Registration Form – Buying a New Apartment in Israel

Yitzhak Lachiani sought to purchase a residential apartment in the southern city of Ashdod’s “Le Deauville” project. 

As part of this process, Lachiani and the company who is building the project signed a “Registration Form” prepared by the company, mentioning Lachiani’s interest in purchasing a 4 bedroom apartment for 2,400,000 NIS.

What is the “Registration Form” / Purchase Request?

The Registration Form, also known as a Purchase Request or Registration Document, is a familiar document presented to potential buyers at the sales offices of real estate companies in Israel. 

These sales offices require potential buyers to sign the document so that the company can “reserve” the chosen apartment during negotiations of the sales contract and its appendices.

Typically, buyers are required to provide a deposit check or make an initial payment to the real estate company before they begin negotiating the terms of the sales agreement. 

However, the registration form usually includes very important details, such as the price to be paid for the apartment, the structure of the payment, whether the sum to be paid is linked to any price index, the date the apartment would be ready to live in, etc.

Yitzhak Lachiani’s Case

Although the form was signed before the construction phase and before obtaining a building permit, it detailed payment terms, exact location of the apartment including its number, and other specifics. 

Additionally, Lachiani made several payments totaling 106,823 NIS, amounting to 4.5% of the agreed price. The Registration Form explicitly stated that a full sales agreement would be required to be signed by the parties.

Several years later, the company obtained a building permit. At that point, they informed Lachiani that he would need to add an additional 310,000 NIS to the price listed on the Registration Form, and that the apartment’s size would be 10 square meters smaller than initially indicated.

After failed attempts to reach a compromise on the changed terms, the company rejected Lachiani’s registration request for the project and stated they would refund the amounts he had already paid. 

Ultimately, the apartment was sold to other buyers.

Lawsuit in the Ashdod Magistrate’s Court

Lachiani filed a lawsuit against the company for breach of the sales agreement for the apartment. He argued that the Registration Form constituted a binding sales contract, and the company was not authorized to change the terms agreed upon.

In contrast, the company argued that the Registration Form did not amount to a binding agreement between the parties, and at most, it was an offer that was not accepted.

The Court accepted Lachiani’s claim and determined that the circumstances indicated the Registration Form constituted a binding sales contract.

The company was therefore obligated to fulfill its commitments as stated in the form, unless it exercised its right to postpone the registration request, within a reasonable time after signing the Registration Form.

The court justified its decision by emphasizing the specific commitments made in the Registration Form:

1. Specific identification of the apartment being sold, including its exact location in the building to be built.

2. Price and terms of payment – including a price update mechanism that will be linked to the
index.

3. Lahiani paid 4.5% for the apartment as a down payment.

Furthermore, the court clarified that even if certain details were missing, such as the exact timing of the transfer of possession or specific apartment specifications, these were minor details that could have been easily completed and did not negate the binding nature of the real estate sales contract.

In conclusion, the court’s decision underscored the specificity and finality of the agreements between the parties, affirming that the Registration Form indeed constituted a legally binding sales contract, despite its title as a “Registration Form” or similar designation.