Tel Aviv Court Upholds 134,000 Shekel Payout for 21-Month Delay

A Tel Aviv District Court has dismissed an appeal by real estate developer Ov HaKoreh, upholding a lower court ruling that mandates a 134,188 shekel payout to a homebuyer due to a 21-month delivery delay. Presiding Judge Abigail Cohen ordered the company to pay an additional 15,000 shekels in legal costs and attorney fees.

The apartment, part of a Tama 38 urban renewal project in Tel Aviv, was contractually scheduled for handover in March 2019. However, the keys were not handed over until January 2021, roughly a month after the building secured its mandatory Form 4 occupancy permit in December 2020. The buyer, who does not speak Hebrew, was represented by her son via a notarized power of attorney. In 2020, she filed a lawsuit seeking 174,335 shekels, encompassing compensation for the delay, moral damages, and notary expenses.

The developer argued that the apartment was ready in March 2019 and that requested modifications added 90 working days, alongside a 60-day grace clause, setting the new deadline to August 1, 2019. The company maintained that the buyer took possession on paper but withheld the final payment. The Magistrate's Court rejected these arguments, noting that the building lacked a Form 4 permit in August 2019, and company witnesses were unable to substantiate relevant timelines.

Addressing the contractual compensation clause of 900 shekels per room per month—which would have totaled 2,700 shekels monthly for a three-room apartment—Judge Cohen affirmed that the provision violated the Sale (Apartments) Law. Statutory provisions cannot be contracted away to the detriment of the buyer. A court-appointed real estate appraiser assessed market rental value at 4,750 shekels per month, serving as the basis for statutory compensation calculations across the 21-month delay.