Civil Case (Tel Aviv) 29022-12-24 Yariv Keinan and 37 others v. Yahalom B.C. Ltd. - part 3

To the extent that the issuance of the building permit is delayed beyond April 15,2020, any delay beyond this period will increase and extend the delivery date in a relative manner."

23. The defendant devoted a significant part of her summaries to this issue. She argued that, contrary to the Shemesh rule, this is not a contractual provision that grants the contractor unlimited power to postpone the delivery date without setting a new date, in a manner intended to exempt the contractor from the duty of compensation imposed on him by virtue of the law. The defendant argued that this is a clear and certain contractual provision, where the purchaser can conclude when the apartment will be delivered to him and can plan his steps properly (paragraph 24 of its summaries).  The defendant referred to a judgment that allegedly guides a civil appeal in our case (Tel Aviv District) 61429-09-24 Yehuda Rotstein v.  Aura Israel - Entrepreneurship and Investments Ltd.  (Nevo, October 29,2024) (hereinafter: "the Rotstein case").  We will present the main points of his remarks relating to our case.
24. In the Rotstein case, the parties entered into a sale agreement for a residential apartment in July 2016. In this agreement, the "expected delivery date" of the apartment was defined as two years from the receipt of a final building permit for the building, which the seller expected to be received by December 31,2016. In other words, at the time of signing the contract, the seller estimated that six months would pass from the date the contract was signed until the date of receipt of the approval.  Finally, the permit was received only on November 27,2020, about four years after the estimated date, and the apartment was delivered to the appellant on December 13,2022, within a period of two years plus the "grace" period, since the building permit was granted.
25. The court (the Honorable Justice Ariel Zimmerman) ruled in the Rotstein case as follows:

"It is clear that extra care is required in everything related to the protection of the rights of apartment buyers (Civil Appeal 7991/07 Rafaeli v.  Razin (April 12,2011); Shemesh Rule, at paragraph 21).  It is also understood that "the date of delivery of the apartment, after it is kosher and ready for habitation, is one of the most critical data from the perspective of the apartment buyer" (Shemesh Rule, at paragraph 23).  A delay in delivery relative to the date set in the sale contract, beyond a delay of 60 days, will therefore be entitled to compensation, as the cogent provision of section 5A of the Apartment Sale Law.  In order not to allow the contractor to circumvent this provision of the law, in the Shemesh Rule it was clarified that a late agreement, after the conclusion of the sales contract, which diverts the date of delivery, may therefore be found - on the basis of an individual examination of the circumstances of the case - not as a valid agreement as to the date of delivery, but rather as an exemption clause 'presented' or 'disguised as a stipulation that deals with an agreement on a new delivery date, but in practice is intended to exempt the contractor from the duty of compensation imposed on him by virtue of the law' (ibid., at paragraph 27).

26. Subsequently, the court ruled in the Rotstein case as follows:

"The sale contract does not specify a predetermined date for delivery, since the construction is naturally contingent on a building permit, and such was not available at the time of the conclusion of the agreement.  But the agreement is clear in its entirety: delivery within two years from the date of receipt of the final building permit...  There is an estimate, but explicitly there is no undertaking on the part of the respondent - and there can be no obligation - as to the date on which the building permit will be granted, until December 31,2016.  However, if it is not granted by that date, this does not constitute a breach of the agreement, nor does it change the clear stipulation that the (binding) delivery date is two years from the date of receipt of the actual building permit...  Given that these are the provisions of the contract, there is no invalidity in principle, nor is there a deviation from cogent legal provisions.  As the trial court held, there is no impediment in principle to the connection between the date of delivery and the building permit, when at the time of the sale contract there is no permit available.  "

