Construction defects and loss of apartment value

Today, with many people buying real estate as an investment or putting their savings into a property, loss of value has become a concept at the center of public discussion. Anyone buying property, whether a storage room or a luxury apartment, now checks carefully whether it risks losing value.

Loss of value in real estate can arise for several reasons: changes to the outline plan (tav'a) that alter the designated use of the area, or construction defects that reduce the apartment's value. This article looks at loss of value caused by construction defects.

What are construction defects?

Construction defects is an umbrella term for a wide range of flaws in a structure that harm its quality and its monetary value. Some are significant, even dangerous; others are minor and do not affect how the property functions.

Some are just a deviation from building regulations and are easy to fix, such as a shower cubicle whose design does not match the architectural plan. Others cannot be fixed at all, such as ceilings lower than the regulations allow, or balconies smaller than what was planned.

Anyone versed in real-estate law knows that an apartment's value is set by the property's condition. When a defect cannot be fixed, the direct result is a lower apartment value, and the buyer can sue and claim compensation for that loss.

Which defects cause a loss of value?

Not every defect lowers an apartment's value. Tiny, insignificant flaws, or purely cosmetic ones that do not interfere with how the structure functions, do not count. It is the defects that cannot be fixed, or whose repair is uncertain, that cause a real loss of value.

So anyone who wants to avoid distress, unnecessary expense or damage that might develop in an apartment they are about to buy can take the simple step of an apartment inspection. During that inspection, engineers and other experts check for any construction defects, whether the apartment was built to the various building regulations in Israel, whether it used suitable materials, whether the area's outline plan is about to change, and other factors that ultimately determine quality of life there.

Construction defects are not limited to ordinary apartments and buildings: they also apply to mobile, lightweight structures, which must meet the same standards that guarantee a structure is sound and fit for use.