Civil Case (Tel Aviv) 29022-12-24 Yariv Keinan and 37 others v. Yahalom B.C. Ltd.

Judgment

Before the court a claim for compensation of buyers of new apartments against the seller for delay in delivery.

Submission of pleadings and hearings

1. On December 11,2024, the plaintiffs filed a statement of claim in the sum of ILS 1,159,941. The defendant, after requesting and receiving extensions, filed a statement of defense on March 27,2025.  On July 24,2025, the court ruled that the preliminary proceedings had been exhausted and ordered the parties to submit their evidence.  The plaintiffs, after requesting and receiving extensions, submitted their evidence on August 28,2025, and the defendant, after requesting and receiving an extension, on October 20,2025.  The first hearing took place on November 11,2025, in which the court set dates for hearing the declarants' interrogations and also began a proceeding to appoint an appraisal expert on its behalf.  On January 13,2026, the court appointed the appraiser Galit Atsil as its expert.  The expert submitted her opinion on March 15,2026.  The second hearing took place on March 29,2026, in a visual conference due to the period of the special state of emergency , and the court set new dates for hearing evidence.  The third hearing took place on June 30,2026, in which the parties reached an agreement according to which the examinations of the witnesses would be superfluous without this constituting an admission or a right to the other party, and that summaries would be submitted.  The court gave effect to the decision with the consent of the parties, and accordingly issued an order for the submission of summaries.  The plaintiffs submitted their summaries on July 21,2026, and the defendant, after requesting and receiving an extension, on September 17,2026.

Discussion and Decision

2. The court must determine whether the defendant was late in delivering the apartments and if so, whether she is protected from being obligated to pay compensation for the delay.

Was the defendant late in delivering the apartments?

3. The plaintiffs claimed in the statement of claim that they entered into a contract with the defendant for the purchase of residential apartments at 11 and 13 Derech HaArgaman Street in the city of Yokneam in the "Yahalom Project" (which includes apartments at the buyer's price and apartments on the free market), between the years 2020-2022, and that the defendant is a company engaged in the field of construction and development in the field of real estate. They also claimed that the defendant was 4-9 months late in delivering the apartments, in violation of the law and the provisions of the agreement, and therefore sought to obligate it to pay compensation.  They further claimed that the defendant treated the many inquiries of most of them with indifference and contempt, and alternatively resorted to a tactic of dragging her feet and made mere allegations against them, when she decided not to comply with the provisions of the agreement and also not with the provisions of the Sale Law (Apartments), 5733-1973, (hereinafter: "the Sale of Apartments Law") and until the date of filing the claim, she had not paid them any compensation.  They further argued that in the framework of the agreements signed during 2020, which are the early agreements on time and within the framework of the "Buyer's Price", a delivery date was set for December 31,2022, and in the framework of the agreements signed, during the year 2021-2022, which are the later agreements on time and within the framework of the free market, a delivery date was set for May 24,2023.  However, they argued, contrary to the defendant's undertaking in the agreement, and contrary to the provisions of the law, it did not act as aforesaid to deliver the apartments on time, and in the end the apartments were delivered between 4-9 months later than set out in the provisions of the purchase contracts as well as in the provisions of the Apartment Sale Law.
4. According to the agreements attached to the plaintiffs' evidence, the defendant was required to deliver the apartments on various dates, the latest of which was on May 24,2023. According to the defendant's version, she delivered the apartments at later dates after the contractual delivery date had passed, but as will be detailed below, she raised various arguments as to why the contractual delivery date had not passed, and if it had passed, why she should be exempted from paying compensation for the delay.  Hence, there was a prima facie liability to pay compensation for delay in delivery under section 5 of the Sale of Apartments Law.  Amendment No. 9 to the Sale of Apartments Law, dated June 30,2022, stipulates that its provisions will not apply to apartments for which the sale contract was entered into prior to the entry into force of the amendment - see section 11(d) of the Law, which was added to it as part of the amendment.  The defendant claimed in the statement of defense that apart from two sample sale agreements, the plaintiffs did not attach to their statement of claim the sale agreements signed between the parties, which are "a material document and any other writing that serves as the basis for the statement of claims", in contravention of Regulation 15(a) of the Civil Procedure Regulations, 5779-2018, and sought to order the dismissal of the claim.  The plaintiffs attached the sale agreements to their affidavits and claimed in their summaries that all the agreements were signed before June 30,2022, and therefore the court ruled that the dispute in this proceeding applies to the Sale of Apartments Law in its format before Amendment 9 came into effect.
5. The Ottoman Settlement [Old Version] 1916Therefore, the sections relevant to our matter in the Sale of Apartments Law are the following sections:

12-34-56-78 Chekhov v.  State of Israel, P.D.  51 (2)"5A           (a)        If the seller has not made the apartment available to the buyer after sixty days have elapsed from the end of the date set for this in the sale contract (in this section - the contractual date), the buyer is entitled to compensation, without proof of damage, in the amount as detailed below, for each month or part thereof from the contractual date until the apartment is made available to him, or to compensation in the amount agreed upon in the sale contract due to a delay in the delivery of the apartment, whichever is higher: