עורך דין נדלן ומקרקעין אוהד שפק

Capital Gains Tax – Linear Rate

אוהד שפק — Sun, 28 Jul 2024 07:32:11 +0000

Israel’s Capital Gains Tax (Hebrew: Mas Shevach) is a tax imposed by the state on real estate sellers for the profit gained from selling property. The law provides an exemption from Betterment Tax under certain conditions up to a ceiling of approximately 5 million NIS. This means that if a seller owns more than one residential property, he/she may be required to pay Capital Gains Tax when selling a property in Israel other than their primary residence, but only on the profit earned, not the entire sale amount.

Linear Tax Rate

Before 2014, sellers could receive an exemption from Capital Gains Tax every four years when selling a residential property. However, starting January 1, 2014, a benefit called “Linear Tax Rate” was introduced. This benefit exempts sellers from Capital Gains Tax for the period up until the beginning of 2014, while profit from 2014 onwards is subject to Capital Gains Tax as per the law.

For instance, if someone decides in 2024 to sell a property they acquired in 1994, they will only pay 1/3 of the Capital Gains Tax. This is because the tax is calculated over 30 years but is only applicable to profits earned over 10 years, potentially amounting to hundreds of thousands of shekels.

Reducing Capital Gains Tax

Capital Gains Tax can be reduced through expenses intended to increase the property’s value, such as legal fees for purchasing or selling the property, purchase tax paid at the time of acquisition, fees for brokers and appraisers and lawyers at the time of purchase and sale, Betterment Tax paid on the sale to the municipality, interest paid on the mortgage throughout ownership, and more.

Cancellation of Linear Tax Rate = Sale of Old Apartments for Immediate Investment

On January 16, 2024, a taxation law (betterment and purchase) (amendment) for the year 2024 was published, in which Israel’s Ministry of Finance is requesting a gradual cancellation of the benefit in the form of the Linear Tax Rate starting in 2026.

This means that any property sale until the end of 2025 will benefit from a relative exemption from Capital Gains Tax until the end of 2013. For property sales in 2026, a 5% tax will apply to the profit accumulated until 2014, with an additional 5% each subsequent year until the linear beneficial calculation is completely abolished by January 2030.

According to the Israeli Ministry of Finance, the Linear Tax Rate does not encourage investors to sell their properties, thereby affecting housing supply and contributing to rising property prices. Furthermore, the claim is that most beneficiaries of this tax benefit own investment properties in high-demand areas in the center of the country.

Therefore, to encourage additional housing units entering the market and to equalize the tax burden on property sellers for investment purposes, regardless of when the properties were purchased, the law proposes a phased cancellation of the Linear Tax Rate calculation from 2026 until its complete abolition in 2030.

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Breach of Contract in Israeli Real Estate Law

אוהד שפק — Sat, 27 Jul 2024 12:39:00 +0000

The purchase and sale of real estate property in Israel is typically conducted under an agreement known as a “sales contract”.

A significant requirement of such an agreement is that it must be in writing. While the Israeli Contract Law allows for oral agreements between parties, for real estate transactions the agreement must be in writing.

Part of the sales contract is dedicated to cases of breach of contract, whether by the buyers or the sellers. This part is sometimes referred to as “Remedies” according to the Israeli law dealing with breaches of contract (Contract Law Remedies).

The contract usually specifies which clauses are fundamental and essential, such that breaching them constitutes a fundamental breach of the agreement. In addition to defining a fundamental breach of the agreement, the contract typically specifies the agreed-upon compensations that the breaching party must pay to the other party.

An interesting case of breach of contract recently came before the Tel Aviv court.

In 2012, the Magdal family purchased an Apartment in the Israeli town of Shoham from the Ronen family for a total of 3.375 million NIS.

Before the parties signed the agreement to purchase the home, they discovered that the home was not built according to the original building permit.

