Signing a real estate contract in Israel
Proper Steps to Signing a Contract
Before even drafting a real estate contract, you (the purchaser) and the seller should establish not only the price of the property but also the date of evacuation, the date of payment, and the presence and/or absence of furniture in the property. As your representative, your lawyer is responsible for verifying the existence and authenticity of any and all documents needed before signing a contract.
Among other things, your lawyer should do the following:
- Verify the status (payment/exemption) of property tax from the seller.
- Verify the status (payment/exemption) of land appreciation tax from the seller.
- Ascertain the status of any mortgage and/or third-party involvement.
- Obtain authorization from the mortgage registry.
- Verify that the sum of all utility bills prior to the transfer of occupancy is deducted from the price of the property.
- Establish a trust fund from which the price of the property will be paid to the seller.
Once all parameters are in place, it is highly important that your contract be drawn up or reviewed by your attorney before you and the buyer sign it.
Important Questions to Address When Signing a Contract
Which Rights in Relation to the Apartment Are Being Transferred?
Although most apartment purchases involve long-term lease rights, and rights to most apartments are sold “as is” (following a thorough investigation by the buyer), there are exceptions to the rule. There is a wide spectrum of legal rights that can be transferred by contract, ranging from ownership to short and long-term leases.
Are Any Contractual Rights in Relation to the Apartment Being Created?
Contractual rights are rights that arise from an agreement itself between the buyer and seller, such as a seller allowing a buyer to erect a structure on his land which then becomes the house to be sold, and other creative arrangements. To a certain extent, all contracts involve certain contractual rights, such as liability for physical defects. It is important that your lawyer attempts to tailor your contract to any such concerns or special requirements you may have.
Final Measures Before Signing a Contract
Even if your lawyer is the best in the business, it is strongly recommended that you read and re-read any contract carefully before agreeing to sign it. You don’t want to buy rights to a property, and later find out that the rights contained in your contract do not mean what you thought they did. With that being said, if your lawyer is competent and experienced, you can generally trust that the contract he will prepare will represent your interests well.