Globes, Eric Mirowski, 23.03.2020,

What does the Sales Law mean?

Adv. Avivit David from Zvi's Ministry Again: "The Sales Law (apartments) states that a delay in the delivery of an apartment will usually result in payment of compensation under certain conditions, but section 5A (c) provides for a certain exception when it is stated that the parties to the sale contract may agree that the compensation clauses do not apply to Delays caused by circumstances beyond the seller's control. In any case, it must be checked on the merits whether the parties did include the clause in the agreements, but even if the company still requesting to postpone the delivery of the apartment, it will be obligatory to prove that the corona events are events that meet the clause, that is, circumstances where the risk of occurring and their consequences are not on the contracting company.

"In practice, several entrepreneurial companies have already issued letters to apartment buyers on projects and warned that the time of delivery of the apartments will probably be delayed to purchasers in light of a shortage of manpower, raw materials for construction, employees of authorities required for the granting of permits and so on. Coming soon. "

Aviv David David / Photo: Kfir Sivan

What is a Supreme Power?

Attorney Elder Adato, Partner and Head of the Real Estate Department at Barnafee-Landa & Co.'s office: "One of the mechanisms established in the law is referred to as the Force Majeure, or in the professional language - Contract Counterterrorism. Section 18 of the Contracts Law (Medicines for Breach of Contract) states Because in the event that an event occurred that the parties to the contract could not anticipate or prevent in advance, their obligations under the contract will be suspended until the event ends or canceled (as the case may be), without any compensation.

"Many contracts include a clause that excludes the possibility of paying compensation in case the delay in delivery is caused by a non-controlling force. The contracts are usually drafted so that they are more widely deployed than the law and often include specific events (such as earthquakes, wars, etc.). The law does not have a definite definition of what is a force majeure event, and the interpretation of this is in accordance with the ruling. "

What does the ruling say?

Attorney Elder Addo: "The courts interpret the Article 18 of the Contracts Act very narrowly, and the courts and the law's starting point is that contracts should be in their own language and they will not allow the party to easily evade his obligations. For example, the Supreme Court rejected a lawsuit that canceled a contract due to the outbreak of the Yom Kippur War, which broke out by surprise, but because Israel is surrounded by enemies, the court has ruled that war is a predictable event in terms of contracts.

"Accordingly, at least as of now, entrepreneurs will have to prove that they have done everything possible to fulfill the contract and hand over the apartment at the agreed time. However, it may be because of the fact that as of today, the World Organization has recognized Corona as a global epidemic and because workers have been instructed to work from home and not Getting to work, as the spread of the corona is likely to get worse, the courts will tend to recognize the disease as a supreme power. "

Adv. Elder Adto / Photo: PR

Adv. Erez Sapir, Partner in the Real Estate Department at Naschitz Brandes Amir's office: "Definition of supreme power in entrepreneur / contractor agreements was discussed with quite a few judgments. One of the precedent judgments in the case was HRA 702/06 - Attorney General against Housing And development for Israel. An overriding clause in the judgment refers to a future event that is not controlled by the developer, and in order to reduce the clause of force majeure, an exception has been made for events whose risk to their occurrence and their consequences is either explicitly or implicitly or should have been taken reasonably. "

What are the arguments of the developers?

Adv. Erez Sapir: "An entrepreneur can rightly claim that he could not expect the spread of the virus, the implications of a virus outbreak, the restrictions imposed by the Ministry of Health (such as the isolation obligation or the closure imposed on the territories) and of course the extension of the guidelines every few days.

"In addition, the developer could raise a claim for a national shortage of construction workers - the shortage of foreign workers (due to the isolation obligation of foreigners permanently, from all states and the closure of the territories). This claim may be made especially in the agreements to which the state is party to the work order. Closure - It is not always agreed that this is a supreme power since an entrepreneur is not obliged to hire workers from the territories.

Attorneys Ziv Grumman and Asaf Levy of Grumman & Co.: "Higher clauses in most contracts speak of a national shortage of manpower or building materials. The question that will be examined is whether this is the case as a result of a shortage of materials coming from most of China and Europe, or manpower as a result of the closure of The territories and non-arrival work in Israel. In both cases, the clause in an agreement that applies to a supreme power comes into force and the developer can deliver apartments late without compensation. The thing is that the obligation of proof is on the developer, and once that clause is in the agreement, it is easier to prove it. "

Adv. Ziv Grumman / Photo: Sigal Saban, PR

What claims do tenants make?

