For many new immigrants, purchasing an apartment in Israel is the fulfillment of a dream. However, the process of purchasing the apartment in Israel is accompanied by bureaucratic and legal complexity, which may be fundamentally different from that familiar to them in the country of origin. There are four main issues that are worthwhile to take into account prior to entering into a transaction.
The first issue is the question of registration and ownership. In contrast to different registration methods overseas, in Israel the system may be complex: certain apartments are not registered in the "Tabu" (Land Registration Bureau), but rather are managed in parallel registrations under a "housing company" or at the Israel Land Authority. In certain situations, it is possible that the seller is not registered as the owner of the property in the official registrations, sometimes due to a historical chain of transfers that was not completed properly. There also exist properties that suffer from incomplete parcellation (land division) or from complex registration of the condominium, a situation that may affect the timetables of the transaction and the process of taking the mortgage.
The second issue relates to previous debts and attachments. It is important to check prior to the transaction whether there exist past debts of the seller to the municipality, such as betterment levies or ongoing property tax (Arnona) debts. Likewise, it is recommended to verify, that there are no attachments, court orders or liens imposed on the property registered in favor of third parties, which may raise legal and financial complexities in the completion of the purchase.
The third issue is the compatibility with the building permit and the law. Sometimes apartments are offered for sale in which there exist building deviations that were carried out without a lawful permit, such as closing a balcony, splitting an apartment or historical building offenses. These situations may expose the owner to proceedings opposite the local authority. Beyond that, a situation of non-compatibility with the permit might make it difficult to receive appraisal and mortgage approval from the bank.
The fourth issue relates to the document called a "Memorandum of Understanding" (Zichron Devarim). While in many business cultures signing an initial memorandum of understanding may be perceived as a declaration of intentions only, in Israeli law, a memorandum of understanding may, in accordance with its content and the circumstances of its signing, raise questions regarding its validity and extent of its legal binding. Therefore it is recommended to avoid signing before receiving appropriate advice.
In light of the legal complexity and the language and culture gaps among new immigrants, which are expressed not infrequently also in the pace of managing the transaction and in the different perception of time between Israel and the countries of origin, it is recommended to carry out comprehensive preliminary checks prior to the contractual engagement. Assistance by a lawyer expert in real estate law is essential to locating these focal points of complexity in advance, and to ensuring the completion of the purchasing process in a safe and informed manner.