The Apartment Is Smaller than Promised or Differs from the Specification: What the Law Says

What must the contractor provide before signing?

Under section 2 of the Sale (Apartments) Law, the seller attaches a specification to the contract, together with maintenance and use instructions. Under section 4 of the Law, an apartment that differs from what is stated in the specification constitutes a non-conformity. Section 5 of the Law adds that a seller who has not provided a specification as required is deemed to have undertaken to deliver an apartment in which everything that ought to have been specified is of high quality.

The Sale (Apartments) (Specification Form) Order sets out what the specification includes, among other things a plan of the apartment at a scale of no less than 1:100. A 2008 amendment to the Order requires the specification to state the area of the apartment in square metres and the method of calculation, as well as the area of attached units, such as parking and a balcony. This was described in CC (Tel Aviv Magistrates' Court) 59528-12-17 Sasson v. N.T. The Israeli Company for Building Improvement (2022).

Gross or net: what is the difference?

"Gross area" usually also includes a proportionate share of the common property, such as the stairwell and the lift shaft. In CA 6025/92 Tzmitut v. Haroshet Himar, the Supreme Court held that a person outside the construction industry would not imagine that the area of his apartment includes parts of the lift shaft and the stairwell. A contractor marketing to the public therefore cannot use the term without explaining it.

In CA 8949/07, the Supreme Court expressed its displeasure at the practice of presenting gross area, even where a plan from which the area could be calculated was attached to the contract. Justice Rubinstein called on contractors to tell the purchaser in plain Hebrew what is included in the area and what is not.

When is the brochure binding, and when is the plan attached to the contract?

The case law has gone through several stages, and it is worth knowing them:

• Tzmitut (CA 6025/92): the brochure was the only document in which the area was stated, and it is therefore binding.
• Shitrit (CA 9085/00), Malka (CA 8913/02), Ohana (CA 10944/02) and Segal (CA 5602/03): where a plan was attached to the contract from which the reasonable purchaser could calculate the area by a simple calculation, the plan prevails over the brochure.
• Best (CA 7298/00): the apartment's dimensions could not be derived from the drawing shown to the purchasers, and the Tzmitut rule therefore applied again.
• Ahim Ezra (CA 8949/07): a floor plan with room dimensions was attached to the contract, but the area of the apartment could not easily be calculated from it, and the brochure was therefore binding.

The bottom line: it is not enough for the contractor to have attached a plan. The question is whether an ordinary purchaser could easily have learnt from it, at the time of signing, the area of the apartment he was buying.

"You saw the apartment before you bought it"

Contractors sometimes argue that the purchaser saw the apartment and therefore knew its size. In CA 8949/07 the argument was rejected. The court referred to CA 8124/00 Kanyonim Nechasim U'Vinyan v. Bnei Yaakov Nadlan, in which it was held that a purchaser who saw an apartment and did not measure it does not waive the claim that its area is smaller than promised.

Deviation from the specification other than in area

The same principles apply to other components. In CA 8949/07 the contractor was ordered to pay compensation for a lift generator that was not supplied. The permit designated a room for the generator, and the specification described a nine-storey building. The court held that a contractor who does not intend to supply a generator, despite having undertaken to build a room for it, must say so expressly.

The same judgment also held that the contractor was not entitled to convert a gas room that had been vacated into a storeroom and remove it from the common property. The purchasers' consent to removing part of the common property must be clear, express and specific (FHCA 2415/01 Plitzeh v. Sofiov; CA 3902/98 Miav v. Stoler).

Does 2% in the total area justify one room that is smaller than promised?

Not necessarily. The 2% rule in the specification form concerns the difference between the area in the specification and the actual area, and the case law has also applied it to a single room. In CC (Haifa Magistrates' Court) 21483-06-14 Gershkovitz v. Neot Hen HaGoren (2017), a claim concerning room dimensions was rejected because the deviation in the area of the room itself was within 2% and, according to the expert, did not impair the proper and convenient use of the room.

The position is different where one room is significantly smaller, and another room, larger than in the plan, "compensates" for it, so that the total area remains within the limit. In CC (Haifa Magistrates' Court) 8584-11-18 Zauber v. Rakafot BaGiva (2020), the bathroom was found to be about 0.6 sq m smaller than in the sale plan, more than a tenth of its area, even though it met the minimum area under the Planning and Building Regulations. The court observed, obiter, that compensation should be awarded for a non-conformity between the actual room and the sale plan regardless of the total area of the apartment, even if the reduction is "offset" in another room. The logic is simple: an apartment is not merely a sum of metres. A narrow bathroom, or a bedroom with no space for the furniture planned for it, impairs use even when the total number of metres is preserved.

The same judgment also offers a practical lesson. Compensation was not awarded there, because the damage was not proved by an appraiser's expert opinion. Anyone claiming that a room is smaller than promised needs a proper measurement of each room against the sale plan, and an appraisal opinion on the impairment of value or use.

How is the compensation calculated?

Compensation for missing area is usually loss of value: the difference between the value of the apartment that was promised and the value of the apartment that was delivered. An expert opinion from a real estate appraiser is therefore required, not only from an engineer. In CA 8949/07 the court appointed an expert who was both an engineer and an appraiser, and he examined both the defects and the loss of value.

For the other components of compensation, see the article How Much Compensation Is Awarded in a Construction Defects Claim.

What should be done before and after handover?

• Keep the brochure, the advertisements and all marketing material you received, even after signing.
• At the time of signing, check whether the plan attached to the contract states the net area of the apartment.
• Where there is concern about a discrepancy, request a measurement by a licensed surveyor or an appraiser close to handover.
• Send the contractor written notice of every deviation, within the time limits set out in the Sale (Apartments) Law.

About the author

Amos Ilan, Advocate, is a lawyer (Bar No. 35320) and a notary (licence 214444). The office is at 17 Tzahal Street, Nes Ziona, and handles real estate transactions, construction defects, condominium disputes and civil litigation. Alongside his legal work he has practical knowledge, not based on formal training, of engineering, appraisal and electrical and building systems, and he personally conducts the cross-examination of experts in construction defects cases.