Obligation to Enable Registering a Purchase – part I | Various Rabbis | Beit Midrash

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P'ninat Mishpat

קטגוריה משנית

The plaintiffs (=pl) bought an apartment from the defendants (=def) in a project that is handled by a chevra meshakenet (= cm; developers who bought rights to the buildings from the government and are responsible for registering the changes in ownership). Pl paid and moved in a few years ago, but def has been unwilling to sign a form requested by cm, which states that the sellers have no further claims against cm regarding the apartment. Due to this, cm has refused to register the apartment in pl’s name. In the first hearing, def said they want to sue pl for the damages of delaying payment and informing the authorities of the sale too early. They implied that if paid for damages, they would sign the form. In the second hearing, def claimed that signing the form will damage them, but they failed to coherently explain what the damage the nature and source of the damage. Pl claim that def is required to sign any document needed for transferring ownership, according to par. 7.1 of their contract. The form in question is a standard one, def have never explained their refusal to sign, and it does not make sense that they should have any claims regarding an apartment that they sold years ago. Def say that there is no legal obligation to sign documents that cm presents without justification and now claim that they are part of litigation against cm that has not been resolved. Pl points out that the contract states that there are no outstanding legal matters with the apartment. Def did not follow up after the hearing with documentation about the litigation, as requested. Pl demands 3,000 shekels per day that def refuse to sign the form.

Based on ruling 76084 of the Eretz Hemdah-Gazit Rabbinical Courts

Case: The plaintiffs (=pl) bought an apartment from the defendants (=def) in a project that is handled by a chevra meshakenet (= cm; developers who bought rights to the buildings from the government and are responsible for registering the changes in ownership). Pl paid and moved in a few years ago, but def has been unwilling to sign a form requested by cm, which states that the sellers have no further claims against cm regarding the apartment. Due to this, cm has refused to register the apartment in pl’s name. In the first hearing, def said they want to sue pl for the damages of delaying payment and informing the authorities of the sale too early. They implied that if paid for damages, they would sign the form. In the second hearing, def claimed that signing the form will damage them, but they failed to coherently explain what the damage the nature and source of the damage. Pl claim that def is required to sign any document needed for transferring ownership, according to par. 7.1 of their contract. The form in question is a standard one, def have never explained their refusal to sign, and it does not make sense that they should have any claims regarding an apartment that they sold years ago. Def say that there is no legal obligation to sign documents that cm presents without justification and now claim that they are part of litigation against cm that has not been resolved. Pl points out that the contract states that there are no outstanding legal matters with the apartment. Def did not follow up after the hearing with documentation about the litigation, as requested. Pl demands 3,000 shekels per day that def refuse to sign the form.

P'ninat Mishpat (777)

Various Rabbis

471 - Lack of Participation

472 - Obligation to Enable Registering a Purchase – part I

473 - Obligation to Enable Registering a Purchase – part II

Ruling: The first question to check is whether pl completed the acquisition of ownership of the apartment. The contract states that def are required to transfer rights (par. 2.1) and practical control (par. 2.2) of the apartment to pl. However, the contract does not state at what point this occurs.

There is also a known machloket whether a purchase can be final before ownership was recorded in the Land Registry, which did not occur here. Rav S.Z. Auerbach (Ma'adanei Eretz, Shviit 18:2) states that even if the by-laws of cm state that a purchase is not binding until it is accepted by cm, that applies to cm’s obligation to recognize the sale. However, from the perspective of the seller, his ability to back out can end before cm recognizes the sale, while the buyer can still back out if he is not able to get cm to recognize the purchase.

In this case, since pl have finished paying for the apartment and have been living in the apartment with permission of def and cm, their acquisition is complete.

Next time, we will continue with other elements of the dispute.

P'ninat Mishpat