“If only someone had explained to me before I signed the deal,” he says to me, his face fallen.
The man sitting opposite me received a detailed explanation which, had he received it before buying the apartment, in all likelihood he would not have bought the apartment at all. Right at the start of the meeting I understood that this is a person who does not like to take risks. The man trusted the broker, toured the property and other properties bought and renovated by the selling company, was shown the city, they ate together in good restaurants, and a kind of friendly relationship formed. After all this he trusted them and did not consult a lawyer but signed the agreement straight away.
Everything flowed smoothly for two years. Once a quarter he was sent the yield, which met the expectations and the marketing promises.
Now it was explained to him that the rules of the game had changed a little. The country had changed its laws and determined that buildings constructed before a certain year are required to carry out strengthening works. The new law that came into force also stipulates that apartments in these buildings may not be rented out until the strengthening is completed, and violators face fines.
They forgot to tell him that the law had been in the air and had been discussed in parliament for several years. The writing was on the wall. There was apparently no full disclosure. On the other hand, when you read the documents he signed, there is a disclaimer on the matter (in the local language and in legal wording that a layperson would of course find hard to understand). In this situation he doesn't have many options: sell now at a reduced price to bargain hunters; leave the apartment empty until the building is strengthened and hope for appreciation as a result of the strengthening; or keep renting the apartment as much as possible in the hope of not being caught.
International real estate requires consulting a lawyer experienced in the target country. Saving on fees will lead to legal exposure and even financial losses.
I always strongly recommend staying in touch with the lawyer who accompanied the deal and keeping updated on changes. Every professional has a role along the way, and one should not rely on one professional to replace another. It is important to work in an orderly, precise way, ask questions, investigate and understand the risks at every stage.
When it comes to significant sums of money, you leave nothing to luck...
What would you have chosen?
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית