Two families purchased apartments from a developer. After the developer ran into financial difficulties and a receiver was appointed to complete the project, they sought to cancel the purchase agreement and forfeit the Sale Law guarantees in their possession due to a significant delay in delivery and given the fact that they can no longer afford the mortgage and rent payments simultaneously.
The Court accepted the motion and found that the purchasers have the right to cancel the agreement and demand the forfeiture of the guarantees. Israeli law allows an apartment purchaser to realize the guarantee, inter alia, in cases where there is an absolute prevention of delivering the apartment or when a receivership order is issued. TThis section should be interpreted broadly and applied to additional cases where a substantial delay in the schedule prevents reasonable use of the apartment and amounts to a fundamental breach that infringes upon the purchaser's personal right. This is to prevent the personal financial collapse of private purchasers interested in exiting the project. Here, the collapse of the developer, the appointment of a receiver, and the extreme delay in delivery left the families at a dead end, justifying the cancellation of the agreement and the forfeiture of the guarantees. Therefore, the families are entitled to receive their money back