Buying an apartment
Do you need a lawyer to buy an apartment?
No. The law does not require you to instruct a lawyer in order to buy an apartment. In practice, however, there are four stages of the transaction that are hard to handle yourself without putting your money at risk: checking the rights, drafting an agreement in which every payment is protected, registering a cautionary note, and reporting to the Israel Tax Authority within 30 days. When you buy from a developer, the project's lawyer represents the developer, not you.
What does the lawyer do in the transaction, and what happens when a step is skipped?
| Stage | What is done | What happens if it is skipped |
|---|---|---|
| Checking the rights | Land Registry extract or confirmation of rights, charges, attachments, who is authorised to sign | You pay someone who does not hold the rights, or buy an apartment subject to an attachment |
| The building file | Checking that the apartment conforms to the permit | Unauthorised construction passes to the buyer and may block a mortgage |
| The sale agreement | Payment schedule against security, the seller's representations, delivery date and compensation | Money is paid out without security; there is no remedy when a problem comes to light |
| Cautionary note | Registration immediately after signing (section 126 of the Land Law) | The seller can sell or charge the property again |
| Reporting and tax | Reporting within 30 days (section 73 of the Real Estate Taxation Law) and payment of purchase tax | Fines and interest |
| Registration | Transfer of ownership into your name | The apartment remains registered in the seller's name for years |
Buying from a developer: why is the project's lawyer not enough?
The developer's lawyer drafts the agreement for the developer and represents the developer. He does not check on your behalf the guarantee under the Sale (Apartments) Law, the specification, the delivery date or the compensation for late delivery. The law limits the legal fees the developer may charge you for its own lawyer, and those fees do not pay for any representation of you.
When should you consult a lawyer?
Before you sign anything, including a memorandum of understanding, and before you pay a deposit. A memorandum of understanding may be a binding contract, and a first payment made without security is the point at which most transactions that go wrong begin to go wrong.
How much does a lawyer cost when buying an apartment?
The fee is fixed in a written agreement, according to the type of transaction and its complexity. What affects the price and what it should include are covered in the article on legal fees in an apartment transaction. In any event you will pay purchase tax, registration fees and usually an appraiser as well, and these are not part of the legal fee.
Related reading: Checks before signing | Cautionary note | Land Registry extract | Buying a second-hand apartment | Buying from a developer
Questions and answers
Can the seller's lawyer represent me as well?
The seller's lawyer owes a fiduciary duty to the seller, who is his client. The interests of buyer and seller conflict precisely on the points that matter: the payment schedule, the security and liability for defects. That is why each party has its own lawyer.
The bank checks the apartment. Isn't that enough?
The bank checks that the apartment is suitable as security for its loan. It does not check your agreement, your payment schedule or your protections against the seller.
I am buying from a relative. Do I still need a lawyer?
A transaction within the family also involves reporting to the Israel Tax Authority and registration, and sometimes a tax exemption or relief that has to be claimed correctly. The family relationship does not change the need to check the rights.
Not sure the deal is safe? Let's start with a conversation
In an initial conversation we will go over the property, the other party and the payment schedule, and tell you what needs to be checked before you sign.