So you've bought, at a good hour, an apartment from a contractor abroad. You paid a down payment, and now you're waiting for construction to finish. Shlomi (the real name is kept on file) did exactly that, and went a step further: he consulted with a local lawyer before the purchase to get an idea of the rules of the game on the subject in the country in question.
Shlomi returned to Israel satisfied, went on with his affairs, and every now and then remembered that he hadn't heard from the developer for several months, but the pressure at work, the kids, the banks... he didn't call to check and didn't travel to see with his own eyes. After about a year he tried to contact the developer's offices and got no answer. Again a few months passed and the handover date drew near. Shlomi opened the binder, read the agreement, and was surprised to find that he was supposed to have made another payment but had not received a demand from the contractor. Again he called, and no answer.
Shlomi came to my office and asked to see me urgently. He waited patiently until I finished several meetings that had been scheduled. When he came into the office, trembling with anger, he told me that the contractor had run into financial difficulties and the project had not gone ahead, apart from a huge pit that had been dug for the underground parking. He fears that the down payment he made, 50%, had gone down the drain.
Shlomi, unfortunately, signed an agreement without making sure that the down payment funds he paid were secured. No priority notice was registered, the agreement was not signed before a notary (as is customary in the country where the project was being built), and the money was not transferred by him to a project bank escrow account but to the contractor's own bank account.
A check we carried out revealed that the contractor had failed to obtain financing, had failed to carry out the project, and that the plot had been sold about a month earlier to a third party. The meaning of waiving, or the absence of, a guarantee in the sale agreement, together with the 50% collected, was the loss of tens of thousands of euros, which might have been saved had Shlomi been accompanied by a lawyer and not merely consulted with a lawyer in a general advice session, as he did.
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית