Late delivery of a new apartment
Your developer missed the date? Israeli law guarantees monthly compensation without proof of damage. We calculate what you are owed and collect it.
What the law says when the developer is late
Our late apartment delivery lawyers in Israel act for buyers of new homes across Petah Tikva, Rosh HaAyin, Givat Shmuel, Ramat Gan, Tel Aviv and central Israel – from calculating statutory compensation for late delivery to demand letters and claims against developers.
Section 5A of the Sale (Apartments) Law, 1973 grants buyers compensation without proof of damage when the seller fails to make the apartment available on the contractual date. Compensation is measured by the rent of a comparable apartment (similar size and location) and is payable at the end of each month. If the contract sets a higher agreed amount, the higher figure applies. The mechanism depends on when the contract was signed, because Amendment No. 9 changed it in 2022:
| Period of delay | Contracts from 7.7.2022 | Contracts up to 6.7.2022 |
|---|---|---|
| First month | No compensation (grace period) | Delivery within 60 days – no compensation; a delay beyond 60 days triggers compensation from the contractual date itself |
| Months 2–4 | Rent ×1 | |
| Months 5–10 | Rent ×1.25 | Months 1–8: rent ×1.5 |
| Month 11 onward | Rent ×1.5 | Month 9 onward: rent ×1.25 |
Source: Sale (Apartments) Law, 5733-1973, s. 5A (both versions).
Calculator: how much are you owed?
Late-delivery compensation estimator
Estimates the minimum statutory compensation under section 5A of the Sale (Apartments) Law. It is not a substitute for reviewing your contract.
Force majeure, the war and labour shortages
Under the current version, the developer is exempt from statutory compensation only if the delay was caused solely by the buyer, or if the strict conditions of section 18(a) of the Contracts (Remedies for Breach) Law are met – circumstances the seller did not and could not have foreseen or prevented when the contract was made.
Since October 2023 many developers cite the war, shortages of workers and site closures. These arguments are examined on their facts: when the contract was signed, what was foreseeable then, how long work actually stopped, and how that stoppage relates to the specific delay. A general statement does not create an automatic exemption.
"Sign a waiver and we'll hand over the keys"
A waiver of rights regarding late delivery (for contracts from 7.7.2022) or defects, demanded as a condition for handover, repairs or a transfer of rights, is void under section 7A. Do not sign unclear documents on handover day – photograph them and consult us first.
Indexation stops at the contractual delivery date
For contracts from 7 July 2022, payments may not be linked to any index, except that the parties may agree to link up to half of each payment to the Construction Inputs Index, with the 20% paid at signing unlinked. Indexation may run only until the contractual delivery date – even if the apartment is delivered late (s. 5C).
Is your money protected? Sale Law guarantees
The Sale (Apartments) (Assurance of Investments of Purchasers) Law requires the developer to secure every payment above 7% of the price – usually by a bank guarantee or insurance policy – and to collect payments through a voucher booklet into the project account. When a long delay signals financial distress, these guarantees are the buyer's safety net. See also insolvency.
Late delivery and the "single apartment" purchase tax
A buyer of a new apartment who still owns another home benefits from the single-apartment purchase-tax brackets if the old home is sold within 12 months of the date the new one was due to be delivered. Where delivery is delayed for reasons beyond the buyer's control, the 12 months run from actual delivery (Real Estate Taxation Law, s. 9(c1c)(2)(b)).
How to act – step by step
- Collect documents: contract and specification, change orders, every notice of postponement, payment receipts.
- Calculate the period: what is the contractual date, and is any extra "grace period" in the contract valid under the law?
- Establish the rent of a comparable apartment – the figure the whole calculation rests on.
- Written demand to the developer, including monthly payment as required by law.
- Claim – often jointly with other buyers in the same project.