Buying an apartment “off-plan,” or directly from a developer (mehakablan) before it’s built, is a very common way to purchase a new home in Israel. While it can be a great way to get a brand-new property, often at a favorable price, the process for buying an apartment that is under construction is different from buying a pre-owned home. Understanding the steps involved is crucial for a secure and successful purchase.
So, what is the process for buying an apartment “off-plan” in Israel? Here’s a detailed breakdown of the key stages.
1. Hire an Independent Real Estate Lawyer
This is the most critical step. The developer will have their own lawyer, but that lawyer represents the developer’s interests, not yours. You must hire your own experienced real estate attorney who specializes in off-plan purchases. Your lawyer will review the contract, check the developer’s permits and land rights, and ensure your investment is protected throughout the process.
2. Due Diligence and Contract Negotiation
Before signing anything, your lawyer will perform thorough due diligence. This includes:
- Verifying Land Rights: Ensuring the developer legally owns the land and has the right to build on it.
- Checking Building Permits: Confirming that all necessary municipal and national permits are in place.
- Reviewing the Sales Contract: The developer’s contract is often long and complex. Your lawyer will negotiate terms on your behalf, focusing on payment schedules, deadlines, penalties for delays, and specifications for the finished apartment.
3. Understanding the Technical Specifications (Mifrat Techni)
The contract will include a detailed document called the Mifrat Techni, which lists everything that comes with the apartment—from the type of floor tiles and kitchen cabinets to the number of electrical outlets. Review this document carefully with your lawyer and an architect or engineer if necessary. Any changes or upgrades you want must be agreed upon in writing.
4. Securing a Bank Guarantee (Arvut Bankait)
Under Israeli law (the Sale Law), your payments to the developer must be protected. The most common form of protection is a bank guarantee (Arvut Bankait). For each payment you make, the developer’s bank issues a guarantee for that amount. If the developer goes bankrupt or fails to deliver the apartment, you can present these guarantees to the bank and get your money back. Never make a payment without receiving a corresponding bank guarantee.
5. The Payment Schedule
You won’t pay for the entire apartment upfront. Instead, you’ll make a series of payments tied to specific construction milestones (e.g., completion of the foundation, framing, interior work). This schedule will be clearly outlined in your contract.
6. Construction and Handover
During the construction period, which can take several years, you will have opportunities to visit the site at designated times. Before the final handover, you will conduct a walk-through inspection with a representative of the developer to identify any defects or issues that need to be fixed. This is known as the protokol.
Once the building is deemed safe for occupancy and receives a Tofes 4 (Certificate of Occupancy) from the municipality, you will make your final payment and receive the keys to your new home.
7. Registering the Property
After the project is complete, the final step is registering the apartment in your name in the Israeli Land Registry Office (Tabu). This process can sometimes take several years after you move in, but your lawyer will manage it for you.
By following these steps and working with a qualified lawyer, you can confidently navigate the process of buying an apartment “off-plan” in Israel and ensure your rights are protected from start to finish.
