What to check in a developer contract when buying off-plan
What to check in a developer contract when buying off-plan
Buying off-plan means signing a contract for an apartment that exists only as drawings. The contract, its appendices and the security provided are therefore the buyer's main protection. Developers usually present a standard contract, but many terms can and should be negotiated. This guide walks through the parts of an off-plan contract that most affect the buyer and the questions worth raising before signing.
The specification and plans
The technical specification describes materials, finishes, systems and fittings, and the plans show the apartment and common areas. Together they define what the buyer is entitled to receive.
Vague descriptions, broad rights for the developer to change plans and missing details on parking, storage or balconies are common sources of dispute. Buyers should ask for precise wording and a clear procedure for changes.
Specification – materials, finishes and systems
Plans – apartment layout and common areas
Changes – what the developer may alter and how buyers are informed
Payment schedule structure
Payments are usually spread over the construction period, often with an initial payment and further instalments linked to progress. Many contracts link part of the price to a construction cost index.
Each payment should be secured under the Sale Law and, in accompanied projects, made only through the bank's payment vouchers. Buyers should understand how indexation affects the total they will pay.
Delivery date and delays
The contract sets a delivery date and often a grace period. Israeli law provides for compensation when delivery is delayed beyond set limits, and the contract should not reduce the buyer's statutory rights.
Buyers should check how the delivery date is defined, which events the developer claims as excusing delay and how compensation is calculated and paid. It is also worth asking what happens to the buyer's financing if delivery slips, because mortgage approvals and rental plans are often built around the original date.
Handover, defects and registration
At handover, the buyer inspects the apartment and records defects in a protocol. The law gives buyers periods during which the developer must repair defects, and an independent inspection can identify problems early.
The contract should also set out when and how the apartment will be registered in the buyer's name and what the buyer pays for the developer's legal fees.
Inspection – consider an independent engineer
Protocol – record every defect found
Registration – timeline for title in the buyer's name
Questions to ask and how we help
Before signing, visit other projects the developer has completed, speak to buyers there if possible, and ask who the accompanying bank is, what security each payment receives, what the developer's record on delivery is and which contract terms can be changed. A lawyer who represents only the buyer should review the full contract.
Elkayam Group works in development and provides guarantees for clients, and can help buyers understand the structure of a developer's offer and the protection behind it.
Frequently asked questions – buying off-plan
Can I negotiate the developer's standard contract
Often yes, especially on specification, changes, payment terms and delay provisions. A buyer's lawyer can identify which terms are open to negotiation.
What if the developer delivers late
The law provides for compensation for delays beyond certain limits. Check the contract carefully and keep records of the promised and actual dates.
Should I hire an engineer for handover
It is advisable. An engineer can identify defects that a buyer might miss and helps create a clear record for repairs.
Why Elkayam Group
The group works in development, urban renewal, combination deals and complex deals, cooperates with backing companies and provides guarantees for clients. The team works in Hebrew, English and French.
Contact: +972-53-658-4252 · support@kobielkayamrealestateltd.com · Rival St 37, Tel Aviv