Fact Sheet - Purchasing Property In Israel

Author:Ms Caroline Walsh
Profession:CWalsh Law Offices
 
FREE EXCERPT

Congratulations. You have finally found your dream home in Israel and you may even have agreed a price. But if you thought that was the end of the process, think again. Unlike in other countries which may have a standard procedure for the buying property, in Israel almost everything is up for negotiation. From the dates and times of the payments, to the length of time until completion and even the exchange rate to be used, all these issues need to be resolved in the purchase agreement. Welcome to the Middle East!

Once you have found a property to purchase and agreed a price with the sellers, a draft contract will be prepared and we will obtain the documents needed to prove the legal status of the property. The property may be registered or unregistered, freehold or leasehold, and the registration may be managed by a government institution, a public organization or a private developer. All this must be clarified. In addition, if there are building irregularities, outstanding liabilities or unpaid taxes on the property, you will not be able to register the property in your name. You need to make sure that you have all the necessary information before you sign the contract.

After the searches have been made, the details agreed and you are satisfied with the conditions of purchase, a binding agreement will be signed. The first payment is made on signing but you should ensure that the sellers do not get the money until your interest in the property has been protected - either by registration of a restriction at the Land Registry or, if the property is not registered (for example if you are buying an apartment "off plan"), with an alternative form of security from the seller - usually in the form of a statutory bank guarantee.

The purchase price is usually paid in installments over several weeks or months against receipt of documents from the seller showing that s/he has complied with his or her obligations under the contract or, if the property is being built, against progress with the construction work. If the seller has a mortgage on the property, this will need to be transferred or paid off against the earlier installments, particularly if you are also taking a mortgage to finance the purchase. If you are taking a mortgage, the various administrative requirements of the bank must be complied with in good time to allow for the funds to be available when needed. This can take around six weeks to organise, so don't leave it to the last minute...

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