Buying an Apartment: What to Check Before You Sign

Important Tips for Apartment Buyers

1. When buying an apartment, you must examine the sellers' rights in the apartment (private land, Israel Land Authority, or a housing company).

2. Depending on the sellers' rights in the apartment, ask the sellers to provide a Land Registry extract for the apartment and/or a confirmation of rights from the Israel Land Authority and/or a confirmation of rights from the housing company, and examine their rights in the apartment.

3. Check for liens, attachments, various notes and expropriations on the sellers' rights in the apartment.

4. Check the planning status, including demolition orders, building violations and the like. (For this purpose, I appoint a certified real estate appraiser.)

5. Check the physical condition of the apartment, including whether its systems and fixtures are in working order. For this purpose, I appoint an engineering firm to provide an expert opinion.

6. Progress and make payments toward the apartment price in stages, subject to the removal of liens and/or attachments if any are registered on the sellers' rights in the apartment.

7. Immediately after signing the sale agreement, make sure a caution note is registered at the Land Registry and/or a pledge is registered with the Registrar of Pledges and/or notice of the transaction is given to the Israel Land Authority, in order to protect the buyers' rights against a conflicting transaction or a fraudulent sale of the apartment to another person.

8. Report the transaction to the real estate tax authorities on time and pay purchase tax according to the applicable tax brackets.

9. The balance of the price (the final payment) should be paid against receiving possession of the apartment and against receiving all the approvals/documents that the sellers must provide to the buyers in order to register the apartment in the buyers' names at the Land Registry Office / Israel Land Authority / housing company, as applicable.

10. The sale agreement should set out a trust mechanism under which, if on the delivery date any approvals that the sellers are required to provide and that are essential for registering the buyers' rights in the apartment are missing, the balance of the price, in full and/or in part as applicable, will be deposited in trust with the parties' attorneys and/or the seller's attorney, and this amount will be released only after all the approvals have been provided.

11. Have the sellers sign a receipt confirming the amounts received from the buyers toward the apartment price.

12. Include provisions in the agreement regarding a mortgage loan taken by the buyers, including allowing the bank's appraiser to visit the apartment in order to prepare a valuation.

13. Set the payment terms, including dates, price indexation and the like.

14. To prevent arguments and disputes, it is recommended to specify what the apartment price includes (for example: closets, light fixtures, air conditioners and the like).

15. It is recommended to state in the contract that the sellers must deliver the apartment to the buyers in its condition on the date the agreement is signed, except for reasonable wear and tear.

16. It is essential to include a provision in the contract under which the sellers undertake to cooperate and do whatever is required to have the rights in the apartment registered in the buyers' names, including undertaking to appear, at the request of the parties' attorneys, at the Land Registry offices, the capital gains tax office, the Israel Land Authority, or any other body or authority.