27. The court in the Rotstein case emphasized that "to the extent that you find in a future contract some kind of cleverness on the part of a contractor that makes the contractual delivery date unknown, unclear, and the material in the hands of the creator may find the court to intervene, in order to ensure the compliance with the cogent provisions of the Apartment Sale Law and to protect buyers."
28. Hence, the court in the Rotstein case distinguishes between the Shemesh rule, in which the postponement clause was under the control of the contractor and created ambiguity on the part of the buyer, and the content of the clause that is the subject of the dispute in the Rotstein case, which appears in the sale agreement already on the date of its conclusion and postpones the date of delivery in relation to the expected date of receipt of the permit. The court ruled in the Rotstein case that this is not a delay clause that "disguises" itself as an exemption clause from compensation. For our purposes, section D, which was quoted earlier, is almost identical in content and substance to the clause that is the subject of the dispute in the Rotstein case, and therefore this court adopts the conclusion of the court in the Rotstein case and rules that section D is valid.
29. The court is aware that all the dates for the signing of the agreements of the purchasers of apartments in the "Buyer's Price" contract with the defendant were made after the estimated date of receipt of the permit, which is April 15,2020. Although the plaintiffs did not raise this aspect at any stage of the proceeding, the court chose to hold a hearing on the matter and examine whether this could change the outcome. The question arises whether there is a fundamental impropriety in the fact that the agreement was entered into several months after the date of the expected date of receipt of the permit, and that date was not changed to a future date, and the date of delivery of the apartment was not changed accordingly.
30. In this matter as well, the defendant argued that in real time, the plaintiffs claimed that the contractual delivery date of their apartment plus the grace days fell on a later date, but that at the time of filing the claim they changed their version from one end to the other.
31. For example, the question arises as to whether the correspondence with the Amsalem couple (Appendix 5 to Omer Mor's affidavit) contains an admission and knowledge that at the time of signing the contract, the couple knew and recognized clause D of the sale agreement, which stipulated the date of delivery of the apartment on the date of receipt of the permit.
32. Amsalem's affidavit does not refer to clause D of the agreement, and he does not mention the correspondence byonline mail between him and the defendant's legal counsel, but rather refers to the date of delivery of December 31,2022 as a date that is taken for granted.
33. An examination of the affidavits of the other plaintiffs who purchased their apartments in the Buyer's Price transaction shows that they too did not mention clause D and did not claim that the defendant misled them, and if so, how did he mislead them, or whether the content of clause D created ignorance or lack of clarity. This is despite the fact that the defendant's claim regarding clause D was already raised in the statement of defense.
34. From these circumstances, it appears that no reasons or reasons arise from the plaintiffs' statements with regard to misleading, unclarity, or lack of knowledge whatsoever with regard to section D. Ostensibly, the fact that the agreements in this proceeding were signed after the estimated date for receiving a building permit had passed, reduced the uncertainty regarding the person who would have purchased his apartment before the estimated date for granting a building permit had passed. This was because the purchasers knew from a perusal of the agreement that the estimated date for receiving the permit had passed.  It should be noted that the defendant explained the failure to change the agreement accordingly, by dictating the wording of the agreement by the Ministry of Housing.  Therefore, the court rejects the claim of the plaintiffs who purchased their apartment in the Mehir LaMishtaken transaction, according to which clause D should be nullified, and rules that the period of time for delay in delivery should be commenced, according to the deferral mechanism in clause D proportional to the date of receipt of the actual building permit.  Therefore, the conditional contractual delivery date of December 31,2022, should be considered in accordance with the postponement that took place on the date of receipt of the building permit from April 15,2020.  The date on which the permit was received is September 24,2020, antitrust is 162 days.  Therefore, an addition of 162 days from the conditional delivery date of December 31,2022 leads to June 11,2023 as the updated contractual delivery date.

The claim that the plaintiffs agreed to an extension of time in the framework of requests for changes

35. 00The defendant claimed in the statement of defense that the plaintiffs ignored the fact that some of them voluntarily and in their opinion agreed to postpone the contractual delivery date for an additional period due to the changes requested by them in their apartments.

