What are the important things to examine before signing an agreement to purchase an apartment, and what is important to stipulate in the sale agreement?
- Extract of a land registry record from the Land Registry, commonly known as a Tabo extract.
- Alternatively, in the case where the owner holds leasehold rights, we will issue a rights certificate from the Israel Land Authority and/or the land developer.
- We request to see the floor plans of the apartment for sale.
- If the property is a divided apartment with internal division into sub-units, it is necessary to examine whether the seller has the appropriate permits for legally dividing the apartment, and if not, the buyer should consider the building violation and its implications.
- To check if there is a note in the building file regarding an expropriation of the property. Because even though the seller declares this in the sales agreement, it does not guarantee that there is indeed no note about expropriation.
- Request the lease agreement from the seller, including any extensions, if it is a leasehold right and not private ownership held by the seller.
- If you purchase a new apartment from a contracting company, it is also recommended to request the development agreement, which is essentially an agreement that defines how the contracting company building the project is supposed to carry out the construction, and under what conditions it is obligated to comply. If the company does not build according to the development agreement, for example, if it does not meet the deadlines set for it in the development agreement, then it is in breach, and this could harm you as a buyer from the contracting company.
- Retrieving Hydra's building permit file and examining all its contained documents, such as demolition orders, preservation orders, and more.
- Inquiry regarding betterment levy: Is there a betterment plan that has come into effect?.
- Rented Property - If the apartment being sold is rented out, you must review the lease agreement, the eviction date, existing security deposits, etc. Note that if there is a tenant in the apartment without a lease agreement, this could delay or prevent the buyer from obtaining a mortgage, as the bank may claim the tenant is like a protected tenant in the apartment.
- Request a letter of intent from the bank regarding the seller's mortgage balance on the apartment.
- When purchasing a new apartment from a contractor, we examine the contracting company selling us the apartment. Many times, contracting companies open separate new companies for the purpose of establishing a new project. Therefore, it turns out that the same contracting company that is carrying out the project does not really have a solid background. Therefore, we request that the contracting company provide a personal guarantee or a guarantee from the parent company.
- When purchasing a new apartment from a contractor, we examine the matter of the actual apartment area matching the plans. This is because when purchasing an apartment in a project that has not yet received a building permit, the area presented to us in the plans is not accurate and it is possible that after the building permit is received, there will be a deviation in the area. So what takes precedence? The buyer can demand one of two things: either the contractor will adjust the price of the apartment to the actual size of the apartment, meaning a discount in the apartment's price, or request to cancel the contract without any penalty.
The points presented above are the tip of the iceberg regarding the complex issues involved in purchasing an apartment, whether it is a new apartment from a contractor or a second-hand apartment. In any case, one should not be indifferent and sign the sales agreement as is. It must be examined in all its aspects before signing it.
Good luck to the buyers and a happy and prosperous new year to the readers.
