Israeli Legislation.com
LawReal Estate & Land

Sale (Apartments) (Assurance of Investments of Apartment Purchasers) Law, 5735-1974

חוק המכר (דירות) (הבטחת השקעות של רוכשי דירות), תשל"ה-1974

Published: 1974-11-28Consolidated Hebrew text as of 2026-04-01 · Last amended 2026-03-31✓ Amendment status checked against the Knesset legislation record on 2026-09-29
Premium
Unofficial English translation — for reference only. It may contain errors or omissions and cannot be relied on as a legal text. Only the Hebrew text published in Reshumot is legally binding.More

This English text was translated from the official Hebrew using a range of translation tools, and it undergoes ongoing checks and updates. It is not a certified translation.

Despite these checks, it may contain errors, omissions, or imprecise renderings of legal terminology and cross-references, and it may not yet reflect the latest amendments. It cannot be relied upon as a legal text.

The Hebrew text as published in Reshumot (ספר החוקים) and on the Knesset website is the sole authoritative and legally binding version. In any discrepancy, the Hebrew text prevails.

This translation is provided for informational purposes only and does not constitute legal advice. For use in legal proceedings, request a certified Expert Legal Opinion.

Definitions§

1.

In this Law –

"apartment" – a room or suite of rooms for residential, business or any other purpose, including certain parts of the common property attached thereto as referred to in section 55(c) of the Land Law, 5729-1969;

"loan for the purchase of an apartment" – a loan granted by a banking corporation, insurer or other corporation for the purpose of purchasing an apartment, and for the assurance of the repayment of which a mortgage or pledge has been registered in respect of the rights in the real property;

"Insurance Supervision Law" – the Supervision of Financial Services (Insurance) Law, 5741-1981;

"financial accompaniment" – financing of a construction project by a banking corporation or by an insurer within the framework of an accompaniment agreement between the vendor and the banking corporation or the insurer;

"insurer" – as defined in the Insurance Supervision Law;

"sale" – including a lease for a period exceeding twenty-five years, including an undertaking to sell or to grant a long-term lease as aforesaid or to cause a sale or the granting of a long-term lease as aforesaid, and including an action in an association as its meaning in the Real Estate Appreciation Tax Law, 5723-1963;

"vendor" – a person who sells an apartment that he built or is to build himself or through another person, on land belonging to him or to another, for the purpose of selling it, including a person who sells an apartment that he purchased for the purpose of selling it from a person who built or is to build it as aforesaid, except for a vendor of an apartment that he did not build himself and for the sale of which he received no consideration from the purchaser;

"price of the apartment" – any sum that the purchaser undertook to pay the vendor under the contract of sale in connection with the purchase of the apartment;

"Commissioner" – a person appointed pursuant to the provisions of section 3d as Commissioner for the purposes of this Law;

"Commissioner of Capital Markets" – the Commissioner as defined in the Insurance Supervision Law;

"Supervisor of Banks" and "proper banking management directives" – as their meaning in section 5 of the Banking Ordinance, 1941 (hereinafter – the Banking Ordinance);

"financing of a construction project" – a method of financing under which the vendor conducts all of the financial activity of his construction project in a single separate bank account serving this purpose only (hereinafter – the accompaniment account);

"construction project" – the construction of an apartment or a building by a vendor;

"banking corporation" – as defined in the Banking (Licensing) Law, 5741-1981;

"accompanying corporation" – a banking corporation or insurer, as the case may be, that provides financial accompaniment;

"the Minister" – the Minister of Construction and Housing.

Assurance of the Purchaser's Monies§

2.

A vendor shall not receive from a purchaser, on account of the price of the apartment, an amount exceeding seven per cent of the price, unless the vendor has done one of the following, and all of this notwithstanding anything stated in the contract of sale:

