Does the apartment look perfect? These are the checks you must do before buying

With the end of the school year, many families, individuals, and students are taking advantage of the summer vacation to move into an apartment they have purchased. Buying an apartment is a significant economic step and, for most people, the largest financial transaction of their lives. However, it is important to understand that finding the apartment is only the first step in the process. Calcalist has compiled a guide for buyers with the help of Adv. and CPA Yaron Tikotzky, founding partner and head of the Real Estate and Urban Renewal Department at the law firm Doron, Tikotzky & Co.

Planning check and illegal construction

Before buying an apartment, it is mandatory to perform a planning check to ensure that it was built legally and that there are no illegal construction works (such as a balcony that was closed without a permit or a storage room that was turned into a residential unit). To do this, you must order the building file from the local authority and compare the original permit plan to the actual state of the apartment. Remember: the existence of illegal construction works in the property may lead to heavy fines and demolition orders, and may even lead to a refusal by the bank to provide a mortgage.

Tax liabilities: Betterment levy, Mas Shevach, and Mas Rechisha

• Betterment levy (Heitel Hashbacha): Collected by the local authority for the approval of a city building plan (TABA) that increased the property's value. One should contact the local planning and building committee to check for such debts.

• Real estate betterment tax (Mas Shevach): A tax imposed on the seller for the profit made from the sale. By law, the buyer is obligated to deduct part of the proceeds and transfer them directly to the Tax Authority (a mechanism known as 'Mas Shevach advance'), otherwise, the apartment cannot be registered in the Tabu.

• Purchase tax (Mas Rechisha): Imposed on the buyer; its amount is determined as a percentage of the property price according to tax brackets. It is recommended to check the expected liability in advance using the Tax Authority's simulator.

Verifying the property's status

To ensure the property is free of debts, liens, and encumbrances, you must obtain an up-to-date "Tabu extract" (or a certificate of rights from the Israel Land Authority), conduct a check in the Pledge Registrar, and verify the absence of municipal tax (Arnona) or water debts with the local authority.

Urban renewal (TAMA 38 and Pinui-Binui)

When purchasing an apartment in an urban renewal project, it is crucial to understand the project stage. Once the purchase contract is signed, the buyer steps into the seller's shoes and cannot cancel the contract with the developer or oppose the project. Any unilateral attempt to withdraw will be considered a fundamental breach of contract.

Home inspection

Adv. Tikotzky highly recommends inviting an engineer for a home inspection before purchasing. A professional can discover "hidden defects" such as severe moisture, plumbing leaks, structural cracks, and faulty electrical systems. This check allows the buyer to conduct informed negotiations and protects both parties from future claims.

Red flags

It is recommended to stop the process immediately if:

• There is extreme pressure from the seller or broker to sign quickly without preliminary checks.

• There is a refusal to provide basic documents like the Tabu extract or building plans.

• There is a material discrepancy between the actual area and the building permit.

• There are unusual payment demands, such as requests for cash payments "under the table."

This is a legal review and should not be seen as legal advice.