Not necessarily. The end of the inspection period is not the end of the right to sue. A defect of which you gave notice within the period and which was not repaired remains a cause of action, as long as the prescription period has not expired.
Prescription in construction defects claims: how long you have to sue the contractor
In brief: A claim for construction defects is, as a rule, time-barred seven years from the day on which the cause of action arose (Sections 5 and 6 of the Prescription Law, 5718-1958). In LCA 830/06 Gelman v. Cohen Pituah-Dra'ad, the Supreme Court held that in a non-conformity claim against the seller of an apartment, the clock generally starts on the date of delivery. Where the defect was latent and could not have been discovered with reasonable care, Section 8 of the Prescription Law allows it to be argued that the clock started only on the day of discovery. The inspection and warranty periods under the Sale (Apartments) Law are a different mechanism, and the two should not be confused.
What is the difference between the inspection period and prescription?
The inspection period and the warranty period are set out in Section 4 of the Sale (Apartments) Law, 5733-1973, and in the Schedule to the Law. For a fundamental non-conformity, Section 4(a)(4) provides a particularly long inspection period of 20 years from the date the apartment is placed at the buyer's disposal. These periods determine which defects the contractor is liable for, and who must prove what. Prescription determines something else: until when a claim may be filed in court in respect of a right that has already arisen.
A defect discovered within the inspection period and not repaired does not disappear at the end of the period. But nor does it remain open to a claim forever. The periods for each type of defect can be calculated using the inspection and warranty periods calculator on this website.
From which day does the seven-year period start to run?
Under Section 6 of the Prescription Law, the period begins on the day on which the cause of action arose. In LCA 830/06 Gelman v. Cohen Pituah-Dra'ad (2 April 2008), it was held that in a non-conformity claim against the seller of an apartment, the starting point is the date of delivery. It was further emphasised there that the duty to notify the contractor of the non-conformity is a substantive requirement. The Court made clear that there is no point of contact between the running of prescription and the duty of notification: even a buyer who notified the contractor in time may face prescription if they did not sue within seven years, and a buyer who sued in time may fail if they did not give notice.
The practical implication: anyone who received an apartment some five or six years ago, and whose defects have still not been repaired, should check their position now, rather than spend another year corresponding with the contractor.
And what if the defect was discovered only after several years?
Section 8 of the Prescription Law provides that where the facts constituting the cause of action were unknown to the plaintiff for reasons beyond their control, which they could not have prevented by exercising reasonable care, prescription begins on the day on which those facts became known to them. A typical example is a waterproofing failure inside a wall or beneath the flooring, which comes to light only after a particularly rainy winter.
This protection is not automatic. The court examines whether a reasonable buyer would have discovered the defect earlier, for example if there were damp stains that were left untreated. In LCA 830/06 Gelman, the Supreme Court noted that in the case of latent defects there may be proximity between the date by which the buyer must notify the contractor and the start of the prescription period under Section 8.
In a claim founded in tort, for example against an engineer or a building contractor who is not the seller, the applicable provision is Section 89 of the Civil Wrongs Ordinance: where the damage was not discovered on the day it occurred, prescription begins on the day of discovery, provided that no more than ten years have passed since the day it occurred.
Does a letter to the contractor or negotiation stop the clock?
As a rule, no. A warning letter and meetings do not stop prescription from running. What stops it is the filing of a claim.
An important exception is an admission. Under Section 9 of the Prescription Law, where the defendant has admitted the existence of the right, in writing or before a court, the prescription period begins afresh from the date of the admission. The section adds that an act constituting performance of part of the right is treated as an admission. Accordingly, even a repair carried out by the contractor may, in certain circumstances, restart the clock. Whether repairs carried out by the contractor, or a letter from the contractor, amount to an admission is a question that depends on the circumstances. Thus, in CC (Petah Tikva Magistrates' Court) 27117-09-16 Daya v. Alon Karmeli Hashkaot (2021), the court held that repairs carried out by the contractor after a letter of demand were an admission that postponed the running of prescription. By contrast, in CC (Hadera Magistrates' Court) 21253-05-12 Tavor v. Li Ran Yizum VeHashkaot (2017), it was held that works carried out by the contractor over the years were not an admission, and the claim was dismissed on grounds of prescription. The burden of proving an admission lies on the plaintiff.
A letter to the contractor is nevertheless required. Without notice given in time, the buyer may lose the right to rely on the non-conformity (Section 4A of the Sale (Apartments) Law). For drafting the letter, the website offers a letter-to-contractor generator.
Are the rules different for defects in the common property?
The prescription period is the same. The difference lies in who brings the claim. The representative committee of the condominium is authorised to sue for defects in the common property, as held in LCA 1025/17 Neot Mizrahi v. Netzigut Mendel Zinger 23 (27 June 2017). In a new building it takes time until a representative committee is elected and gets organised, and that time counts. See also the article on claims by the representative committee for defects in the common property.
What should you do right now?
- Record the exact date of delivery, according to the delivery protocol.
- Keep every letter to the contractor and every reply from the contractor, with the dates.
- Photograph every defect on the day it is discovered, so that you can prove when it was discovered.
- If more than five years have passed since delivery, review the matter with a lawyer before continuing negotiations.
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.
Disclaimer. Nothing in this article constitutes legal advice or a substitute for it. Each case is examined on its own facts and documents.
Questions and answers
The contractor says the inspection period has ended. Is it too late to sue?
I received the apartment eight years ago. Is there any point in checking?
Yes, if the defect was latent and was discovered only recently, or if the contractor admitted its liability, in writing or by an act constituting performance of part of the right. In both cases the documents and the timeline need to be examined.
Does a small claim stop prescription?
Filing a claim stops the clock in respect of what is claimed in it. Choose the forum and the amount carefully, because the ability to split a claim and sue again on the same cause of action is limited.
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