0

36. It has already been determined in case law that the inclusion of a stipulation according to which the delivery date is postponed due to changes requested by the buyer does not help the seller, if the agreed postponement period is swallowed up within the period preceding the date of the start of the delay (Civil Appeal Authority 70163-11-24 Gan HaShikmim Ltd. Pasha et al.) (published in Nevo).  In this issue, contractual agreement alone is not enough, but the expectation must be applied in case law that the date of delay will not be postponed without a causal connection between the contractual agreement and the postponement (see the review of case law regarding the proper and restrictive interpretation of agreements to postpone the date of delivery of the apartment in the Rotshtein case).  For example, if the buyer wishes to change the flooring of the apartment about a month before the contractual delivery date, there will be room to postpone the delivery, due to an agreed postponement period of two months for the purpose of carrying out the works, by one month.  If there is no requirement to prove a causal connection between the changes and the postponement of the date of delivery of the apartment, the sellers will bypass their obligation to deliver the apartment according to the contractual date in various and strange agreements.  As will be detailed below when calculating the amount of compensation, the claim in this matter relates only to a number of apartments, most of which the period of execution of the changes ended long before the contractual delivery date, and in one of them, the agreed postponement period ended several days before the contractual delivery date.  Therefore, the court rejects the defendant's claim of postponement of the contractual delivery date due to contractual agreement to make changes.

Was the delay caused by factors over which the defendant has no control and was unable to anticipate and prepare accordingly?

37. In addition to the dispute regarding the contractual delivery date, the defendant further argued that even if the delivery date was past the contractual delivery date, it still has a defense because the delay stems from factors beyond its control.

38. It has already been held that when the parties to the contract are not of equal status. For example, a contractor and an apartment purchaser, the burden of proof is on the contractor. He is the one who must lay a sufficient evidentiary basis to support the claim that the delay was caused by factors over which he has no control (Civil Appeal 148/77 Roth et al.    Yasufa (Construction) Ltd.  IsrSC 33 (1) 617).  See also the references in the Rotstein case to the Supreme Court's rulings that with regard to the rights of apartment buyers, extreme caution must be exercised, since the purchase of a residential apartment in Israel is one of the most significant transactions in the life of an average family, and therefore this issue requires special judicial supervision.
39. The defendant argued in the statement of defense that the plaintiffs ignore the fact that during the life of the venture unexpected and/or uncontrolled events occurred and are not dependent on it, in a manner that also affected the timetables for the completion of the venture and which necessitated an update and postponement of the delivery date, so that in light of the aforementioned events and taking into account the provisions of the sale agreement between the parties, the ground falls under the plaintiffs' claim. The court will review the various claims that unexpected events occurred.

The Claim for an Exemption from Payment of Compensation for Delay in Delivery of the Apartments Due to the Corona Pandemic