Therefore, it was agreed in the contract that the sellers (Ronen family) would obtain a new building permit that would legalize the unauthorized construction within 12 months from the date of signing the agreement.

Despite this commitment, although the Ronen family did obtain a new building permit, it did not cover all the unauthorized constructions, as additional approval was needed.

The Magdal family filed a lawsuit for 337,500 NIS, alleging that the Ronen family breached the agreement fundamentally, and therefore they are entitled to the agreed-upon compensation without having to prove damages.

The Ronen family argued that they did obtain a new building permit and the agreement did not address cases where existing construction cannot be legalized.

Since the Ronen family did everything within their power and the full permit was not granted due to reasons beyond their control, they claimed that the demand for higher compensation by the Magdal family was unfair.

In this case, the agreement established an obligation to achieve a result. Therefore, failure to obtain the necessary building permits constituted a breach of the agreement. The court found that before signing the agreement, the Ronen family assumed the risk associated with not receiving the new building permit.

The Meaning of Breach of Contract

Magdal Family’s position – Failure to provide the permit constitutes a fundamental breach of the agreement entitling them to full compensation as agreed upon in the contract.

Ronen Family’s position – Magdal refused to perform the necessary adjustments after which a new building permit could be obtained, so their demand for agreed compensation is an unjustified and unfair claim. This is also due to the “substantial performance” doctrine, which supposedly allows Magdal to enforce the performance.

The court ruled that Magdal’s demand for Ronan to fulfill their contractual obligations is not unfair request. A demand by one side to the contract that the other side will fulfill their obligations as they are written in the contract is not considered to be in bad faith.

Only in circumstances that are accompanied by additional circumstances that can be seen as fraud or something similar can be seen in the request for a contractual right as conduct that is not in bad faith.

Regarding the enforcement of Magdal’s obligation to perform the contract, the court established that only in exceptional circumstances will it intervene in a contract between the parties, and this case is not an exceptional case.

Agreed Compensation

The Israeli Contract (Remedies) Law stipulates the right of parties to agree in advance on the amount of compensation to be paid without proving damage, and the Israeli court has an authority to reduce the amount if it finds that the compensation was determined without any reasonable relation to the damage that could have been foreseen in advance.

The existing rule in the Israeli courts is that they should not intervene with the consent of the parties, and generally, the courts will tend to respect the will of the parties and enforce the conditions of agreed compensation.

However, the courts have established that if the condition of compensation is formulated as an inclusive condition that cannot be refuted, then the court will more easily use the authority to reduce the agreed compensation.

In the case of the agreement between Magdal and Ronan, the breach of contract clause was formulated broadly and inclusively and did not distinguish between minor and major breaches, between fundamental and non-fundamental breaches, and therefore the court determined that Ronan must pay 220,000 NIS to Magdal.

(For further details, see Tel Aviv court case number 35694-09-13, Magdal v. Ronan)

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Registration Form – Buying a New Apartment in Israel

אוהד שפק — Fri, 26 Jul 2024 16:07:47 +0000

Is the Registration Form, that is signed by the buyers, shall be considered valid and binding sales contract?

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.

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Buying an Apartment in Israel – Seller’s Disclosure Duty

אוהד שפק — Fri, 26 Jul 2024 15:58:08 +0000

The purchase of an apartment is one of the most significant transactions a person undertakes in their lifetime. As part of purchasing an apartment, the buyer signs a sale agreement that regulates all details of the real estate transaction.

According to Israeli law, crucial requirement of the sale and purchase agreement of real estate is that it must be in writing.

While the Israeli Contract Law of 1973 allows contracts to be made verbally between parties, in the case of real estate transactions, the agreement must be in writing to be enforceable.

Buying the Apartment AS IS

In almost all of these agreements, it is stipulated that the buyer purchases the property “AS IS” (regarding a 2nd hand property rather than a new one).

Before signing the contract, the buyer should examine the property, its facilities, the building/structure it is in, and its surroundings.

