Buyers who cancelled an Ashkelon property deal ordered to pay 200,000 shekels
A Canadian resident selling an apartment in Ashkelon was unable to complete registration in time due to delays by the construction company. The buyers unilaterally cancelled the contract, but the court ruled they were in breach and ordered them to pay 200,000 shekels in compensation.
They demanded compensation for breach of contract – and will pay it themselves: The Magistrate's Court in Ashkelon recently ruled that a couple who cancelled a deal to purchase an apartment in the city, claiming the seller did not meet the terms of the contract, will pay him about 200,000 shekels. Judge Ido Kafkafi found that the seller had actually done everything in his power to meet the conditions, so he cannot be seen as a violator, unlike the buyers due to their unilateral action.
About two years ago, the parties entered into an agreement to purchase the apartment on HaTayasim Street for 1.82 million shekels. At the time of signing, the property was not yet registered in the seller's name, and he committed in the contract to complete the process of registering his rights within 120 days, "provided that the delay in registration is not dependent on him."
However, the registration was not completed on time, and the buyers announced the cancellation of the deal. According to their attorney, this was done only after ten months had passed from the day the contract was signed. In the lawsuit they filed, they sought to receive the contractual compensation, at a rate of 10% of the property price, claiming that the seller committed a fundamental breach of the agreement. The seller, a Canadian resident, argued that he did everything in his power to advance the registration from his place of residence, so it was a failure resulting from circumstances beyond his control.
Judge Kafkafi ruled that the seller acted and tried to advance the registration, but due to circumstances beyond his control, he did not succeed. The verdict stated:
"It appears that there is no absolute obligation, as arises from the buyers' arguments, that within 120 days from the sale the registration of rights in the seller's name will be completed. It is a softer obligation, and if the buyers wanted to ensure an absolute right to cancel the agreement after 120 days, they should have formulated a condition subsequent for the agreement."
The judge found that the main cause of the delay was the procrastination of the construction company. Therefore, it was determined that it was the buyers who breached the agreement when they announced the cancellation without authorization. The court ordered them to pay the seller the agreed compensation for a fundamental breach of 182,000 shekels, plus legal expenses and attorney's fees in the amount of 20,000 shekels.
