The Consumer Council told the news corporation:
Consumer Council following High Court ruling: Consumers are entitled to compensation for delay in apartment delivery if
The construction companies did not prove that force majeure circumstances existed.
The High Court of Justice dismissed out of hand a petition by a construction company seeking a blanket exemption from paying compensation for a delay in the delivery of an apartment due to the "Iron Swords" war. The Consumer Council: If the construction company refuses to pay compensation, you can use the sample claim on the Council's website to file a claim.
The Israeli Consumer Council receives consumer complaints against contractors/developers regarding delays in the delivery of an apartment, and the contractor/developer's refusal to pay compensation as prescribed by law, claiming that the delay stems from the war that broke out on October 7.10.2023, XNUMX. In some cases, the contractors state that the delay in the delivery of an apartment stems from the conduct of the various authorities and/or from a shortage of workers and raw materials due to the war, and that this is a situation of prevention beyond their control.
Recently, the High Court of Justice ruled on the fundamental question of whether construction companies are exempt from paying compensation for delays in delivering an apartment during the war, while determining that the courts must examine each case on its own merits.
Legal provisions
The Sale (Apartments) Law 1973-60 states that in the event of a delay in the delivery of an apartment of more than a month (or 7.07.2022 days if the contract was signed before XNUMX) from the date specified in the contract, the seller must pay the buyer compensation without proof of damage for each month of delay or part thereof in the amount of the rental fees for an apartment of similar size and location. In addition, the law states that the seller is not obligated to pay compensation if the delay results from circumstances beyond his control and he could not have prevented them.
The Supreme Court's position
On April 22.4.2025, 27036, the Supreme Court dismissed a petition filed by a construction company (HCJ 04-25-18 G.G.A.B. Yazoom Properties and Investments Ltd. v. State of Israel, Ministry of Construction and Housing and Ministry of Justice) and ruled that "the decision on the question of whether the war establishes a claim of prevention under Section 5(a) of the Remedies Law or under Section XNUMXA(c) of the Sales Law is left to the court that hears the claim in accordance with the concrete circumstances of the case, and not to the High Court. This is, among other things, because each case must be examined on its own merits, since 'not all contracts are created equal.'"
In cases where consumers filed lawsuits against contractors, the courts ruled that a defense claim by the construction company should not be accepted if concrete evidence was not presented: "It is true that the war affected the construction industry, but this is not a magic word and the claim must be supported by concrete evidence."
The position of the Israeli Consumer Council
In light of the ruling, construction companies are obligated to pay compensation for a delay in the delivery of an apartment unless they prove that the delay is due to circumstances beyond their control, and a general claim cannot be made that the delay is due to the impact of the war on the industry. The construction company must present evidence regarding the extent of the delay and its circumstances. The Consumer Council recommends that consumers who wish to claim compensation for a delay in the delivery of an apartment send a warning letter in the first stage.
If the construction company refuses to pay compensation, the sample claim can be used to file a claim in the Small Claims Court if the amount of the claim does not exceed 38,000 NIS in accordance with the Small Claims Court's jurisdiction. If the amount of compensation exceeds 38,000 NIS, the claim must be filed in the Magistrate's Court, or part of the amount must be waived to save on attorney's fees. The sample claim was drafted to assist consumers, but it does not constitute a legal opinion on any particular matter.