Legal updates

A four-month delay in delivery of an apartment due to the Covid-19 epidemic may be reasonable and not entitling to compensation

October 18, 2021
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A purchaser of an apartment sought compensation from the contractor after receiving the apartment in about four months delay, due to the Covid-19 epidemic.

The Court dismissed the claim and held that the delay was due to circumstances beyond the contractor's control and do not justify compensation. Israeli law stipulates that more than sixty days delay in tendering an apartment from the date stipulated in the contract grants the purchaser a right to compensation, without requirement to prove damage, in an amount of no less than 1.5 times the rent of an equivalent apartment up to eight months and as of the ninth month, 1.25 times the rent of an equivalent apartment. However, the law allows the parties to determine that the seller will be exempt from compensation if the delay is as a result of circumstances beyond the seller's control and if the risk for its occurrence and consequences is not imposed on it. In this case, the parties agreed that in the event of a delay, the expected delivery date would be postponed for a reasonable period of time from the interruption or delay. The Covid-19 epidemic led to delays in the completion of the project due to a significant decrease in the number of workers, which directly affected the pace of construction despite the contractor’s efforts to reduce the delay. Because these are circumstances were beyond the control of the contractor and could not have been foreseen and because the period of delay is reasonable, there is no room for compensation for the period of delay.