Problems Arising from the Sale of Stores in New Project – part I | Beit Din Eretz Hemda - Gazit | Beit Midrash

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Case: The plaintiff (=pl) bought two stores in a new project, developed by the defendant (=def), which was at the time mostly built. Pl claims that def’s representative told him that the stores would be ready within weeks, but it took well over a year to get them. Pl demands 265,500 NIS based on the Law of Sales, which spells out a high payment scale for a seller’s lateness in handing over real estate. Def counters that the delay was caused mainly by the municipality’s delay in finishing the utilities’ infrastructure. Additionally, according to the sides’ contract, the stores were given to pl before the binding date of availability. Pl also sued def for stopping his workers from making changes to the stores after def gave him keys. Def responded that they had the right to do so because pl had not yet finished paying.

Ruling: Lateness – Pl presented strong proof, based on his actions soon after signing the contract, that he understood from def’s sales agents that he would receive the stores soon after signing. He also cited a reference in the contract to a large payment that must be made 30 days prior to the date of availability, no earlier than 1.3.2017. Pl claims that this shows that this was the approximate target date. Def pointed out clauses that set the date as the later between 24 months from the time of a building permit and 28 months from the signing of pl’s contract, which was much later. Pl explains that the reason for this late date is that most of the buyers bought much earlier, before the building was underway, and the clause about time from the signing of the contract does not apply to him, who bought later and was orally promised imminent availability. Pl also argues that he signed the contract without having it reviewed by a lawyer.

Ruling - We follow written contracts over oral assurances and the buyer’s intentions. This is a general halachic rule (see Eretz Hemda ruling 78005-2). Even if we were to accept that there was an oral commitment, it is possible that it was preliminary and superseded by the contract. Also, a clause in the contract states explicitly that only the written contract is binding. There is no proof from the payment schedule because it dealt with payment alone, not the obligation to make it available. Pl was also not specific regarding who had made a commitment to him, and thus even if there was a commitment, it might not have been authorized. Therefore, there is no payment for lateness.

Stopping the workers – A significant representative of def, who gave pl the keys, confirmed that he had, on a basic level, given pl, who had paid almost all of the selling price, permission to work on the stores. Therefore, pl had every right to assume that he could bring workers. Even if def had the power to stop the work, they have to compensate pl for the money he wasted relying on the initial assurance (see Rama, Choshen Mishpat 14:5). However, pl did not sufficiently document how much money had been lost based on this misinformation. Based on compromise, we obligated def to compensate pl 2,000 NIS for this.