Purchasers of agricultural land plots claimed that the realtor who also served as the transaction's marketing agent, along with others, concealed from them the existence of a clause in the lease agreement with the Israel Land Authority. This clause allowed the state to reclaim the land in the event of a change in its designation. Ultimately, the designation was indeed changed and the land was reclaimed by the state in exchange for a low compensation.
The Court dismissed the lawsuit against the realtor because he did not breach his fiduciary duty. Under the Israeli Realtors Law, a realtor is obligated to act with loyalty, fairness, and in a customary manner toward its clients and must provide the client with all information in its possession regarding any material matter concerning the property subject to the brokerage transaction. A breach of the disclosure duty regarding information that the realtor should have disclosed (under law, custom, or circumstances) may be deemed misleading by omission. In this case, the realtor did not have an informational advantage over the purchasers regarding obtaining up-to-date planning data, as his reliance on letters regarding the matter was reasonable. The realtor was unaware of the clause in the lease agreement with the Israel Land Authority, did not intentionally conceal it and the purchasers were informed about the clause by their lawyer. A realtor's responsibility does not include in-depth legal and planning examinations or the clarification of contractual terms, as these are the exclusive responsibility of the lawyers.