P'ninat Mishpat: Late and Flawed Apartment | Beit Din Eretz Hemda - Gazit | Beit Midrash

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Case: The plaintiffs (=pl) bought an apartment "on paper" from the defendant (=def), a building company. Def handed over the apartment to pl seven months late, and the handover protocol listed many flaws, to some of which def signed, and to others it objected. Def fixed some of the flaws; some pl had fixed; some remained unfixed. The sides dispute whether certain issues are flaws that def is obligated to remedy, and beit din used the sides’ contract and an expert to appraise the situation. [These are too detailed to survey here.] Def claims that it is not bound by the handover protocol, as many items it ostensibly agreed to fix were voluntary, and pl should be grateful it fixed most of them, and def is not bound to the remaining ones that are unnecessary. Def also argues that when something needs to be fixed, def has the right to do it, and that the charges pl presented are too high. Pl also claim that the penalty for late handover was underpaid. By law, there is a formula to calculate from the apartment’s value as a rental. Pl claims that def’s appraisal was done before the date it should have, so that it did not include the relevant appreciation, and that the appraisal related to a less desirable apartment. So, while def’s estimate was 7,000 NIS a month, pl claim 12,500 NIS. Def responded that it was not responsible for much of the delay, which was impacted by the Covid pandemic, and that pl did not lose from the level of compensation, as it covered the rent pl paid.

Ruling: A handover protocol is an official document used as standard procedure and is also mentioned in the contract. It is thus binding. The fact that def recorded disagreement on certain items also shows that when it signed on others, it admitted that they had merit. Therefore, def is unable to take back its acceptance unless it proves that it made an understandable mistake about something it agreed to.
Def is correct, based on Halacha, common practice, and the sides’ contract, that it has the right to do the necessary repairs itself. However, when long enough went by without def accepting responsibility and fixing it, pl had a right to have some of the work done and deserves compensation. [The details of which flaws and how much compensation are beyond this presentation.]
Regarding the payment for delay, the complaint of inaccuracies (time, type of apartment) that pl complain about have basis, but the alternative amount that pl presented is also inaccurate and is based on the high range of the market. One of the appraisers pl brought is unacceptable because of her interest in the matter, and another lacks professional qualifications. Beit din concludes that the basis for the calculation should have been 9,000 NIS a month. The claim that def was not responsible for the delay is unproven, and in any case, the apartment was due before the pandemic began. If def really believed it was exempt, it would not have paid. Even if pl did not lose from the delay, this is irrelevant because the payment for late handover is not a damage payment but based on agreement between the sides, mandate of the law, and it is found in the contract.