(1)delivered to the purchaser a bank guarantee to assure the return of all monies paid to the vendor by the purchaser on account of the price, excluding the VAT component, as defined in section 3c1, included in those monies, in the event that the vendor is unable to transfer to the purchaser ownership or another right in the apartment as agreed in the contract of sale, by reason of an attachment levied on the apartment or on the land on which it is being built, or by reason of a stay of proceedings order, a receiving order, a winding-up order or an order for the appointment of a receiver issued against the vendor or against the owner of said land, or by reason of circumstances in which an absolute impediment arose to delivering possession of the apartment; however, the cancellation of the contract of sale as such shall not constitute an absolute impediment for this purpose; the Minister, with the consent of the Supervisor of Banks, may prescribe for this purpose the form of the bank guarantee;
(2)insured himself with an insurer approved for this purpose by the Commissioner of Capital Markets, to assure the return of all monies paid to the vendor by the purchaser on account of the price, excluding the VAT component, as defined in section 3c1, included in those monies, upon the occurrence of the circumstances referred to in paragraph (1), and the purchaser was named as beneficiary under the insurance policy and the insurance premiums were paid in advance; the Minister of Finance may prescribe for this purpose the form of the insurance policy;
(3)charged the apartment, or a proportionate part of the land on which it is being built, with a first mortgage in favour of the purchaser or in favour of a trust company approved for this purpose by the Minister, to assure the return of all monies paid to the vendor by the purchaser on account of the price, upon the occurrence of the circumstances referred to in paragraph (1);
(4)registered in respect of the apartment, or in respect of a proportionate part of the land on which it is being built, a cautionary note regarding the sale of the apartment in accordance with the provisions of section 126 of the Land Law, 5729-1969, provided that no charge (security interest), attachment or right of a third party having priority over the cautionary note has been registered in respect thereof;
(5)transferred to the purchaser's name ownership or another right in the apartment, or in a proportionate part of the land on which it is being built, as agreed in the contract of sale, with the apartment or the land being free from any charge (security interest), attachment or right of a third party.

Substitution of Security§

2a.

A vendor who has assured the purchaser's monies pursuant to section 2(1) or (2) shall be entitled to substitute the security with one of the modes of security under section 2(3), (4) or (5), provided that construction of the apartment has been completed and possession thereof has been delivered to the purchaser, and all of this if the contract of sale does not stipulate that the vendor is not entitled to substitute the security; nothing in the provisions of this section shall derogate from the provisions of section 3.

Duty of Written Notification§

2a1.
(a)A vendor shall not sell an apartment to a purchaser unless the vendor has notified the purchaser in writing, at the time of signing the contract of sale, of the purchaser's right under this Law to the assurance of monies paid and of the modes prescribed under the Law for this purpose.
(b)A vendor who has not entered into an agreement with a banking corporation or insurer for the provision of financial accompaniment shall notify the purchaser thereof in writing by the time of signing the contract of sale; the Minister may prescribe provisions regarding the manner and time of delivery of the notification.

Assurance of Monies of a Purchaser of an Apartment on Israel Lands§

2b.
(a)Where the land on which the apartment being sold is situated is Israel Lands as their meaning in Basic Law: Israel Lands, the vendor shall not be obligated to assure the purchaser's monies pursuant to section 2 except for a period that shall end upon the fulfilment of all of the following:
(1)construction of the apartment has been completed in accordance with the contract of sale;
(2)possession of the apartment has been delivered to the purchaser;
(3)a contract has been signed between the purchaser and the Israel Land Authority (hereinafter – the Authority) in which the Authority undertook to bring about the registration of the purchaser as lessee of the apartment for a period exceeding twenty-five years, free from any charge (security interest) or undertaking to create a charge (security interest), from any attachment, and from any right of a third party, except for a charge (security interest) or undertaking to create a charge (security interest) for the liability of the purchaser.
(b)A contract signed between the purchaser and the Authority as referred to in paragraph (3) of subsection (a), between the 21st day of Shevat 5735 (2 February 1975) and the 2nd day of Nisan 5739 (30 March 1979), shall be deemed to include the undertaking of the Authority as referred to in paragraph (3) aforesaid.
(c)Where the Authority has been ordered to compensate the purchaser for non-fulfilment of its undertakings under paragraph (3) of subsection (a), the vendor shall indemnify the Authority, unless the vendor proves that the Authority is responsible for the cause of action for compensation.

Notice Regarding Cancellation of Registration of a Charge (Security Interest)§

2c.
(a)In this section –

"banking corporation" – a banking corporation that has furnished a bank guarantee as referred to in section 2(1), whether it is an accompanying corporation or not;

"insurer" – an insurer that has furnished an insurance policy as referred to in section 2(2), whether it is an accompanying corporation or not.

