Claim against a renovation contractor: the client's rights and what to do

Which law applies to a renovation?

The Sale (Apartments) Law, with its warranty periods, applies to one who sells an apartment he built. It does not apply to a contractor who renovates an existing apartment for its owner. Relations with a renovation contractor are governed by the contract signed with him and by the Contract for Services Law, 5734-1974, which applies to any contract for doing work for payment where the contractor is not the client's employee (section 1 of the Law).

That is why the written contract matters so much: exactly what the work includes, which materials, the timetable, when payments are made and what warranty the contractor gives. Without a written contract, what was agreed is proved from the quotation, the messages and the conduct in practice, which is harder.

What do you do when you find a defect in the work?

Section 3 of the Contract for Services Law places two duties on the client. First, to notify the contractor of the defect within a reasonable time after discovering it or after it should have been discovered. Second, if the defect can be repaired, to give the contractor a proper opportunity to repair it.

A client who has not done so may not rely on the defect, unless the contractor knew of it (section 3(b)(1)). So give notice in writing, list the defects, attach photographs and set a reasonable date for repair. Oral notice is hard to prove.

What may you do when the contractor does not repair?

Under section 4 of the Law, if the contractor has not repaired the defect within a reasonable time after the notice, the client may choose:

• To repair it and claim reasonable expenses from the contractor.
• To deduct from the price, as long as the defect has not been repaired, the amount by which the value of the work was reduced because of the defect.

A defect whose repair is so urgent that the client cannot be required to wait for the contractor may be repaired without prior notice (section 4(b)). Where the defect cannot be repaired, the client is entitled to a deduction from the price (section 4(c)).

These remedies do not detract from other remedies for breach of contract (section 7), such as compensation for damage caused by the faulty work, compensation for delay if set in the contract, and termination of the contract where the breach justifies it.

When must the renovation contractor be a registered contractor?

In two situations: when the work concerns the structural frame of the building, whatever its cost, and when the cost of the works at one site exceeds the monetary ceiling set in the regulations. For work that does not concern the frame and is below the ceiling, the law does not require a registered contractor.

The source is section 14 of the Registration of Contractors for Construction Engineering Works Law, 5729-1969, and the Registration of Contractors for Construction Engineering Works (Monetary Scope and Professional Nature) Regulations, 5744-1984:

• Structural works (regulation 2). Works concerning the frame of a building are carried out by registered contractors only, even when their cost is below the ceiling. In a renovation this means, for example, demolishing or opening a load-bearing wall.
• Monetary scope (regulation 1). The ceiling relates to the cost of the works at one building site. In 2025 it stood at NIS 54,000 for works in a sub-branch and NIS 103,250 for works in a main branch. Renovations are a sub-branch (branch 131), so the ceiling relevant to a renovation is that of a sub-branch.
• Annual update (regulation 3). The amounts are updated on 1 January each year by the rate of increase of the residential construction inputs index for October compared with the previous October, rounded to NIS 50, and the Registrar of Contractors publishes them in the Official Gazette. According to the Central Bureau of Statistics, the October 2025 index rose by 5.0% compared with October 2024. On this calculation the ceiling for 2026 is about NIS 56,700 for a sub-branch and about NIS 108,400 for a main branch. The exact amount is the one in the Registrar's notice.

Example: a NIS 40,000 renovation that does not touch the frame does not require a registered contractor. A NIS 120,000 renovation does, and so does a renovation of any amount that includes demolishing a load-bearing wall.

A contractor who carries out such work without being registered commits an offence (section 16 of the Law). Before engaging a contractor for an extensive renovation, and certainly one that touches the frame, check in the Contractors Register that he is registered in the suitable branch. A complaint against a registered contractor can also be filed with the Registrar of Contractors: see the guide to complaints to the Registrar of Contractors.

What evidence is needed?

• The contract or quotation, and any change agreed during the work.
• Proof of every payment.
• Photographs and videos of the work and the defects, with dates.
• Correspondence with the contractor, including the notice of defects and the demand to repair.
• An opinion of an engineer or a suitable professional, describing the defects and estimating the cost of repair.
• Quotations or receipts from whoever actually repaired.

It is important to document the defects before repairing them. After the repair it is hard to prove what the state of the work was.

Where do you sue a renovation contractor?

The court is determined by the amount of the claim. A claim of up to NIS 75,000 is heard in the Magistrates Court on the fast track (regulation 78 of the Civil Procedure Regulations, 5779-2018). A claim for a low amount can also be filed in the Small Claims Court, up to the ceiling set by law. On the differences between the tracks, see the litigation page.

Before a claim, an orderly demand letter is usually sent. Sometimes the letter, together with an opinion, leads to a settlement without proceedings.

What if the contractor sues you?

A contractor who has not received the balance of his price may sue for it. A client who deducted from the price because of defects will have to show that notice of the defects was given in time, that an opportunity to repair was given, and that the amount deducted reflects the loss in value or the cost of repair. Here too, documentation in real time is decisive.

About the author

Adv. Amos Ilan is a lawyer (license no. 35320) and notary (license no. 214444). The office, at 17 Tzahal Street in Ness Ziona, 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, property appraisal and electrical and building systems, and he personally conducts the cross-examination of experts in construction defect cases.