Buying a new apartment from a contractor

Our firm consults in acquisitions of new apartments from contractors, acquisitions of pre-built apartments “on paper”.

Previously, it was a common practice in such acquisitions that the buyer would pay some of the contractor’s legal fees. Recently, the fee that the contractor is allowed to demand to cover their legal expenses was limited to NIS 5,000 + VAT.

It should be clear, even though the buyer pays the attorney of the contractor, the attorney is not a consultant of the buyer and has no fiduciary obligation to the buyer, but to the contractor only. Therefore, his or her presence is of no help to the buyer who needs the services of their own legal consultant .

In our role as consultants for buyers, we review and perform following steps:

• Examine the nature of the legal rights being sold and make sure they are not subject to any third-party rights, foreclosure, mortgage, or other restrictions.
• Make sure that the building received a building permit and that the sketch of the apartment is consistent with the permit.
• Make sure that payment is made against proper collateral, usually the collateral specified by law.
• Compare the technical specifications to the negotiation representation and sales prospect, to make sure that no commitment was neglected.
• Consult the buyer in other matters, such as changes, delays in delivery, and more.