(b)A vendor shall apply in writing to the banking corporation or to the insurer, as the case may be, with a demand that it furnish a written notice, in the form set out in the Schedule, to the effect that a charge (security interest) or an undertaking to create a charge (security interest) given in favour of the banking corporation or the insurer shall not be realised from the apartment and its registration shall be cancelled, in accordance with the conditions stated in the notice (in this section – the notice); such application shall be made within 30 days of one of the following:
(1)the date of the first payment made by a purchaser by means of a payment booklet, if the bank guarantee or insurance policy was issued by a banking corporation or insurer that is an accompanying corporation;
(2)the date of the issuance of the first bank guarantee, if it was issued by a banking corporation that is not an accompanying corporation;
(3)the date of the issuance of the insurance policy by an insurer that is not an accompanying corporation.
(c)Where the vendor has applied to the banking corporation or to the insurer as referred to in subsection (b), the banking corporation or insurer shall deliver the notice to the vendor within 30 days of the date of the vendor's application; upon applying to the banking corporation or to the insurer, the vendor shall notify the purchaser thereof, and upon receipt of the notice from the banking corporation or insurer the vendor shall transmit it to the purchaser.

Restriction on Payments§

3.

Notwithstanding anything stated in the contract of sale, a vendor shall not receive from a purchaser payments of monies on account of the price of the apartment at rates exceeding the rates prescribed by the Minister in Regulations, unless those monies have been assured as referred to in section 2(1) or (2).

Payment of Expenses by the Vendor§

3a.
(a)All commission payments and expenses connected with the assurance of the purchaser's monies under this Law (hereinafter – the expenses) shall be borne by the vendor.
(b)The provisions of subsection (a) shall not apply if, under the contract of sale, the vendor is to pay the expenses on behalf of the purchaser, and the insurer or the provider of the bank guarantee, as the case may be, has issued a receipt in the name of the purchaser.

Linkage Differentials§

3a1.

Monies assured as referred to in section 2(1) or (2) shall be linked in accordance with the method of linkage agreed upon in the contract of sale in respect of the price of the apartment; where no method of linkage as aforesaid has been stipulated in the contract of sale, the assured monies shall be linked to the construction inputs index published by the Central Bureau of Statistics, from the index last published before their payment by the purchaser until the index last published before their return to the purchaser in any of the cases set out in section 2(1).

Financial Accompaniment of a Construction Project§

3b.
(a)An accompanying corporation and a vendor that have entered into an agreement for the provision of financial accompaniment shall act only in that manner in respect of the construction project that is the subject of the agreement.
(b)The accompaniment agreement for a construction project between the accompanying corporation and the vendor shall include their obligation to act pursuant to the payment booklet arrangement only, in accordance with the provisions of this section, as well as additional particulars as shall be determined by the Supervisor of Banks in proper banking management directives – in respect of an accompanying corporation that is a banking corporation, or as shall be determined by the Commissioner of Capital Markets in directives pursuant to section 2(b) of the Insurance Supervision Law – in respect of an accompanying corporation that is an insurer.
(c)The accompanying corporation shall produce a payment booklet for payment in respect of each apartment in the construction project, shall deliver it to the vendor, and shall deposit payments in respect of the apartment, including payments transferred by a corporation that has granted the purchaser a loan for the purchase of an apartment, into the accompaniment account by means of the payment booklet only; the payment slips shall include particulars as shall be determined by the Supervisor of Banks or the Commissioner of Capital Markets in directives as referred to in subsection (b).
(d)The vendor shall deliver the payment booklet to the purchaser and shall receive by means thereof only the payments to be made by the purchaser in respect of the apartment; payment by means of a payment slip constitutes an irrevocable instruction by the vendor to the accompanying corporation to furnish a bank guarantee as referred to in section 2(1) or an insurance policy as referred to in section 2(2), in favour of the purchaser.
(e)An accompanying corporation shall furnish a bank guarantee or insurance policy in respect of the amount paid by the purchaser pursuant to the payment booklet arrangement, excluding the VAT component as defined in section 3c1 included in those monies, within 14 business days from the date of such payment, or shall ensure that another security has been provided in favour of the purchaser in accordance with the provisions of section 2; nothing in this provision shall derogate from the liability of a banking corporation or insurer under any law.

Obligation of a Corporation that Has Granted a Loan for the Purchase of an Apartment§

3c.

Where a banking corporation, insurer or other corporation has granted a purchaser a loan for the purchase of an apartment, it is obligated –

(1)to notify the purchaser in writing of the provisions of this Law and of the purchaser's rights to the assurance of monies paid to the vendor in respect of the apartment;
(2)to transfer the loan monies to the vendor only after having verified that a security has been provided in favour of the purchaser in accordance with the provisions of section 2, or a written undertaking by the vendor to provide a security as aforesaid.

First Charge (Security Interest) over the Vendor's Right to Receive a Refund of the VAT Component§

3c1.

Where a vendor has provided a security as referred to in section 2(1) or (2), the vendor's right to receive a refund of the VAT component paid, in the event of realisation of the security, shall be subject to a first charge (security interest) in favour of the State; for this purpose, "VAT component" – the value added tax included in the price of the apartment at the rate applicable pursuant to the Value Added Tax Law, 5736-1975, at the time of each payment from the purchaser to the vendor.

Return of the VAT Component upon Realisation of a Security§

3c2.
(a)In this section –

"security" – a bank guarantee or insurance policy as referred to in section 2(1) or (2);

"VAT component" – as defined in section 3c1;

"the Fund" – the fund established pursuant to subsection (c).

(b)Where a security has been realised in the circumstances referred to in section 2(1) or (2), the Fund shall return to the purchaser, by means of the banking corporation or insurer that furnished the security, an amount equal to the VAT component in respect of each payment from the purchaser to the vendor for which the security was given, with the addition of linkage differentials as referred to in section 3a1 on the monies assured as referred to in section 2(1) or (2), in accordance with these provisions:
(1)the banking corporation or insurer shall apply, no later than seven days from the date of realisation, with a request to receive from the Fund an amount equal to the VAT component;
(2)within 14 days of the application by the banking corporation or insurer as referred to in paragraph (1), the amount equal to the VAT component shall be transferred from the Fund to the banking corporation or insurer;
(3)upon receipt of the amount equal to the VAT component from the Fund, the banking corporation or insurer shall transfer it to the purchaser.
(c)The Accountant General of the Ministry of Finance shall establish, within the Ministry of Finance, a fund whose purpose is the return of amounts equal to the VAT component to purchasers upon the realisation of securities, in accordance with the provisions of this section; a notice regarding the establishment of the Fund shall be published in Reshumot (Official Gazette).
(d)The Accountant General, with the consent of the Supervisor of Banks and the Commissioner of Capital Markets, shall enact the regulations of the Fund; the regulations as aforesaid shall include, inter alia, provisions regarding the operations of the Fund, procedures for submitting applications to the Fund and their processing, and the working procedures of the Fund; the regulations of the Fund shall be published on the website of the Ministry of Finance.

Appointment of Commissioner, Maintenance of Registry and Investigation of Public Inquiries§

3d.
(a)The Minister shall appoint a Commissioner from among the employees of the Minister's office, for the purposes of apartments to the sale of which the provisions of this Law apply.
(b)The Commissioner shall maintain a registry in which the following shall be detailed: the name of the apartment purchaser, the name of the vendor, the particulars of the real property, the provider of the security and the type of security provided in favour of the purchaser in accordance with the provisions of section 2.
(c)
(1)Subject to the provisions of subsection (d), the Commissioner shall investigate public inquiries in respect of this Law, including in respect of the violation of the provisions of the Law by a vendor;
(2)where the Commissioner finds that a public inquiry was justified, the Commissioner shall notify the applicant and the vendor thereof; the Commissioner shall detail in the notice the findings of the investigation and the ways to rectify the deficiencies found (hereinafter – investigation findings);
(3)where the Commissioner finds that a public inquiry was not justified or that it does not warrant investigation, the Commissioner shall notify the applicant thereof;
(4)the Commissioner's decisions in the investigation of a public inquiry and the investigation findings –
(a)shall not confer on the applicant or on any other person a right or remedy in a court or tribunal that they did not have previously;
(b)shall not prevent the applicant or any other person from exercising another right or seeking another remedy to which they are entitled; however, if a time limit has been set therefor in legislation, the time limit shall not be extended by the submission of the inquiry to the Commissioner or its investigation.
(d)Where the Commissioner has received a public inquiry in a matter concerning a banking corporation, the Commissioner shall refer it for investigation to the Supervisor of Banks; the Supervisor shall investigate the inquiry pursuant to the provisions of section 16 of the Banking (Customer Service) Law, 5741-1981, and if the Supervisor finds that it was justified, the Supervisor shall notify the applicant, the banking corporation and also the Commissioner thereof; notwithstanding the provisions of said section, the Supervisor shall detail in the notice as aforesaid the investigation findings and the ways to rectify the deficiencies found.
(e)Where the Commissioner has received a public inquiry in a matter concerning an insurer, the Commissioner shall refer it for investigation to the Commissioner of Capital Markets; the Commissioner of Capital Markets shall investigate the inquiry pursuant to the provisions of sections 60 to 62 of the Insurance Supervision Law, and if the Commissioner of Capital Markets finds that it was justified, the Commissioner of Capital Markets shall notify the applicant, the insurer and also the Commissioner thereof; the Commissioner of Capital Markets shall detail in the notice as aforesaid the investigation findings and the ways to rectify the deficiencies found.

Vendor's Duty of Reporting to the Commissioner§

3e.
(a)A vendor shall deliver to the Commissioner the following particulars in respect of the sale of each apartment in the vendor's construction project: the name of the apartment purchaser, the name of the vendor, the particulars of the real property, the provider of the security and the type of security provided in favour of the purchaser in accordance with the provisions of section 2.
(b)The Minister shall prescribe in Regulations the time for delivering the particulars as referred to in subsection (a), and may in Regulations as aforesaid prescribe additional particulars that the vendor is to deliver to the Commissioner.

Supervisory Powers§

3f.

For the purpose of fulfilling the Commissioner's functions, the Commissioner may –

(1)require any person or body concerned to provide information and documents relating to the sale of apartments pursuant to this Law;
(2)enter a place used by a vendor and carry out an inspection of compliance with the provisions pursuant to this Law, provided that the Commissioner shall not enter a place used solely for residential purposes except pursuant to an Order of a court.

Commissioner's Powers in Respect of a Vendor or Offending Corporation§

3g.
(a)Where the Commissioner finds that a vendor has breached the vendor's obligation to assure the purchasers' monies as required under this Law, the Commissioner shall warn the vendor thereof in writing, and shall notify the purchaser and the Supervisor of Banks or the Commissioner of Capital Markets, as the case may be, thereof.
(b)Where the Commissioner finds that a corporation that is not a banking corporation or insurer that has granted a loan for the purchase of an apartment has breached its obligations under section 3c, the Commissioner shall have the powers vested in the Supervisor of Banks and the Commissioner of Capital Markets pursuant to section 3h.

Powers of the Supervisor of Banks and the Commissioner of Capital Markets in Respect of a Banking Corporation or Insurer that Has Breached its Obligations§

3h.

Where the Supervisor of Banks or the Commissioner of Capital Markets finds that a banking corporation or insurer, as the case may be, that is an accompanying corporation has breached its obligations pursuant to section 3b, or that a banking corporation or insurer, as the case may be, that has granted a purchaser a loan for the purchase of an apartment has breached its obligations pursuant to section 3c, the Supervisor or Commissioner, without derogating from the powers vested in them under any law, may instruct the banking corporation or insurer to rectify the breach, and may also instruct on the ways to rectify it, as the Supervisor or Commissioner sees fit.

Annual Report by the Commissioner§

3i.
(a)The Commissioner shall submit to the Minister and to the Finance Committee of the Knesset, once a year, a report on the Commissioner's activities, on the implementation of the provisions pursuant to this Law and also a report on the investigation findings, including the investigation findings transmitted to the Commissioner by the Supervisor of Banks or the Commissioner of Capital Markets; the report shall also detail the names of vendors who have violated the provisions pursuant to this Law.
(b)Without derogating from the provisions of any law, a report as referred to in subsection (a) shall be open for public inspection at the offices of the Commissioner or in any other manner prescribed by the Minister.