40. The defendant claimed in the statement of defense that one material and unexpected event was the unprecedented COVID-19 crisis that broke out and the waves of COVID-19 that followed, which brought with them difficulties and delays that were beyond its control and could not have been foreseen, and that led to a delay of at least 3 months, in the timelines for the completion of the project. Thus, for example, she argued, in light of the COVID-19 crisis, many employees and managers were absent from work during the project, due to quarantine as part of the widespread waves of morbidity that hit the country, a shortage of workers (for her, suppliers and contract workers), a shortage of products and materials, equipment and transportation services, and more. In addition, it encountered very significant difficulties in dealing with the ministries of the authorities (municipality, water corporation, electric company, etc.) that for a long time were closed and/or did not provide service, returned to work in a limited format and were closed again due to the closures, etc.
41. The plaintiffs preceded and argued in the statement of claim regarding the defendant's claim for an exemption from payment of compensation for delay in delivery due to the "Corona crisis" - which the defendant was well aware that despite the "Corona crisis", the construction industry was defined as an essential economy and it continued to operate without a lockdown or delays in activity, and it therefore appears that it is trying to evade its obligation under the law and in accordance with the provisions of the agreement towards them, by using the excuse of the coronavirus.
42. As to the defendant's claim regarding delays in receiving the occupancy permit (Form 4) - the plaintiffs claim that the defendant, as an entrepreneurial company that builds and sells large projects, should have anticipated delays of this kind, which were also recognized in case law as such that the contractor should have foreseen in advance, and that the defendant should have included this in the planning of the project's schedules. Since it did not do so, they argued, the defendant was negligent in planning the schedules and was solely responsible for this delay, and in any event, they claimed, in real time, that the defendant did not claim the Corona crisis at all, and did so only when it realized that it would not meet the timetables to which it itself had committed itself.
43. The argument that the coronavirus pandemic is an unexpected event has been raised and discussed quite a bit. The District Court ruled other municipal applications 56554-08-23 Ben David et al.   Y.  Zilbermintz & Son Ltd.  (published in Nevo) that "as has already been determined in case law, the words 'corona crisis' or 'corona pandemic' are not magic words, which can sweepingly justify any delay in construction and any delay in the delivery of apartments." The District Court reviewed the case law in the Ben David case, according to which it is not enough to claim a "corona crisis", but rather to show a causal connection between the corona and the delay regarding the entire period, and that it is easy to prove on which days the site did not work by means of work diaries.
44. In the Ben David case, the District Court rejected the reliance on the coronavirus pandemic as a factor that exempts him from liability to pay compensation due to the contractor's failure to keep work logs, on the grounds that "there is evidence that is very easy to prove how many days of work went down the drain due to the coronavirus, and this was not brought."
45. The District Court further ruled that the contractor should have kept the work logs. The District Court also ruled that "if the evidence had been brought, then it would have been possible to know exactly what the 'part' of the coronavirus in the delay in the delivery of the apartments was. This is not a component that should be ruled on by way of an estimate, because there is an uncomplicated way to determine it arithmetically, at least approximately.  (See in this regard: Civil Appeal 1203/13 Shmuel Tommashover v.  Art Ofik Ltd.  [Nevo] (May 3,2015), Civil Appeal 355/80 Natan Anisamov Ltd.    Tirat Bat Sheva Hotel Ltd.  (35 (2) 800)."
46. The defendant referred to a number of pieces of evidence to justify the delays in delivery, first and foremost documents relating to the impact of the COVID-19 pandemic. Among these evidences are an affidavit by Ms. Yael Maor, along with quarantine and sickness certificates of about 20 employees essential to the venture, as well as real-time correspondence from theventure's WhatsApp group attesting to a low number of workers due to illness and closures. However, these documents do not replace work diaries that are supposed to establish the alleged causal connection between the evidence submitted and the delay in the pace of work.
47. In addition, the defendant referred to the position of the Commissioner of the Sale Law at the Ministry of Construction and Housing dated May 24,2021, which dealt with the delay in the delivery of the apartments due to the Corona pandemic. The District Court ruled in the Ben David case in relation to this document as follows:

"In any case, this is a recommendation to the parties, which is not obligated to accept, to share in a certain way the 'damages' caused by the coronavirus between the contractor and the apartment buyer." In addition, the District Court noted that the delay in the case before it is significant and "the fact is that the defendant, and rightly so, saw fit to compensate the plaintiffs - the appellants, but according to her calculation and did not think that she was completely exempt from compensation due to the 'Corona pandemic'.  She did not think (and rightly so) that she had overpaid and that she was entitled to some kind of restitution, and that is a good thing.  In any event, when the parties do not reach an agreement according to the outline proposed by the Director-General, the provisions of the Apartment Sale Law apply.  Cogent provisions as aforesaid, and they must be acted upon."

