Things To Know About Purchasing A New Apartment In Israel

Land ownership in Israel is quite different from that in many other countries with similar economies. The distinctive pattern of land ownership is linked to the history of the country. Israel was declared independent from the British in 1948. After the Real Property law proposed by the legislature came into effect in 1969, the state took over the ownership of non-private lands that were previously owned by the British. In addition to that, the Jewish National Fund also purchased large areas of land. Together, these lands make up 93% of the total land area of Israel.

Private lands and State owned lands are the two types of lands in Israel. While private individuals have the ownership of Private Lands, state owned lands can only be leased out for specific periods of time. Private parties and organizations are not granted the ownership of state owned lands. Abandoned lands that have no known owners are managed by the state. How to find abandoned real estate in Israel? The state has a separate department for locating and maintaining abandoned properties and making efforts to find out the legit owners.

Purchasing A New Apartment From A Contractor

Before finalizing the contract for the purchase of a new apartment from a contractor, the purchaser should review the specification and blueprint of the apartment. As per the Sales (Apartments) Law-1973, it is the obligation of the seller to attach the Specification to the contract. If a buyer isn’t given any of these documents, there could be huge differences between what the purchaser expected and what they got.

The contractor should stipulate the apartment size in net terms in the Specification. Stipulation in gross terms is not desirable because it will include walls, common property etc.  However, it is important to include a clear definition of the “common property” that is attached to the apartment that you purchase.

The Sales Law-1974 of Israel specifies five different types of guarantees and the contractor is required to provide the purchaser of an apartment at least one of these guarantees before receiving a sum that is greater than 15% of the purchase price.

  • Bank guarantee
  • Insurance policy
  • Lien
  • Caution note
  • Transfer of property title to the name of the purchaser at the land registry.

In case the contractor fails to provide any guarantee (mentioned above) to the purchase, then the purchaser has to transfer payments only according to the progress made in the construction.

Knowing the rules and regulations regarding apartment purchase is important to avoid any losses you could incur in the purchase.

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