Penalties§

4.
(a)A person who does any of the following shall be liable to a fine as referred to in section 61(a)(3) of the Penal Law, 5737-1977 (hereinafter – the Penal Law):
(1)failed to notify the purchaser of his right under this Law to the assurance of the monies he paid, contrary to the provisions of section 2a1;
(1a)received payments of monies from a purchaser on account of the price of the apartment, without the monies having been assured in accordance with the provisions of section 3;
(2)failed to report to the Commissioner the particulars of sale transactions, contrary to the provisions of section 3e.
(b)A person who does any of the following shall be liable to one year's imprisonment or double the fine prescribed in section 61(a)(4) of the Penal Law:
(1)received on account of the price of the apartment a sum exceeding seven percent of the price without the monies having been assured in accordance with the provisions of section 2;
(2)failed to deliver to the purchaser the payment book or received payments otherwise than by means of the payment book, contrary to the provisions of section 3b(d).
(c)A person who does any of the following shall be liable to double the fine prescribed in section 61(a)(4) of the Penal Law:
(1)failed to produce a payment book or failed to deposit the payments by means of the payment book in the accompaniment account, contrary to the provisions of section 3b(c);
(2)failed to furnish a bank guarantee or insurance policy or failed to verify that another security was provided, contrary to the provisions of section 3b(e);
(3)failed to notify the purchaser of his rights to the assurance of the monies paid to the vendor or failed to verify that a security was provided to the purchaser or a written undertaking of the vendor, contrary to the provisions of section 3c.
(d)Where a vendor has been convicted of an offence under subsections (a) or (b), the court may disqualify him from participating in tenders under the Mandatory Tenders Law, 5752-1992, conducted by the State or a governmental corporation as defined in that Law, for a period not exceeding five years.
(e)Where a vendor who is a contractor for civil engineering works, as their meaning in the Contractors Registration for Civil Engineering Works Law, 5729-1969 (in this Law – the Contractors Registration Law), has been convicted of an offence under subsections (a) or (b), the court may disqualify him from registration in the register, and if registered – may cancel his registration, all for a period to be determined by the court.

Liability of an Office Holder in a Corporation§

4a.
(a)An office holder in a corporation is obliged to supervise and do all that is possible to prevent offences under section 4(a) or (b) by the corporation or by any of its employees; a person who contravenes this provision shall be liable to half the fine referred to in section 4(a) or (b), as the case may be; in this section, "office holder" – an active director in a corporation and a partner, except for a limited partner, or an officer on behalf of the corporation responsible for the field in which the offence was committed.
(b)Where a corporation has been convicted of an offence under section 4(a) or (b), it is presumed that an office holder in the corporation contravened his duty under that section, unless he proved that he did all that was possible to fulfil his duty.

Imposition of a financial penalty§

4b.
(a)For a breach of the following provisions by a vendor or a corporation, the Commissioner shall impose on the vendor or on the corporation, as the case may be, a financial penalty in accordance with the provisions of sections 4c to 4m in the amount specified below, as the case may be:
(1)failure by the vendor to report to the Commissioner information regarding the sale of an apartment, contrary to the provisions of section 3e – a financial penalty of NIS 33,010;
(2)sale of an apartment to a purchaser by the vendor without giving the purchaser written notice of his right under this Law, contrary to the provision of section 2a1 – a financial penalty of NIS 66,010;
(3)failure to notify a purchaser of his rights to assurance of the monies paid to the vendor, or failure to ensure that a security was given in favour of the purchaser or that a written undertaking of the vendor to provide a security was given, contrary to the provisions of section 3c – a financial penalty of NIS 66,010;
(4)failure to deliver a payment booklet from the vendor to the purchaser, or receipt of payments in respect of the apartment, contrary to the provisions of section 3b(d) – a financial penalty of NIS 264,040;
(5)receipt of a sum of money exceeding seven percent of the price of the apartment from the purchaser by the vendor, on account of the price of the apartment, contrary to the provisions of section 2 – a financial penalty of NIS 528,080.
(b)For a breach of the following provisions by a banking corporation or an insurer, the Supervisor of Banks or the Commissioner of Capital Markets, Insurance and Savings shall impose on the banking corporation or the insurer, all as the case may be, a financial penalty in accordance with the provisions of section 4n in the amount of NIS 1,000,000:
(1)failure to produce a payment voucher booklet or failure to deposit payments by means of the voucher booklet in the accompaniment account, contrary to the provisions of section 3b(c);
(2)failure to issue a bank guarantee or insurance policy or failure to ensure that another security is issued, contrary to the provisions of section 3b(e);
(3)failure to notify the purchaser of his rights to assurance of the monies paid to the vendor, or failure to ensure that a security was given in favour of the purchaser or that a written undertaking of the vendor to provide a security was given, contrary to the provisions of section 3c.