48. The case law does not consider a regular shortage of construction workers or construction materials as sufficient grounds for exemption, since these are factors directly related to the management of the construction project, which are within the scope of the contractor's professional risks, and can usually be anticipated and expressed in the contractual schedule. Even when it is an external event, the contractor must prove its scope, the period in which it was affected, and the causal connection between it and the actual delay. According to the literature, the obligation to deliver is a consequence obligation, and the seller bears in principle the risks of wars, closures, epidemics, manpower shortages, and external delays, subject to the limited exception of thwarting the contract (Eyal Zamir Sale Law, 5728-1968 (2023).  Similarly, it was ruled that it is not sufficient to raise a claim regarding a crisis or shortage; rather, positive evidence must be presented that the work was stopped or slowed down involuntarily, that this actually caused the delay, and what was the exact duration of the delay.  See Small Claim (Tel Aviv) 38116-09-25 Eyal Ron v.  Eyal Peretz Development and Real Estate 2011 Ltd.  (April 19,2026), Civil Case (Shalom Tel Aviv) 6523-06-22 Yoav Heiman v.    Meir Construction Development - Boaz 5 Ramat Gan Ltd.  (April 7,2025).  Hence, a general or expected shortage of workers and materials, without detailed evidence regarding an unusual event and its direct impact, will usually be considered a risk to the contractor and not to the purchaser of the apartment.
49. Regarding delays by authorities, the IEC and infrastructure corporations, even regardless of the COVID-19 pandemic, case law generally states that delays in obtaining permits, Form 4, firefighting permits, connection to electricity, water or sewage, and development work by a local authority are risks that the contractor must take into account. The contractor is the professional entity, he manages the venture, he is in interface with the authorities, and has the ability to assess the required time periods and routine delays. Therefore, the fact that it was the authority or the IEC that actually caused the delay is not sufficient to transfer the risk to the buyer, see Small Claims Appeals Authority (District Court) 10118-05-22 Hasson M.S.  Sdera (1993) Ltd.    Matan Moshe (June 23,2022), Civil Claim in Rapid Hearing (Shalom Jerusalem) 55112-08-22 Nehemia Hirschfeld v.  Manos - Bolivia 4 Ltd.  (September 14,2025), Civil Case (Shalom Neth) 18767-06-19 Yehuda Andre Belhassen v.  Shilat Tama 38 Ltd.  (August 31,2023) Veteran Civil Case (Shalom Jerusalem) 3193-03-23 Noga Moskowitz v.  Raz and Shahaf Development (1994) Ltd.  (April 1,2025).
50. The case law further states that the contractor is entitled, to the extent that he believes that a certain authority has caused him damage, to take appropriate action against it, but this does not exempt him against the purchaser of the apartment (Small Claim (Jerusalem) 18676-07-25 Fromt Leah Eichler v. Eli Yohanan Engineers Ltd. (March 11,2026).
51. Regarding the acts or omissions of suppliers, subcontractors and service providers, the case law states that even an engagement with a supplier, executing contractor, architect, consultant, or other service provider does not usually transfer the risk of delay to the buyer, and that these are the parties with whom the contractor has chosen to contract, and the relationship with them is part of the management of the venture and the performance of its obligations to the buyer. Therefore, the failure of a supplier or service provider may establish a cause of action for the contractor or indemnification against him, but does not in itself create an exemption from the obligation to compensate under section 5a. See: Civil Case (Shalom Bat Yam) 6135-06-19 Yossi Assaf Malka v.    Holdings Ltd.  (March 16,2022), Civil Case (Tel Aviv Shalom) 51991-01-22 Laura Dalia Naim Asson v.  Boulevard Project Development Ltd.  (May 19,2025) Civil Case (Hai District) 58227-12-22 Ofir Suleiman et al.  v.  Vradim Investments and Properties Ltd.  (July 22,2025).
52. Hence, the contractor is not entitled to suffice with presenting a contract with a supplier or correspondence indicating a fault with the service provider. He must prove that the failure did indeed occur, that it did not stem from his conduct, that he was the direct and sole cause of the delay, and that the duration of the alleged delay was proven accurately. In this proceeding, no evidence was presented that meets the required threshold in this matter.  The case law further determined that a contractual stipulation that allows a contractor to postpone the delivery date due to a wide list of factors, such as a shortage of materials or workers, delays by the authorities, the electric company, or "any entity over which the contractor has no control", does not override the provisions of section 5A.  When the stipulation in fact negates the statutory compensation or grants the contractor unlimited discretion, the case law tends to view it as an exemption clause that is invalid, or at least to interpret it narrowly and in accordance with the conditions of the law, see the Shemesh case mentioned above.
53. Therefore, the court ruled that the defendant did not prove a causal connection between the coronavirus pandemic and the delay in the delivery of the apartments.

