Real Estate & Property Law · Legal briefing
Buying Off-Plan: Contract & Security Review
By Adv. Yechiel Rachamim Menahemov & Adv. Assaf ShpigelPublished:
The practical dilemma
A new development promises an impressive specification, but its lengthy agreement contains one-sided terms and construction-index adjustments increase the price.
The legal position
Section 5C of the Sale (Apartments) Law 1973, introduced by Amendment 9, applies to agreements concluded from 7 July 2022. The first 20% is not indexed; up to half of each further payment may be linked to the construction-input index, subject to the statutory conditions. Earlier contracts require separate analysis. Under the purchaser-investment security legislation, collection above 7% requires a qualifying safeguard; a bank guarantee is one option. Legal expenses and delay compensation also depend on the applicable provisions. Official source 1 Official source 2
Your next step
Check the contract date, payment schedule, indexation, security and delivery date. Obtain the security documents before paying above the statutory threshold and review current limits and exceptions rather than relying on a sales assurance.