The buyer usually confirms that after inspection they found the apartment suitable for their needs and satisfaction, acknowledges that they are purchasing the property “AS IS” and will not have any claims or demands against the seller in the future.

What does this clause mean, considering the buyer had inspected the property and purchased it AS IS, if the seller did not disclose all the information they knew or should have known?

Seller’s Disclosure Obligation

The duty of disclosure imposed on a seller of an apartment requires them to disclose existing defects, hidden flaws, and any relevant information concerning the sale.

This obligation is based on two principles: Section 12 of the Israeli Contract Law and Section 16 of the Israeli Sale Law.

Section 12 of the Contract Law states that parties negotiating a contract must act in bona-fide and in a customary manner. Breach of the duty to act in bona-fide and in a customary manner can include acts or omissions, including the non-disclosure of facts that, under the circumstances, should have been expected to be disclosed by a person conducting negotiations.

Even if the buyers could have discovered those facts themselves, the seller is not exempt from its disclosure duty and must disclose the necessary facts on his/her own initiative.

Seller’s Duty – If Knew or Should Have Known

Section 16 of the Israeli Sale Law imposes an enhanced duty on the seller, as they have access to information about the apartment. This section addresses the discrepancy arising from facts that the seller knew or should have known at the time of the contract but did not disclose to the buyer.

Thus, actual knowledge on the part of the seller about the discrepancy is not required. It is sufficient to establish a culpable basis for liability towards the buyer. The test is whether the seller knew or should have known about the discrepancy or those facts (see, for example, Civil Appeal case number 8068/11 Uri Eini v. Chen Shefer).

It should be noted that the Sale Law does not equate the responsibilities of the parties to the agreement. The seller must demonstrate that the buyer actually had knowledge about the discrepancy in order not to rely on it; While the buyer must show that the seller knew or should have known about the discrepancy (see, for example, District Court case number 27228-11-13 Hillel Masgana v. Eran Peretz).

Cannot Waive the Disclosure Obligation

In practice, the seller’s disclosure duty according to the Sale Law is a matter that cannot be waived.

Therefore, even if a clause commonly appears in sale agreements in Israel stating that the buyers found the property suitable for their needs and purposes and waive any claim or that they purchase the property “AS IS,” such a clause cannot exempt the seller from liability for defects in construction or discrepancy in the property (see, for example, Supreme Court case number 13698-03-11 Ninet Bublil v. Gdilin Investments and Properties Ltd.).

Seller’s Liability – “Should Have Known”

This liability of the seller, if they knew or should have known about the discrepancy or defect, is interpreted by the Israeli Supreme Court rulings in a manner that does not require actual knowledge from the seller but is based on a basis of negligence.

In other words, a reasonable person in those circumstances would have known about the facts establishing the discrepancy (see, for example, Civil Appeal case number 7642/97 Hannah Shterit v. Bella Nosbaum).

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Aliyah Rights and Purchase Tax Benefit for Olim

אוהד שפק — Thu, 25 Apr 2024 06:56:19 +0000

The Israeli Ministry of Finance is proposing changes to the purchase tax benefits for new immigrants ("oleh").

Currently, Jewish immigrants can get a discount on purchase tax for a residential property they buy within a year before entering Israel and up to seven years after. However, this benefit will no longer apply to immigrants who already own a residential apartment in Israel.

Regular Purchase Tax for Apartments in Israel

In Israel, the purchase tax for a residential apartment depends on whether the buyer owns an existing apartment. If the buyer doesn’t own an apartment (or only owns partial ownership that doesn’t constitute a full ownership – up to 1/3 of a residential property or up to 1/2 if it was inherited), they benefit from a reduced tax structure. As of 2024:

• No tax applies up to a value of NIS 1,978,745.
• A 3.5% tax applies between NIS 1,978,745 and NIS 2,347,040.
• A 5% tax applies between NIS 2,347,040 and NIS 6,055,070.