Notice of Intent to Impose a Financial Sanction§

4c.

Where the Commissioner has reasonable grounds to believe that a person upon whom an obligation under a provision of a legislative provision listed in section 4b is imposed has contravened such a provision (hereinafter – the contravener), he may deliver to that person a notice of intent to impose a financial sanction on him (in this Law – notice of intent to charge); in such a notice the Commissioner shall state, inter alia, the following:

(1)the act constituting the contravention;
(2)the rate of the financial sanction and the period for its payment;
(3)the right of the contravener to argue his arguments before the Commissioner in accordance with the provisions of section 4d;
(4)the rate of the addition to the financial sanction in the case of a continuing or recurring contravention in accordance with the provisions of section 4g.

Argument before the Commissioner§

4d.

A contravener to whom a notice of intent to charge has been delivered may argue his arguments, in writing, before the Commissioner, in respect of the intent to impose the financial sanction and in respect of its rate, within 30 days of the date of delivery of the notice.

Charge Notice§

4e.
(a)Where a contravener has argued his arguments before the Commissioner in accordance with the provisions of section 4d, the Commissioner shall decide, after having considered the arguments raised, whether to impose a financial sanction on the contravener, and may reduce the amount of the financial sanction in accordance with the provisions of section 4h.
(b)
(1)Where the Commissioner has decided in accordance with the provisions of subsection (a) to impose a financial sanction on the contravener, he shall deliver to him a demand to pay the financial sanction (hereinafter – charge notice); in the charge notice the Commissioner shall state, inter alia, the updated amount of the financial sanction and the period for its payment;
(2)Where the Commissioner has decided in accordance with the provisions of subsection (a) not to impose a financial sanction on the contravener, he shall deliver a notice to that effect to the contravener.
(c)Where the contravener has not requested to argue his arguments in accordance with the provisions of section 4d within 30 days of the date on which the notice of intent to charge was delivered to him, that notice shall be deemed, upon the expiry of those 30 days, to be a charge notice delivered to the contravener on that date.

Updated Amount of the Financial Sanction§

4f.
(a)The financial sanction shall be according to its updated amount on the date of delivery of the charge notice, and in respect of a contravener who did not argue his arguments before the Commissioner as referred to in section 4d – on the date of delivery of the notice of intent to charge; where an appeal against the Commissioner's decision under section 4e has been filed and the appeals committee has ordered a stay of payment of the financial sanction – the financial sanction shall be according to its updated amount on the date of the decision on the appeal.
(b)The amount of the financial sanction shall be updated on 1 January of each year (in this subsection – the update date), in accordance with the rate of increase of the index known on the update date compared with the index that was known on the 7th day of Tishrei 5769 (6 October 2008); that amount shall be rounded to the nearest amount that is a multiple of NIS 10; for this purpose, "index" – the consumer price index published by the Central Bureau of Statistics.
(c)A notice of the updated amount of the financial sanction pursuant to subsection (b) shall be published in Reshumot (Official Gazette).

Continuing Contravention and Recurring Contravention§

4g.
(a)In the case of a continuing contravention, one-fiftieth of the financial sanction shall be added thereto for each day on which the contravention continues.
(b)In the case of a recurring contravention, an amount equal to the financial sanction that could have been imposed therefor had it been a first contravention shall be added to the financial sanction; for this purpose, "recurring contravention" – a contravention of a provision listed in section 4b, within two years of a previous contravention of the same provision in respect of which a financial sanction was imposed on the contravener or in respect of which he was convicted.

