A Honduran citizen filed a lawsuit to cancel the sale of a real estate property he owns, his only asset in Israel, on which an additional cautionary note was recorded in favor of a third party. The Court granted the motion of the defendants htat the plaintiff deposit a guarantee to secure their costs. Under Israeli law, a Court may order a plaintiff to provide a guarantee for the defendant's costs. Still, it will only do so in exceptional circumstances, such as when the plaintiff is a foreign resident with no assets in Israel from which costs could be easily collected if the claim is dismissed. The purpose of the guarantee is to prevent a situation in which a winning defendant cannot recover their costs. Here, the plaintiff is a foreign resident and the property in question is his only asset in the country. Moreover, the recording of an additional cautionary note on the property in favor of a third party creates a substantial encumbrance on the future ability to collect from the asset. Accordingly, the plaintiff was ordered to deposit ILS 150,000 to secure the defendants' costs.
Published in Afik News 450 15.10.2025
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