This lower tax structure also applies to residents who became Israeli citizens within the past two years or returning residents who were abroad for a long time.

Current purchase tax regulations offer a discount to new immigrants (“Oleh” or “Olim”) who buy property within one year before entering Israel and up to seven years after. This property can be a residential apartment for the immigrant’s own use, a business where the immigrant or a close relative works (relative includes spouse, children, parents, spouse of a child, and siblings), or a combination of residential and business property.

“For the Olim’s residence”

According to the regulations, the residential apartment must be used for the immigrant’s residence and courts in Israel often discuss the phrase “for the immigrant’s residence” – whether use for a few months of the year is considered the immigrant’s residence and the like. We have previously written about the rulings on this issue, and you can read it here.

Proposed Changes to Purchase Tax Benefit for Olim

The Ministry of Finance argues that there’s no reason for immigrants who already own an apartment to receive a lower tax rate when buying another one. Therefore, the proposed change limits the benefit to new Olim who don’t currently own a residential apartment in Israel. Additionally, the proposed benefit structure offers a more gradual tax increase:

• Up to NIS 2,500,000: No tax on the exempt portion (NIS 1,978,745 in 2024) and 0.5% tax on the remaining amount.
• Between NIS 2,500,000 and NIS 4,000,000: A flat 0.5% tax on the entire value.
• Above NIS 4,000,000: Tax according to the regular resident rates (no benefit).

Protection for Existing Olim

To protect immigrants who arrived before the regulation change, they can choose whether to use the old or new regulations when buying an apartment. Existing purchases by new immigrants will continue under the old regulations.

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Canceling a Contract – Speculative Land

אוהד שפק — Sun, 24 Sep 2023 04:59:34 +0000

A seller sold land for 10% of its fair market value and requested to cancel the agreement, claiming that he was "misled" and made a mistake. The court ruled that the buyer did not mislead him and did not know the fair market value of the land, but that it was "fair" to cancel the transaction.

Israeli law defines what constitutes “misrepresentation” in a contract. A person who enters a contract because of a misrepresentation made by the other party to the contract (or by someone acting on their behalf) is entitled to cancel the contract. Misrepresentation can also be a failure to disclose information that the other party was required to disclose – according to the law, according to custom, or according to the circumstances.

Of course, the plaintiff, who is essentially claiming that they were misled into entering the contract and is therefore seeking to cancel the contract between the parties, must prove that the other party to the contract, or someone acting on their behalf, was aware of certain facts and deliberately withheld them.

But what is the mistake defined under misrepresentation?

The Israel Contract Law states in the section dealing with error that a person who enters a contract due to a mistake and it can be assumed that if it were not for the mistake, he would not have entered that contract, and the other party to that contract knew or should have known about it, then he is entitled to cancel the contract.

Court rulings in Israel have ruled that to prove the error, it must be proven that there is a connection between the error and the signing of the agreement and that it is not a mistake that is not in the feasibility of the transaction.

Cancellation of a contract from justice

However, even if you are unable to prove that the other party knew about the error or should have known about it, according to Israeli law the court may cancel the contract – “if it saw that it was just to do so”.

Sale of real estate for 10% of the real value

Yosef and Guy were the owners of agricultural land in the northern city of Afula. Yosef was the owner of 1/4 of the land and Guy was the owner of 1/6.

In July 2016, the parties signed an agreement whereby Yosef sold his land to Guy for about NIS 220,000 and the sale agreement stated that it was agricultural land.

When the parties to the transaction filed a tax declaration with the Israeli Tax Authority, the Tax Authority demanded capital gains of about NIS 500,000, claiming that the land was worth NIS 2.2 million. The Israeli Tax Authority based this on information it received from the Afula Municipality, which stated that the land was included in a planned expansion that would be approved within one to two years.

The seller and the buyer appealed the Tax Authority’s decision, arguing that the Tax Authority had ignored the fact that the land was sold for NIS 220,000. They also argued that there was no guarantee that the planned expansion would be approved within one to two years.