Advocate Erez Sapir: "We also represent tenants, and on their part they will be asked to prove that the existing virus and restrictions have resulted in the actual cessation or slowdown in the field. In the past, in a robust cliff campaign for example, we have encountered quite a few entrepreneurs who claimed that it was a supreme force (military / war operation), but the tenants held videos from the site showing that the site was working normally at peak power. Of course, the tenants will seek to enforce the requirement that exists in most agreements, which states that the developer must warn about the consequences of such an event. "

What to do with contracts that are signed now?

Attorney Ziv Grumman and Assaf Levy: "In light of the catastrophic damages that can be caused by cases of commitments that are violated, on all sides, it is best not to leave room for doubt, interpretation and litigation that can cost a lot of money and take a long time. Therefore, it is worth mentioning explicitly in the agreement Because a rejection - indirectly or directly - from the epidemic will not put the late party on the duty of compensation.

"In the absence of a minister's order that states that the virus is a supreme power, we are going to see quite a few litigation on this issue. Therefore, we recommend inserting into every contract signed from here on a section related to Corona."

Adv. Avishai Sahar, a partner in the real estate department at Amit, Polk, Matalon & Co.: "The Supreme Court's rulings in Israel over the years have greatly reduced the applicability of counterterrorism (force majeure) in Israeli law, until it became a dead letter in the law book.

"Because of this, it is of special importance how Higher Power clauses are formulated in sales agreements between entrepreneurs and home buyers: The broader the definition, the greater the chance that events such as the spread of the corona virus will be recognized as the next events. "Including 'any cause or reason, which Entrepreneur has no control over or which is not his fault', would make it difficult for applicants to claim that the implications of the Corona are excluded from this definition."

What to do if I have already signed a contract?

Adv. Ziv Grumman and Asaf Levy: "For all the conditions that allow late delivery, during the project it is recommended to collect references and evidence based on any rejection created due to circumstances beyond the entrepreneur's control, including periodic instructions issued by the Ministry of Health, local authority notices, etc., And all so that in the moment of truth it is possible to prove the circumstances of the rejection. "

What happens in the case of second-hand apartment contracts?

Adv. Avivit David: "Since epidemics are not part of the world we know, in most cases parties to the agreement do not include viruses that disrupt the economy. Therefore, in cases where home buyers want to cancel agreements due to the situation created by the Corona epidemic, past experience seems that this will not be possible - cases such as the fall of the stock exchange or dismissal from the workplace are risks that are always at stake and should always be taken into account. Therefore, on the face of it, these do not appear to constitute a factor in which the purchaser can cancel his contractual obligations to the seller.

"However, in light of the good faith doctrine of contract law, and in light of the extreme and irregularity of the situation in the country due to the Corona virus, one can assume that every case will be examined on its merits. If a party finds it difficult to meet its pledge obligations, the court may consider it and may consider It is appropriate to interpret the agreement in such a way that the infringing party can meet its conditions.

"However, cancellation of the agreement would appear to be difficult to achieve unless the court deems it appropriate to deviate from its long-standing path and determine that the state in the country is so extreme due to the corona virus, in a manner that meets the strict conditions of the counterterrorism clause, and the infringing party indeed proves Which could not in any way meet the positive of the agreement due to an independent factor, which should not be expected and could not be prevented. "

The date of payment to the contractor is approaching and your mortgage is not yet approved

Adv. Noam Weiss, a partner and head of real estate in Eitan, with a glorious field: On the one hand, it greatly expedite the handling of its mortgage (even if the payment date is more than a month) and at the same time reach an understanding with the developer about the possible repayment of payment, and of course, even in such cases, the buyer will face a claim of "force majeure" and counterterrorism, as provided in section 18 of the contract law.

"And for those who have to pay the upcoming payment to the entrepreneur, the money is in his account, but can only be paid through the voucher, which can only be done in the bank branch (which is not currently active), it is worth preparing in advance and not waiting for the payment date. A meeting with the bankers can be arranged in most of the central branches Of the banks and make the payment by voucher there.