Reduced Amounts§

4h.
(a)The Commissioner may not impose a financial sanction in an amount lower than the amounts prescribed in this Chapter, except in accordance with the provisions of subsection (b).
(b)The Minister, with the consent of the Minister of Justice, may prescribe cases, circumstances and considerations by reason of which it shall be possible to impose a financial sanction in an amount lower than that prescribed in this Chapter, at rates to be prescribed by him.

Time for Payment of the Financial Sanction§

4i.

The financial sanction shall be paid within 30 days of the date of delivery of the charge notice as referred to in section 4e.

Shekel Interest and Late Payment Fees§

4j.

Where a financial sanction has not been paid on time, shekel interest and late payment fees shall be added thereto for the period of delay, until its payment, and the provisions of the Interest and Linkage Law shall apply, with the necessary modifications; in this Law –

"late payment fees" and "shekel interest" – as defined in the Interest and Linkage Law;

"Interest and Linkage Law" – the Adjudication of Interest and Linkage Law, 5721-1961.

Collection§

4k.

A financial sanction shall be collected for the State Treasury, and its collection shall be governed by the Tax (Collection) Ordinance.

Preservation of Criminal Liability§

4l.
(a)Payment of a financial sanction shall not derogate from the criminal liability of a person for a contravention of a provision listed in section 4b.
(b)Where an indictment has been filed against a contravener for a contravention of a provision listed in section 4b, he shall not be charged therefor with payment of a financial sanction, and if he has paid – the amount paid shall be returned to him with the addition of shekel interest from the day of its payment until the day of its return, and the provisions of the Interest and Linkage Law shall apply in respect of that interest, with the necessary modifications.

Appeal§

4m.
(a)A person to whom a charge notice has been delivered may appeal to the appeals committee established under section 10 of the Contractors Registration Law (in this section – the appeals committee); the provisions concerning ancillary powers, procedure and administrative appeal under that Law shall apply to an appeal under this section.
(b)The appeal shall be filed within 30 days of the date on which the charge notice was delivered.
(c)The filing of an appeal shall not stay the payment of the financial sanction unless the Commissioner or the appeals committee has ordered otherwise.
(d)Where the financial sanction has been paid and the appeal has been accepted, the amount paid shall be returned with the addition of shekel interest from the day of its payment until the day of its return, and the provisions of the Interest and Linkage Law shall apply in respect of that interest, with the necessary modifications.

Imposition of a Financial Sanction on a Banking Corporation or Insurer§

4n.
(a)The provisions of sections 4c to 4m shall apply to a banking corporation with the following modifications: the powers of the Commissioner under those sections shall vest in the Supervisor of Banks and a charge notice may be appealed in accordance with the provisions of section 14o of the Banking Ordinance.
(b)The provisions of sections 4c to 4m shall apply to an insurer with the following modifications: the powers of the Commissioner under those sections shall vest in the Commissioner of Capital Markets, Insurance and Savings, and a charge notice may be appealed in accordance with the provisions of section 92l of the Insurance Supervision Law.

Application§

5.

The provisions of this Law shall not apply to an apartment in respect of which the contract of sale was entered into before the commencement of this Law.

Implementation and Regulations§

6.

The Minister is responsible for the implementation of this Law and may make Regulations for its implementation, including Regulations prescribing methods of proof concerning the completion of construction of an apartment for the purposes of sections 2a and 2b(1).

Commencement§

7.

This Law shall commence on the 21st day of Shevat 5735 (2 February 1975).

Need to cite this law in a foreign court?

Eli Shimony Israeli Attorneys-at-Law provides certified Expert Legal Opinions on Israeli law within 24–48 hours, accepted by courts worldwide.

Contact Us →
←12 →

Page 1 of 2

Read the entire law on one page — continuous text, no page breaks, plus PDF downloads.

LawReal Estate & Land

חוק המכר (דירות) (הבטחת השקעות של רוכשי דירות), תשל"ה-1974

sale apartments law

apartment purchaser protection law

apartment investor protection law

apartment buyer guarantee law

chok hamechir dira

apartment sales law israel

housing purchase protection

apartment purchase assurance law

dir purchase law