Key Takeaways
- Two related statutes: Sale Law (Apartments) 1973 governs the apartment sale itself; Sale Law (Apartments) (Assurance of Investments) 1974 requires Arvut Bankit or equivalent protection on buyer payments.
- Statutory grace period for late delivery: 60 days. After day 61, the developer owes the buyer monthly compensation tied to local rental value.
- Compensation: approximately 1.5x market rent for the first 8 months of delay, 1.25x from month 9 onward. On a ₪6,000-equivalent rent, 6 months of delay produces approximately ₪54,000 in compensation.
- Defect warranty under Chok HaMecher: 1 year for finish-quality defects, 3 to 7 years for structural defects depending on category. The developer remains liable.
Short Answer
Chok HaMecher is the umbrella term for Israel's Sale Law of Apartments 1973 and its companion the Sale Law (Apartments) (Assurance of Investments) 1974. The two statutes together govern every aspect of an off-plan residential apartment sale: the developer's delivery obligations, buyer payment protection via Arvut Bankit, late-delivery compensation paid to the buyer, and a multi-year defect warranty the developer owes after delivery.
Full Definition
The Sale Law (Apartments) 1973 (Chok HaMecher (Dirot) 5733-1973) requires every developer selling a new residential apartment to deliver a written specification (mifrat) describing the apartment, the building, the common areas, the finishes, and the delivery date. The specification becomes part of the contract by operation of law, regardless of whether it is referenced in the signed contract. The Sale Law (Apartments) (Assurance of Investments) 1974 (Chok HaMecher (Dirot) (Havtachat Hashkaot)) requires every developer accepting buyer payments before delivery to secure those payments via Arvut Bankit, Polisat Bituach, or an approved alternative mechanism, in the buyer's name personally. Both statutes operate alongside the Standard Contracts Law 1982 (Chok HaChozim HaAchidim), which voids unfair clauses in developer-drafted contracts even where the buyer signed. The combined effect is to shift the buyer-developer power balance toward the buyer more decisively than in most equivalent developed-market regimes. Israeli courts interpret Chok HaMecher strictly against the developer, and the standard remedies for breach (statutory compensation, contract rescission with refund, specific performance) are routinely available.
Why It Matters for Foreign Buyers
Foreign buyers should understand that Israeli off-plan buyer protection under Chok HaMecher is structurally stronger than in most other developed markets. Three practical consequences. First, every off-plan apartment contract carries the statutory mifrat (specification) by operation of law, even if the contract is silent or ambiguous; the developer cannot deliver an apartment materially different from the specification without buyer-side remedies. Second, late delivery is automatic compensation territory. The developer has a 60-day statutory grace period, then owes the buyer 1.5x market rent for months 1 through 8 of delay and 1.25x from month 9 onward, regardless of fault. Third, the defect warranty travels with the apartment under Israeli law: 1 year for finish-quality defects, 3 to 7 years for structural defects depending on category. Israeli counsel will routinely invoke Chok HaMecher remedies on the foreign buyer's behalf if the developer fails to perform; the structural protection is meaningful and reliably enforced.
Related Reading
- Arvut Bankit (bank guarantee)
- Livui Bankai (bank-supervised financing)
- Off-Plan vs Resale: the framework
Sources and References
- Sale Law (Apartments) 1973 (Chok HaMecher (Dirot))
- Sale Law (Apartments) (Assurance of Investments) 1974
- Standard Contracts Law 1982 (Chok HaChozim HaAchidim)
Reviewed by Hershtik & Adoram, May 2026. This glossary entry is informational and does not constitute legal or tax advice for any specific transaction. Israeli real estate law evolves; verify current rules with qualified Israeli counsel before relying on any specific figure or rule.