Buying from a developer
Compensation Calculator for Late Delivery of an Apartment
Is the developer late in delivering? The calculator works out the compensation under section 5A of the Sale (Apartments) Law, in the version that applies to your contract: the version for contracts signed on or after 7 July 2022, or the former version. The compensation is due without any need to prove damage.
Disclaimer. The calculator provides an estimate only, based on the data entered and the assumptions set out here. It does not constitute legal advice, a professional opinion or an undertaking as to any outcome, and should not be relied on without review by an advocate. The binding text is that of the law and the contract, and the actual calculation may differ depending on the circumstances. The office is not liable for any loss caused by use of the calculator or by reliance on its results.
How much compensation is due for late delivery?
In a contract signed on or after 7 July 2022, if the apartment was not delivered within one month of the contractual date, the buyer is entitled to compensation without proof of damage. The compensation starts at the end of the first month and is calculated by reference to the rent of an apartment comparable in size and location: up to the end of the fourth month, the rent itself; from the end of the fourth month to the end of the tenth month, 1.25 times the rent; and from the end of the tenth month onwards, 1.5 times. If the contract sets higher compensation, the buyer is entitled to the higher of the two.
And what if the contract was signed before 7 July 2022?
Then the former version of the section applies: entitlement arises only where the delay exceeds sixty days, and the compensation is then calculated from the contractual date, at 1.5 times the rent until the end of eight months and 1.25 times thereafter. The calculator selects the version according to the signing date you enter.
When is compensation not due?
Under the new version, the compensation does not apply if the delay was caused solely by an act or omission of the buyer, or by circumstances within section 18(a) of the Contracts (Remedies) Law. Under the old version, the parties could agree in the contract that the compensation would not apply to a delay resulting from circumstances beyond the seller's control. In many disputes this is the central question, so it is advisable to keep a record of your correspondence with the developer from the very first day of the delay.
How is the rent of a "comparable apartment" determined?
This is the one figure the calculator cannot know, so you enter it. In practice, it is compared with rental apartments of similar size and location, and in a dispute the amount is usually determined by an appraiser's opinion. Because the compensation is multiplied by the number of months, a small difference in the rent changes the total.
Part of a month: a full month or pro rata?
The law speaks of compensation "for each month or part thereof". The calculator shows both options: each part of a month counted as a full month, and a pro rata calculation by days. The difference is relatively small, but it is worth knowing that it exists.
A full explanation of the subject can be found in the article Late Delivery of an Apartment from a Developer.
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Questions and answers
Do I need to prove damage to receive compensation for late delivery?
No. Compensation under section 5A of the Sale (Apartments) Law is awarded without proof of damage. A buyer who has suffered greater damage may claim it under the law of contracts.
From what date is the delay counted?
From the delivery date set in the contract. In a contract signed on or after 7 July 2022, compensation applies only if the delay exceeds one month, and it is paid from the end of the first month.
Can I receive both the compensation in the contract and the compensation under the law?
No. The buyer is entitled to compensation for late delivery either under the law or as set in the contract, whichever is higher.
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.