Legal Updates

A purchaser who did not complete a purchase transaction but has possession of the apartment may be liable to pay appropriate usage fees

March 22, 2021

An apartment purchaser did not pay the full consideration and took advantage of the fact that the seller moved to Australia to forge a bill of sale and record a transfer of ownership at the land registry. Only 20 years later, after a legal proceeding determined that the bill of sale was forged but the seller never terminated the transaction, the purchaser paid the balance of the consideration with linkage and interest and the apartment passed to her name.
The Court held that although the purchaser paid the full consideration for the apartment, for 20 years the purchaser used the apartment even though it was not hers and she has to pay a usage fee for the period. The Israeli Unjust Enrichment Law provides that when a party has received a benefit; The benefit was obtained at the expense of the other party; and the enrichment was made not in accordance with a right in law, the injured party is entitled to compensation. Here, possession of the purchaser in the apartment for 20 years without paying the full consideration, constitutes undue enrichment at the expense of the seller. Thus, even if in the end the consideration was paid together with linkage and interest, the seller is entitled to rent for the full period in which the apartment was held by the purchaser illegally.