Apartments (Shutterstock photo, vecteezy. Flash 90/ Nati Shohat)
A rare decision of the High Court: 17 families from the religious and ultra-Orthodox sectors, who believed that they were purchasing luxury apartments in the Ahismach settlement, recently filed, through attorney Erez Asraf, a lawsuit against Aphel Real Estate, the entrepreneurial company that is building the apartment buildings. 8 million shekels, submitted to the District Court in Tel Aviv, alleging serious violations of the sales agreements, and a continuous delay in the delivery of the apartments.
According to the lawsuit, although the sales agreements set delivery dates for the various apartments for 2020, and at the latest for the beginning of 2021, the company did not fulfill its obligation, and to this day has not delivered the apartments to the buyers.
More in-
Moreover, it is claimed that, although it is a delivery delay of between a year and a half to two years on average, the company did not finance the replacement rent for the buyers, and did not compensate them at all for the delivery delay. As a result, the buyers, most of them families with children, had to live cramped and crowded, and pay, at the same time, both a mortgage and rent. Many of them, it is claimed, fell into severe financial distress as a result and had to realize other assets or take out loans.
According to Adv. Asraf, this is systematic conduct on the part of ‘Ephal Real Estate’. According to him, at the beginning of 2021, the company presented the buyers with a false representation, according to which it would deliver the apartments to them within 60 days at the latest, and demanded from them the main payment for the transaction. According to Attorney Asraf, the company clearly knew at the time that there was no chance that the apartments would be ready for delivery on the specified date.
According to the lawsuit, some of the buyers balked at making the main payment for the apartment at this stage, because many of them had to take out a mortgage and start paying it off in monthly installments. “To this day, about a year and a half after the payment of the ’60-day pre-delivery phase’, there is no delivery,” asserts Attorney Asraf.
Recently, according to Attorney Asraf, the contracting company pulled another trick, when it informed the buyers that Form 4 (occupancy) had been received, but hid from them the fact that it was a conditional approval that at all does not constitute an actual occupancy form.
According to what is alleged in the lawsuit, the company overdid it, when it informed the buyers, that it obliges them to pay arrears interest due to alleged late payments, when the buyers were never late in payments according to the agreement. Furthermore, asserts Adv. Asraf, the company, in its most impudence, calculated the arrears interest according to the delivery date specified in the sales agreement – which, as mentioned, was violated by it – and even deprived each and every apartment of more than two months of delay, according to the “successful method” .
In addition, it is claimed in the lawsuit, that although in the sales agreements the buyers were promised luxury apartments with high ceilings that increase the space, in practice they will be provided apartments with standard ceiling heights. An appraiser’s opinion was attached to the lawsuit, which stated that due to the violation of the commitment to high ceilings, the value of each apartment decreased by more than NIS 200,000.
Adv. Asraf. Photo: Nir Selkman
“This is a prestigious boutique project, which was marketed at very high prices for the area in its time,” asserts attorney Asraf, “the buyers paid the best of their money so that their family members would live a high quality of life in a special and luxurious apartment, when in practice, the delivery of the apartment is delayed, becomes more expensive, and in the end they will be given a standard apartment in the building high-rise”.
Due to all of this, at the same time as filing the lawsuit, Attorney Asraf submitted to the District Court in Tel Aviv a request to impose liens on the developer, and among other things, also a personal lien on the balance of the payment, in the amount of 10% of the price of the apartment, which the buyers are supposed to transfer to Aphel Real Estate ‘ before they receive the apartment in their hands.
In this step, Attorney Asraf asked to ensure that the balance of the payment would be transferred to the entrepreneurial company only after the apartments were handed over to the buyers, and not a minute before. The court was also asked to issue an “injunction”, instructing the company to immediately hand over the apartments to the buyers, when they are habitable , this based on her notice that Form 4 was received.
In a hearing held before the Honorable Judge Erez Yakuel of the District Court in Tel Aviv – the parties reached an agreement, according to which the entrepreneurial company undertakes to hand over the apartments to the buyers, on two dates, within 30 days. It was also agreed that the balance of the proceeds would be paid to ‘Ephal Real Estate’ upon delivery the apartments. At the same time, after receiving the balance of the consideration, the contracting company will provide a bank guarantee in the total amount of the payments received from it, which is in fact a self-imposed lien on the funds of the remaining payments of the buyers, as ruled by the court.
The entrepreneurial company did not abide by the agreement and a motion was filed against it according to the contempt order of the court in which the court ordered the company to hand over the apartments within a few days otherwise it would have to decide on the motion for contempt which has a criminal undertone of violating a judicial order.
Attorney Asraf: “We have decided to use all the legal tools at our disposal so that the tenants receive the apartments they were promised without any delay when they are fit for habitation, accompanied by the court, the developer can no longer disrespect the tenants as he did for a long time until we started legal proceedings against him.”
It was further determined that the legal proceedings in the buyers’ claim for compensation for the delay in handing over the apartments will continue, and that Attorney Asraf will retain the right, on behalf of the buyers, to seize the bank guarantee, according to the amount of compensation to the buyers that the court will rule on at the end of the day.