Legal Updates

A purchaser of land who fails to check possession may not raise claims against another who purchased the land before him

August 4, 2020

A purchaser of a plot of land sought to cancel a gift transaction made about eight years prior to his transaction and that, not only was not recorded with the land registry, but also not marked by a cautionary note at the registry.
The Court held that the second purchaser did not act in good faith and therefore the gift transaction trumps. Israeli law sets that in conflicting transaction the rights of first purchaser trump, but the right of the second purchaser prevails if acted in good faith, against consideration and was recorded with the Land Registry. As for the requirement of good faith of the second purchaser, acting with shut eyes despite suspicion that there is another transaction is sufficient to deemed lack of good faith. Here, there was a transaction in an agricultural land that was executed eight years after the gift transaction was made. Because it is a cultivated and planted land located in a small village with the second purchaser owning a large number of adjacent agricultural lands, it is unlikely that he did not know that this plot was in the possession of another. The second purchaser did not act as a reasonable purchaser and, thus, the gift transaction trumps.