Massive lawsuit against contractor: tenants waited years for delivery and are demanding millions

Families who purchased apartments in a project in the settlement of Tekoa in Gush Etzion, and expected to move into their homes by the summer of 2024, were forced to wait about a year and a half, and sometimes two additional years, until their apartment was delivered to them.

During the waiting period, like many others who face delays in delivery, many of the buyers were forced to pay simultaneously a mortgage on the apartment they purchased and rent for their temporary place of residence. Others were required to extend rental contracts time after time and deal with financial obligations they took upon themselves under the assumption that within a short time they would be able to move into their new home.

59 of the apartment owners in the project, represented by Adv. Emmanuel Yuzuk, from the law firm Yuzuk-Malkin, filed a massive lawsuit for compensation for the delay in the delivery of the apartments, and other alleged failures against the Gush Etzion Development Company Ltd., which is responsible for the construction of the project.

Alongside the compensation for the delay, the lawsuit also includes demands for the return of municipal tax (Arnona) payments, payment of credits, and compensation for components in the apartment that were not provided, or those that were provided in a quality lower than the promised specification.

According to the lawsuit, the buyers entered into agreements with the company during 2021 for the purchase of the apartments in the project. In the agreements, the company undertook to deliver the apartments within 24 months from the date of receiving the building permit. During 2023, an appendix was signed between the parties that set a new and uniform delivery date - June 30, 2024. However, this date also passed, and the apartments were not delivered.

Despite what is stated in the agreement, the delivery of the apartments began only at the end of June 2025, about a year after the updated date, and continued gradually during the months that followed, so that some of the apartments were delivered only in January and March 2026, with the last of them being delivered at the beginning of July this year. According to the lawsuit, the average delay in the delivery of the apartments stands at about a year and a half.

Attached to the lawsuit is an appraiser's opinion, which examined the appropriate rent for similar apartments in the area, for the purpose of a detailed calculation of the compensation due to each of the buyers. The compensation was calculated according to the delivery date of each apartment and the rent of a similar apartment in the area. According to the opinion, the average compensation for the delay in delivery stands at about 145,000 shekels per apartment.

However, according to Adv. Yuzuk, the delay in delivery is only part of the dispute with the company. He claims that in the agreement signed between the Gush Etzion Development Company and the settlement of Tekoa, it was determined that the company would bear the municipal tax payments on the plot until the delivery of the apartments. It was also determined that if the company wishes to impose the payment on the residents, it must include it in advance in the price of the apartment and bring it to their attention within the framework of the first price offer.

Despite this, the contracting company began to charge the buyers for municipal tax as early as July 1, 2022 - a long time before they received their homes. The charge was set at 1,179 shekels for each two-month billing period for each apartment, and the lawsuit demands that the company return 780,000 shekels to the buyers for these payments.

The lawsuit raises a large number of additional claims regarding items that were supposed to be included in the apartments, and are missing from them. For example, it is claimed that the company undertook to provide each apartment with two shower enclosures and a sink in the service balcony, but these were not provided. In a group of 12 apartments, it is also claimed that additional items were not provided in the kitchen, including a kosher sink, a kitchen faucet, and wall cladding.

In addition, it is claimed that some of the buyers received a credit in the amount of 28,940 shekels that was given to them for the kitchen. According to Adv. Yuzuk, this compensation is supposed to be linked to the construction input index from May 2020 until the actual payment, but the buyers received it without the accumulated linkage differences.

Another dispute concerns the windows. According to the lawsuit, in the specification, the company undertook to install window profiles of the Klil 7000 or 9000 type, depending on the size of the openings. According to Adv. Yuzuk, in practice, windows of a significantly lower standard were installed in the apartments. In this matter, the buyers are not satisfied with monetary compensation, but demand that the court order the company to replace the windows and install in their place windows that match the specification.

According to the lawyer, since the sales agreements were signed in 2021, the old compensation mechanism applies to them, which was determined in the Sales Law in its version that was in effect then. According to this mechanism, in the event of a delay in the delivery of an apartment exceeding 60 days, the buyer is entitled to compensation without the need to prove damage, starting from the contractual delivery date. During the first eight months of the delay, the compensation is calculated according to 1.5 times the rent of a similar apartment in the area, and subsequently according to 1.25.

Based on this mechanism, the company is required to compensate the buyers with about 4.8 million shekels for the delays in delivery. To this were added 780,000 shekels for the collection of municipal tax contrary to the agreement, about 130,000 shekels for credits and items that were not provided, and 38,000 shekels - the cost of an expert appraiser's opinion. The total amount of the lawsuit was set at more than 5.8 million shekels, plus linkage differences and interest, legal expenses, and attorney's fees. The lawsuit was filed in these days to the District Court in Jerusalem. A statement of defense has not yet been filed.