The Sale (Apartments) Law: what it says and what you need to know

Apartment buyers and sellers alike need to understand the new Sale Law. The Sale (Apartments) Law, 5733-1973, is a key consumer law whose purpose is to protect people who buy new apartments from contractors, and so it naturally also has a direct effect on how the sellers of those apartments conduct themselves.

The law governs the relationship between the parties to the deal, from the negotiations and the signing of the contract, through the securing of the buyers' money, to the contractor's liability, which continues for several years after the apartment is handed over.

A thorough understanding of its sections is critical for preventing disputes and legal problems later on, and for ensuring a fair, transparent deal in which the buyer's rights are protected.

This article explains the Sale Law and the changes and updates made to it, and what they mean for the two sides of a real-estate deal: apartment buyers and contractors. With that understanding, each side can prepare properly and make the most of its rights.

What is the new Sale (Apartments) Law?

Amendment No. 9 to the Sale (Apartments) Law, which took effect in July 2022, brought significant changes intended to give apartment buyers better protection.

One of the main changes under the new Sale Law limits linkage to the Construction Input Index. Today only up to half of each payment can be linked to that index, and the first 20% of the apartment's price is not linked at all. Nor can payments be linked to the index after the contractual handover date, unless the delay was the buyer's fault or was caused by extreme, unforeseeable circumstances.

Another important change concerns compensation for late handover of the apartment. When the delay exceeds one month, the buyer is entitled to monthly compensation, and the amount rises the longer the delay lasts. It ranges from 100% of the rent for a comparable apartment, for a delay of up to four months, to 150% for a delay of 11 months or more.

It is important to note that a sale contract cannot depart from these provisions except in the buyer's favor. So if a contract signed between a contractor and the buyer of a new apartment contradicts the wording of the law to the buyer's detriment, the contract is not valid. In this way the amendments ensure transparency and better protection for apartment buyers.

Why a home inspection matters under the Sale Law

Under the new Sale Law, a professional home inspection (bedek bayit) has become more essential than ever. A thorough inspection of the property before the purchase can expose hidden flaws and defects that may lead to damage and significant expense in the future. Identifying problems early lets buyers make informed decisions and avoid unnecessary headaches further down the road, when it is already too late.

The risks and costs of not finding construction defects and leaks in time

When defects in a new apartment from a contractor are not discovered in time, a series of significant risks and costs can follow.

1. The later a defect is discovered, the more complex and expensive it is to repair. Dampness that is not dealt with in time, for example, can spread and cause serious damage to the building systems, the walls and the floors, to the point of requiring an extensive and costly renovation.
2. Late discovery can lead to the contractor's liability expiring. The Sale (Apartments) Law defines different inspection periods (tkufat bedek) and warranty periods for different types of defects. Once those periods end, it will be difficult or even impossible to make the contractor carry out the repair.
3. Defects that are not dealt with in time can harm the quality of life in the apartment and cause its residents ongoing discomfort. Beyond that, they can be a safety or health hazard, especially defects in the electrical system, the plumbing or the waterproofing.
4. Discovering defects after a long time can make the apartment harder to sell in the future, because potential buyers will shy away from an apartment with problems. Alternatively, the owners will have to lower the price and lose a great deal of money on it.

For these reasons it is important to have the apartment inspected thoroughly and professionally close to the time you receive it from the contractor, and to report every defect that is found immediately.

Arad Bedek Bayit: our commitment to a sound apartment for you

At Arad Bedek Bayit we place great value on client satisfaction. We are committed to giving our clients reliable, professional and transparent service throughout the inspection process. To that end:

– We stay in regular contact with our clients and update them at every stage of the inspection.

– Our professional team is available to answer any question or request from clients.

– We provide detailed, clear reports with photos and findings from every area of the home that was inspected.

– When significant defects are discovered, we offer our clients support and advice on the steps needed to have them repaired.

We invite you to contact us right away at 077-670-4444 for an answer tailored to your apartment. Every day counts.