The Claim of Exemption from Payment of Compensation for Delay in Delivery of the Apartments Due to Military Operations

54. The defendant claimed in the statement of defense that during the course of the project, military operations were carried out, during which closures were imposed in Judea and Samaria, due to which the project's manpower was reduced, as well as some of the defendant's employees were recruited for reserve duty, all of which led to an additional delay of at least 30 days in the timetables for the completion of the project.
55. Regarding military operations that took place during the project, the defendant presented correspondence from the project's WhatsApp group , which it claims attest to a small number of workers and workers who were detained at checkpoints. Among other things, the defendant attached certain references about a group of plumbers who were stuck at the checkpoint on July 24,2022, and a closure on April 10,2023 due to the Passover holiday and the security situation, which she claims led to a low number of only 31 workers at the site. However, in this matter as well, no work diaries were presented that would substantiate the claim of a causal link between a delay in the pace of work in relation to the original plan, including taking into account in advance the occurrence of unforeseen events in the planning of the pace of construction.
56. Regarding the "Iron Sword" war, this one, as everyone knows, began on October 7,2023. Of the 20 apartments in dispute, only the apartment of Mr. Segal, the 14th plaintiff, was delivered after the October 7,2023, which, according to the lawsuit, was actually delivered on December 31,2023, so in fact only it relates to this delay.
57. The defendant's evidence (Yossi Shani's affidavit, Appendix 6) shows that there was extensive mobilization for reserve duty among the defendant's employees, and yet, even with regard to the claim regarding Operation Iron Swords, the defendant did not meet the burden of proving a causal connection between that enlistment and the delay in handing over the apartment to Mr. Segal. Therefore, the court also rejects the claim of postponing the delivery date due to military operations.

Should the defendant compensate the plaintiffs for emotional distress?

58. The plaintiffs claimed in the statement of claim that the defendant must pay them compensation in the total amount of ILS 172,364, which expresses compensation for mental anguish, discomfort, hassle, the need to contact experts, loss of work days, prevention of enjoyment of the property and expenses incurred, which will be divided between their apartments.
59. The court ruled that it was not for nothing that the legislature established a permanent compensation consisting of proper rent and an advance, since the coefficient expresses all the damages caused by the delay beyond the need to rent another apartment, including mental anguish. The purpose of the legislature was to determine comprehensive compensation that would make it unnecessary to conduct a long and complex proceeding in which the purchaser would have to prove components of pecuniary and non-pecuniary damage. Therefore, the court rejects the plaintiffs' request in this matter.  The claim of expenses incurred by the plaintiffs has a place in the costs hearing at the end of the judgment.

Additional Issues

60. In this proceeding, the defendant raised arguments to justify the delay, and the court reviewed the centrality of them. Among other things, it was argued that the date of delivery of the notice of the date of delivery should be regarded as the date on which the number of days for delivery of the apartment had ended. The court ruled that this argument does not hold water, especially in light of the case law relating to attempts by sellers to circumvent their obligation to deliver the apartment on the contractual date of delivery.  In the matter of this argument, there is room to examine another argument, namely that the seller summoned the buyer to receive the apartment, and the purchaser refused to accept the apartment.  As will be detailed below, this argument relates to only one buyer.
61. With regard to the two-month grace period, clause 12.8 of the agreement states as follows:

"12.8 If the seller did not deliver the apartment to the purchaser of the apartment after 60 days have elapsed from the date of delivery, the purchaser is entitled to compensation, without proof of damage, in the amount specified below, for each month or part thereof from the date of delivery until the actual delivery, as follows: An amount equal to the rent of an apartment of similar size and location, multiplied by 1.5 for the period beginning on the date of delivery and ending at the end of eight months from that date." Hence, in the event that the delay exceeds two months, the delay must be counted for the payment of compensation, from the date of the beginning of the delay, without postponement of the date due to the grace period.  In this regard, see also the judgment of other municipal applications 444337-02 Yirmiyahu v.  Krupp (published in Nevo), where it was held that in the absence of the buyer's explicit consent, the delay should not be counted from the end of the grace period, insofar as the delay continues even after the grace period has passed.