The Tax Authority rejected the appeal, arguing that the land was “speculative land” because it was adjacent to an approved planning area. The Tax Authority argued that the land’s value should be based on the assumption that the planned expansion would be approved, even though there was no guarantee that it would be.

The seller filed a lawsuit and claimed he was misled by the buyer, who was a real estate developer. The seller alleged that the buyer knew that the land was likely to be rezoned for residential development, but he did not disclose this information to the seller.

The buyer denied that he misled the seller. He claimed that he did not know about the rezoning process when he purchased the land. He also argued that the seller’s claim of being misled was simply a mistake of judgment, which is not grounds for canceling a contract.

The District Court of Nazareth ruled in favor of the seller. The court found that the seller did not prove that the buyer misled him, but that it was “fair” to cancel the contract. The court reasoned that the seller had sold the land at a fraction of its fair market value, and that it would be unfair to require him to uphold the contract.

The court ordered the buyer to return the land to the seller and to pay the seller NIS 140,000 in compensation for the loss he suffered.

Additional information:

• The term “speculative land” refers to land that is purchased with the expectation that its value will increase in the future. In this case, the seller was unaware that the land was likely to be rezoned for residential development, so he did not purchase it with the intention of speculating on its future value.

• The court’s decision is based on the principle of fairness. The court found that it would be unfair to require the seller to uphold the contract, given that he sold the land at a fraction of its fair market value.

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The Right of Civil Servants to Protest / Walla News

אוהד שפק — Sat, 22 Jul 2023 08:29:02 +0000

In mid-July 2023, our office submitted a petition to the Israeli High Court of Justice on behalf of the Israeli Democracy Guard (an NGO) against the ruling of the Israeli National Labor Court from the end of June 2023.

The National Labor Court rejected the request of attorney Shaul Cohen to allow him to participate in the protests taking place throughout the country against the government’s legislative plan called “Legal Reform.”

Our office asked Israel’s High Court of Justice to rule that the protest demonstrations are not demonstrations “on a political issue” in which public legal service employees are prohibited from participating, since these are demonstrations in which diverse publics participate and whose purpose is to preserve democracy and prevent structural damage to the justice system.

In our opinion, the ruling of the National Labor Court leads to the position that, in practice, there is a prohibition on the participation of Israeli civil servants in any demonstration and on any subject.

The Labor court ruled that “any person’s participation in a demonstration constitutes by definition an identification, even if partial, with the ideas that the demonstration represents, just as participation in demonstrations whose purpose is to express criticism of government policy necessarily constitutes taking a critical stance against government policy.”

In the petition, we emphasized that this position voids the legislator’s intent, which distinguished between demonstrations in which civil servants are allowed to participate and demonstrations in which participation is prohibited, which are demonstrations or processions “of a political nature.”

We also asked the HCJ to determine that the interpretation given by the HCJ itself to the term “demonstrations on a political issue” in the ruling regarding the demonstrations in Goren Square in 2017 (demonstrations that were held at the time near the home of the Attorney General at the time, Avichai Mandelblit – HCJ 6536/17 Movement for the Quality of Government v. the Israel Police) obliges the Labor Court also regarding the restrictions imposed on public servants from participating in certain demonstrations, and that the restrictions in the law do not prohibit participation in any demonstration.

To read the full petition in the HCJ 5200/23 Adv. Shaul Cohen v. the National Labor Court – click here (Hebrew only).

To read the article in Walla News – click here (Hebrew only).

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Buying a New Apartment in Israel – The Seller’s Disclosure Duty

אוהד שפק — Tue, 11 Jul 2023 13:17:00 +0000

When the seller is also the developer or contractor of the property being sold, there is an increased duty of disclosure due to the gaps in information and professional experience between the seller and the buyer.

