In a decision rendered recently in the case of Alum Ramot vs. David Amar (civil case (Krayot) 45392-10-20), the court reiterated prior caselaw in which it was held that when an apartment is delivered to the buyer in the absence of a Form 4, this is not deemed to constitute delivery.

In this case, according to a sale contract signed between the seller and the buyer, the seller agreed to sell the buyer a penthouse apartment in a construction project involving a plot of land located in Kiriat Ata, as part of a “combination” transaction. The rights to the land were registered in the name of a third party and there was an old building on the land that had to be demolished. A dispute broke out between the landowner and the seller in connection with the “combination” transaction contract, and consequently, the landowner did not remove the old building. The apartment was delivered to the buyer, but, due to the non-removal of the old building, no Form 4 was issued.

In its decision the court reiterated prior case law according to which when an apartment is delivered to a buyer in the absence of a Form 4, the apartment is deemed not to have been delivered. The court also ruled that the failure to receive a Form 4 constitutes a breach of contract that entitles the buyer to receive compensation due to late delivery of the property in accordance with Section 5a of the Sales Law (Apartments), 5733-1973.

The court also held that in the circumstances where a Form 4 is not expected to be received in the foreseeable future, the buyer is exempt from making any additional payments on account of the purchase price, due to the position taken by the courts that in the absence of an explicit clause excluding the application of Section 23 of the Sales Law, 5728-1968, which in this case was not include in the contract, the obligation to deliver the apartment and to pay the consideration are integrated and parallel obligations. In the case at hand, where there is no assurance that the seller will be able to obtain a Form 4 meaning that she will be unable to deliver the apartment to the buyer in the foreseeable future, the buyer is not obligated to risk his money by making additional payments to the seller.

For a full version of the court’s decision (in Hebrew), Click here.

Note: This overview provides concise information for informational purposes only. It does not constitute legal advice and should not be relied upon as such.