We sat on the roof with a cup of coffee. We've known each other for over 20 years, since he married a childhood friend. Shared Saturday hikes, shared outings, family celebrations. This is the first time we've sat down to talk about business, and he tells me that he recently bought 4 apartments in a luxury project in a foreign country.
“Nice,” I said, “good luck.”
“Right now I'm mostly in the worry stage,” he said. “Did I do the right thing putting all my money into one project? In one country? What happens if something goes wrong along the way?”
“I understand,” I replied, “I can understand you. The first deal is always full of worries, and I'll tell you that the second and third don't always go smoothly and without worries either.
There are advantages and disadvantages to going with one project. But now it's already too late to get into that. Let them do the work, follow the construction, and let's hope everything goes well.”
Last Saturday, as the sun came up, we met again for coffee, this time in the forest together with a few other friends. More than a year had passed since our meeting on his roof, and since then we hadn't talked about the apartments he bought. At some point he suggested we go for a short loop, and I understood that he wanted to talk without extra ears listening in.
“There's a delay in the works of about half a year,” he said, “but they're making progress and have informed me that in a month the apartments will be ready.”
“Great,” I replied, “meaning it's a pity that they're late, but as long as they hand over the apartments, look at it as a minor blow to the wing.
Check in the agreement whether there's a clause for compensation for the delay,” I added.
“OK. And...?” he asked.
“If there is, calculate how much you're owed, send them an email or a letter, and ask them to offset it against the last payment.”
“And what if the amount I'm owed is higher than the amount I have left to pay?”
“Then first of all, don't transfer them any more money. When they send you the final payment demand, ask them to calculate how much compensation you're owed,” I explained to him. “Tell them you're offsetting the amount, up to the compensation you're owed from them.”
And here our plot thickens.
Two days later he calls me. Completely furious. It turns out there is no clause concerning compensation for late delivery in the agreement he signed (yes, yes, he trusted the marketer and signed the agreement without consulting anyone). Now all that was left in our hands was the marketer, and here too we knew how to find a legal solution.
The client had relied on the marketer, who promised him that everything would be fine and would proceed according to plan - that is a legal basis for tying the marketer to personal liability for the damages of the delay and, accordingly, for obligating the marketer to find a solution with the developer.
I initiated a meeting with the marketer and explained to him that I intended to hold him liable for the damages caused to my friend, and made clear that he would be exposed to a lawsuit from the client for failing to secure compensation for the delay, and that the client had suffered damage from lost rental income (after all, this is 4 apartments). The marketer has a duty toward the client, who was not represented and relied on him.
In parallel we began looking for a solution with the local developer, and after no small effort we managed to find a gap that, under local law, allows cancelling an apartment purchase agreement if the delay in handover exceeds 6 months.
Combined with the pressure applied by the marketer, we managed to exempt my friend from paying the balance of 5% on all the apartments he bought, and even to obtain compensation from the developer, who installed air conditioners in all the apartments at his own expense.
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית