Israel Real Estate Law Insights, published by
Nicole Levin Law Offices, experts in all aspects of real estate law in Israel.
You are receiving this newsletter because you signed up for it on our website or
because you filled out a form at a housing fair. Our newsletter focuses on the
legal aspects of buying, selling and renting property in Israel.
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Buying from Plans -
8 Essential Questions to Ask Your Contractor
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Buying a home in Israel can be stressful at the best of times. Buying a new home directly from a contractor can certainly push your anxiety level up even further. If you know what questions to ask, you can anticipate any issues and solve them before your minor headache turns into a major migraine.
Question 1: Are these the final plans?
The answer is likely to be no, unless these are the plans attached to the contract that you sign. Along the way, plans can change and the plans you see when you are deciding whether or not to buy may be changed right up until the contract is signed by you and the contractor.
If you sign the contract before the building permit has been issued, the plans may change later on because the local municipality may have requirements that force the contractor to change the plans in order to get the building permit. Commonly, the contract allows the purchaser to cancel the contract should the final plans be fundamentally different after the building permit is issued.
Most pre-construction contracts include clauses allowing the construction company to make changes in other places in the project. The law allows the construction company to make small deviations from the plans and quantities of items in the apartment.
Question 2: Can I change the contract in any way?
The answer is almost certainly yes. There is often room for negotiation about various clauses in the contract and your real estate attorney can help you negotiate the best conditions for your situation.
Make sure that the following clauses are acceptable to you: the price, the payment schedule, the date by which the construction company undertakes to deliver the apartment and the reasons for lateness, the manner in which your money will be protected, the warranty of the company for defects, registration of rights, the specifications of the apartment, and the plans.
Question 3: Is my money protected if you get into financial difficulties?
No one likes to think about this type of situation but these things do happen occasionally. The most common protection is a bank guarantee where the bank guarantees your investment in the building project until you receive the keys to your apartment or house. Other options include an insurance policy taken out by the contractor, and a payment schedule which allows for payments to be made only when pre-agreed stages in the construction...
Read the complete article in our articles section.
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Tip of the Month
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On August 12th the Israeli government decided on a change in the purchase tax levels. This change has not yet gone into effect and the government has not yet notified the public when it will go into effect. However, when this change does go into effect it will do so retroactively starting August 1st. This change effectively lowers the purchase tax that has to be paid for the purchase of residential property. In some instances it can be better to just pay the purchase tax as set out by the new purchase tax levels (or even the old ones) rather than ask for one of the partial exemptions available to purchasers under the law. Ask your attorney to calculate the tax for you both ways before reporting the transaction to the tax authorities so you can decide which method comes out cheaper for you.
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Legal Vocabulary
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"Arevut Banka'it" – This is the Hebrew for a "Bank Guarantee". When purchasing an apartment from a construction company the law requires the construction company to give you either a bank guarantee or insurance policy for the money you are paying. Consult your attorney about this and make sure the bank guarantee or insurance policy is in place. This is the way to protect your money in case the construction company goes bankrupt in the middle of the construction.
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Subscription Information
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For Further Information
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Additional information can be found at:
http://www.levinlawoffices.co.il/free.shtml
Further interesting articles can be found at:
(NOTE: New articles available!)
http://www.levinlawoffices.co.il/articles.shtml
If you have any further queries please feel free to make use of the Contacts page on our website:
http://www.levinlawoffices.co.il/contact.shtml
