The Sale (Apartments) Law sets inspection and warranty periods that run from handover, within which the developer must be notified of the defects. It is worth checking the time limits early. For general information on construction defects and the first steps: You have discovered a defect in your new apartment. What now?.
A representative body's claim for defects in the common property: the case of some 100 purchasers
In brief: Defects in the common property of a new building, such as the roof, lobby, car park and shared systems, are usually claimed by the representative committee on behalf of all the buyers. In a case we handled, involving three buildings in Rehovot, the claim ended in a settlement under which the developer paid NIS 2,978,750, and the representative committee carried out the repairs itself.
Naturally, before the representative committee signed the settlement agreement, we made sure that an option contract was in place with a contractor to carry out the required repairs. Then, once the settlement agreement had been signed and the payment received, the option with that contractor was exercised.
What happened in the case?
The representative committee of three new buildings in Rehovot, together with some 100 buyers, sued the developer for construction defects in the common property. The developer joined its own building contractor, which in the meantime had entered a stay of proceedings (insolvency), and some ten subcontractors.
The court appointed an engineer on its behalf, who inspected the buildings and submitted an opinion. In the first stage a partial settlement was reached: the developer replaced the intercom system in all three buildings. In the second stage a comprehensive settlement agreement was signed and given the force of a judgment.
What did the settlement achieve?
- A payment of NIS 2,978,750 to the representative committee, in place of repairs by the developer.
- The amount included a component for the works, plus VAT, and a compensation component.
- Legal fees, in addition.
- The representative committee carries out the repairs itself, with contractors of its choice, and bears responsibility for them.
Who sues for defects in the common property?
The condominium's representative committee represents the apartment owners in all matters concerning the common property, so it is the natural claimant. Buyers can join the claim, and it is advisable for them to do so, particularly where there are also defects in the apartments themselves. A joint claim saves money on expert opinions and strengthens the position against the developer.
Repairs or money: which is better?
The Sale (Apartments) Law gives the developer, in certain circumstances, an opportunity to carry out the repairs itself. But where the developer has already tried and failed, where trust has broken down, or where the scope is large, financial compensation allows the residents to choose a contractor and supervise the work. When calculating the compensation, it is important to include VAT, supervision and associated expenses, because the representative committee will actually pay them.
What happens when the building contractor collapses?
Liability towards the buyers lies with the seller, that is, the developer that sold the apartments. The collapse of the building contractor does not release it. In our case, the proceedings between the developer and the subcontractors continued even after the buyers had received their money.
When should you consult a lawyer?
Are you a member of the representative committee of a new building with defects? We will be glad to meet, go through the engineer's report and propose a course of action.
To arrange a call: 052-5927592, or on WhatsApp using the button on the website.
About the author
Amos Ilan is an advocate (Israel Bar no. 35320) and a notary (licence no. 214444). The office is at 17 Tzahal Street, Ness Ziona, and handles real estate transactions, construction defects, condominium disputes and civil litigation.
Disclaimer. This article describes a concluded case and is provided for general information only. It does not constitute legal advice and does not promise a similar outcome. Every case depends on its own facts and documents, so it is advisable to consult a lawyer before taking any step.
Questions and answers
How long is there to sue for defects in the common property?
Is the consent of all the residents required in order to sue?
The representative committee acts in accordance with the resolutions of the general meeting. It is advisable to adopt a formal resolution before filing a claim, including on how the costs will be shared.
Who pays for the engineers and other professionals?
Initially, whoever commissions them. The costs can be recovered under a judgment or a settlement.
Need a lawyer or a notary?
A short initial consultation call, to understand whether and how we can help.