What Happens if the Developer Doesn’t Deliver My New Apartment on Time?

When buying a new home in Israel, most buyers expect the developer to deliver the new apartment on time, or at least close to the date specified in the contract. If you’re facing a delay in the delivery of your apartment, you’re not alone—delays are not uncommon in Israel and can have serious financial and logistical consequences. Whether you’re ending a rental lease, planning a move, or coordinating renovations, a delay can significantly disrupt your plans. Fortunately, Israeli law provides clear guidelines on your rights and the compensation you may be entitled to if the developer fails to deliver your new apartment on time.

Am I entitled to financial compensation for a delay?

Yes. According to Section 5A of the Sale (Apartments) Law, you’re entitled to compensation if the delivery is late—even if you can’t prove any damages. The exact amount depends on when your contract was signed:

If you signed before July 7, 2022:

• The law gives the developer a 60-day grace period.
• From day 61 to month 8, you’re entitled to 150% of the market rent for a similar apartment.
• From month 9 onward, compensation drops to 125% of market rent.

If you signed on or after July 7, 2022:

• The grace period is shorter—only 30 days.
• Months 2–4: You get 100% of the market rent.
• Months 5–10: You receive 125%.
• From month 11 onward: You’re entitled to 150% of market rent.

The compensation is based on average rental prices for similar apartments in the same area.

Are there situations where I might not get compensation?

Yes, but they’re limited. If the delay was caused by events outside the developer’s control—what the law calls force majeure—they may not have to compensate you. This includes things like natural disasters, wars, government shutdowns, or pandemic-related delays.

However, just claiming a big event happened isn’t enough. The developer has to prove the event was both unforeseeable and unavoidable at the time you signed the contract. Courts in Israel generally hold developers to a high standard on this matter.

What steps should I take if my apartment is not delivered on time?

To protect your rights and make sure you get the compensation you deserve, you should:

1. Read your contract carefully to understand the delivery terms and any clauses about delays or compensation.
2. Talk to the developer and ask for an updated delivery date and a written explanation of the delay.
3. Keep records of all your communications and any expenses caused by the delay.
4. Speak to a real estate lawyer who understands Israeli property law. They can help you claim compensation if needed if your new apartment is not delivered on time.