He had accompanied the process of setting up a non-profit association of which I was among the founders. A respected lawyer who owns a firm employing several lawyers and trainees in a luxury Tel Aviv tower. About a year after the association was established, he called and said he had heard from the association's chair that I deal in international real estate, and he would be glad to meet because an amazing deal had been brought to him that he wanted me to accompany.
The meeting was warm and businesslike. We talked about work, about the association, about the plot on the lake shore that had been offered to him, about the connection he had made with an international hotel chain that had expressed interest in cooperating so that the hotel built on the plot would be operated under its name, and we agreed on the fee he would pay for due diligence, plus an addition for accompanying the negotiation of the purchase agreement.
In one of our conversations I asked whether he had traveled to see the place. No, he replied. And I recommended that he fly to the country and arrange for a surveyor to identify the plot for him. It's worth the investment, and it's important that you form an impression with your own eyes and don't buy on the basis of what the brokers say.
About two weeks later he called. I'm on the land. What luck that I took your recommendation and came. It isn't on the lake shore but several hundred meters from the lake. You can see the lake from it.
I smiled and asked whether we were continuing with the checks.
Of course, he said, we'll lower the price a bit, but I still believe in the place.
The completion of the due diligence process led us to recommend not buying the land, because of irregularities we found in the paperwork and the risk that some of the documents presented were forged.
When he read the report he called in a rage and claimed that we don't understand real estate and that the report was not acceptable to him. Together we traveled to the country and handed the documents over for review by 2 notaries (one I work with regularly in the country and another who was recommended to him by a friend). Both notaries recommended accepting my recommendation and not buying the land.
When we returned to Israel I sent him an invoice for the transaction. I wrote that since he was ultimately not buying the land, I proposed that he pay only 50% of the agreed amount.
In a reply email I received an outrageous answer: I'm not buying the deal, there is no reason for me to pay you.
I called immediately and said to him: We did the work. It may be that you don't like the result, but 2 notaries confirmed our conclusions. I saved you more than half a million euros that would have been lost had you bought the land. Aren't you ashamed? I should have received the full fee we agreed on for the due diligence process, plus a bonus for saving you. Do your clients not pay you either when the result you obtain for them isn't to their liking?
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית