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INVESTMENT INSURANCE AND PAYMENT IN PURCHASING A NEW APARTMENT IN ISRAEL

Investment Insurance

 Make sure that all funds you pay in advance for the apartment that is being built or future to be built will be insured according to the selling law. It is important to read the selling regulation (apartments) investment insurance for apartment buyers.

According to the selling law the seller must not get more than 7% from the apartment price unless he insured your investment in one of the following ways:

  • Is in a surety bond with you
  • Insured himself in a known insurance company for the favor of apartment buyers
  • Mortgaged the apartment or a proportional part of the plot in a first mortgage.
  • Wrote a warning note according to the instructions in clause 126 to the real estate law
  • Transferred to your name the ownership or any other right on the apartment or on a proportional area in the plot

It is advised to consult a lawyer appointed by you to insure the investment

Payment according to progress on building when writing a warning note

According to clause 1 in the selling regulations (apartments), if the securities given to you are not a surety bond or an insurance policy, rather than the payment dates specified in the selling contract, the payment dates will be as defined in law and specified here:

  • 40% of the apartment price: As building of the first floor’s roof or celling is done. When the building doesn’t have a designated first floor, this payment includes the down payment paid when signing the contract.
  • 20% of the apartment price: As building of the frame of the floor in which the apartment will be built is completed, including partitions and excluding doorposts and water and electricity wiring.
  • 15% of the apartment price: As plastering the inside of the apartment is complete, as specified in the apartment specification.
  • 15% of the apartment price: As plastering the outside of the apartment is complete
  • 10% of the apartment price: As the apartment is delivered to the buyer according to the contract.
  • Remember! Failure to comply with these instructions is a federal offense.
  • If you were negatively affected in this matter, you are allowed to post a criminal complaint to the police.Payment in vouchers only
  • According to the amendment to the law from October 2008, in case the project is built with financial assistance from a bank all payments you pay for the apartment will be done with vouchers. The vouchers will be produced by the bank assisting the project and it will be given to the seller.
  • It will be clarified, that the said bank is a bank that accompanies the building process and not a mortgage bank from which you take a loan to fund the purchase of the apartment. The seller must give you the vouchers and use them exclusively to accept payments for the apartment.
  • Please note! Any payments in the project for financial accompaniment must only be done using the vouchers. You may contact the accompanying bank, of which contact details must appear on the vouchers, to make sure that the details on the vouchers match the details in the bank.
  • It is recommended to make this check before performing any payments.
  • Demand a receipt for every payment that details the entire sum and its details.

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