Buying a New Apartment in Israel

A buyer of a new apartment in Israel which have not been built or in the process of building cannot see the apartment itself or its surroundings. It is the duty of the seller, whether a contracting company or a real estate developer, to ensure that the information the buyer receives contains all the details relevant to the purchase in a clear and accessible language, so that the buyer can make an informed decision about whether to purchase the apartment.

Israeli courts have already ruled that pre-contractual presentations made by a contractor in the framework of negotiations for the purchase of an apartment that is being bought “on paper” are part of the contract itself. This is due to the unique characteristics of such contracts, which are characterized by unequal power relations and significant information gaps between the contractor and the ordinary person who comes to buy an apartment from them.

The Case of Netta Mor

In July 2014, Netta Mor purchased an off-plan apartment in a luxury project in the Tel Aviv neighborhood of Bavli for approximately NIS 5 million. The apartment was designed with glass exterior walls facing the landscape. However, four years later, during a tour of the construction site, Netta discovered that the developer had built another building that would block the view from the south side of her apartment. Netta contacted the developer company to demand compensation, but the parties were unable to reach an agreement. Netta then filed a lawsuit in the Tel Aviv District Court.

The District Court dismissed Neta’s lawsuit, partly because she was represented by a lawyer when she signed the purchase contract. The court reasoned that the lawyer should have advised Neta about the possibility for view obstructions.

Netta Mor did not give up and appealed the District Court’s decision to the Israeli Supreme Court. The Supreme Court accepted her appeal and overturned the District Court’s decision.

The Israeli Supreme Court ruled that the blocking of the view from Netta’s apartment by a building that the developer-seller built himself amounted to a violation of the increased duty of disclosure applicable to the developer, especially when the building blocking the view was built by the developer himself.

The court made it clear in its decision that as part of the negotiations that preceded the signing of the sales contract, the developer had a duty to disclose to Neta the outline of the building permit application he had submitted for the construction of the building that blocked the view.

(Civil Appeal 2274/21 Netta Mor v. Elad Israel Residency LTD)

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Brokerage Agreement – Family Member

אוהד שפק — Tue, 11 Jul 2023 13:09:03 +0000

A family member who is not the owner of the property signed a brokerage agreement (for example, a spouse, brother, or sister who has no rights in the property). Will the property owner be required to pay brokerage fees to the broker who worked to sell their property?

In a recent case (2023, the Shalom court in Tel Aviv), a real estate broker sued a pair of brothers who had signed a brokerage agreement with him. The broker argued that he was entitled to brokerage fees, even though the agreement had been signed by only one of the brothers, who was not the owner of the property.

Section 9(a) of the Israeli Real Estate Brokers Law states that a real estate broker must have a written brokerage agreement signed by the “client” to be entitled to receive brokerage fees. The “client” is typically the owner of the property being sold, but the Knesset (the Israeli legislature) did not limit the definition of “client” to the owner of the property.

The term “client” is defined in the law as “a party to an agreement with a real estate broker to receive his services, whether he pays brokerage fees or not.” This broad definition of “client” means that even someone who does not own the property but has an interest in its sale can enter into a binding brokerage agreement.

The sale of the property to the tenant: the effective factor

The court ruled that the fact that the property was sold to the tenant who leases the property does not affect the broker’s right to receive brokerage fees. The brokerage agreement included a blanket agreement to pay brokerage fees “in any case that the property is sold during the exclusivity period,” and the agreement did not specifically exclude the possibility of a sale to the tenant.

The court found that there is no room to interfere in the contractual relations between the parties and to determine retrospectively new conditions and obligations that were not included in the agreement at all. If the parties wanted to exclude the tenant from the agreement, they should have stated this explicitly. Since they did not do so, the brothers are required to pay the agreed compensation to the broker.

(TAK Tel Aviv 69359-12-19 Oren Parnas v. Haim Zaltzman Gavish)

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Office activities

shpaklaw — Mon, 03 Jul 2023 10:03:23 +0000

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