About three years ago a client sat across from me, an experienced Israeli real estate developer who had bought a residential building in Bucharest together with a partner. He came to me after they had already closed the deal; now he wanted to draw up a proper partnership agreement between himself and his partner.
“Listen,” he told me, “we're good friends, but we're also businessmen. Everything needs to be written down. Just make sure that if something happens, the court will be in Israel. I'm not going to litigate in Romanian.”
It sounded logical. It's what most of my clients ask for. But this time, I stopped him.
“Are you sure?” I asked. “Listen, I have to tell you something. The property is in Romania. If there's a dispute, a judgment from Israel will be almost impossible to enforce there. An Israeli court doesn't know the local laws, and it won't be able to issue direct orders to the authorities in Romania.”
He looked at me as if I were exaggerating. “It'll be fine. We're both Israelis, and if there's a problem - we'll solve it in Israel.”
I tried again. I explained about the enforcement problems, about the need for a separate recognition proceeding in Romania, about the difficulties of proving foreign law.
He wasn't impressed. “Write Israeli jurisdiction.”
I wrote it. His partner consulted with another lawyer, and the two of them signed the agreement.
What happened two years later
My phone rings. It's the same client, but his voice is completely different.
“We have a big problem,” he said. “My partner stopped transferring his share of the expenses. We have a tenant who hasn't paid for four months and can't be evicted, and my partner refuses to approve the eviction proceeding. There's a serious failure in the building's central heating system and he won't approve the repair. I'm completely stuck. I want to open a case against him.”
“Fine,” I said, “we'll open a case in Israel. But I have to remind you that I warned you about exactly this.”
He sighed. “Let's start. Maybe it'll be okay.”
It wasn't okay.
The real mess begins in court
We filed a suit in the Tel Aviv court. We asked for interim relief: to order the partner to transfer his share, to allow urgent repairs to be carried out, and to approve the tenant's eviction proceeding.
At the first hearing, the judge asked basic questions that none of us knew how to answer:
“How does a tenant eviction proceeding work in Romania? What are the timelines? What are a tenant's rights under Romanian law?”
The other side's lawyer argued that the tenant is protected under a special Romanian law that came into force in 2022, a law that gives extended protection to long-standing tenants. My client said that was nonsense, that the law doesn't apply to his case.
But who could know who was right? Not the judge, not me, not the other side's lawyer.
We were required to bring a legal opinion from a Romanian lawyer. It took two months and several thousand euros. The opinion arrived in Romanian and was translated into Hebrew by a certified translator. The other side brought a counter-opinion from another lawyer from Bucharest, who argued exactly the opposite.
Now the court in Israel had to decide an interpretive dispute between two Romanian jurists about a Romanian law.
My client called me, frustrated: “I'm paying you, a Romanian lawyer, translators, and in the end nobody can answer anything.”
The problems just piled up
The judge asked: “What is the accepted practice in Romania regarding the division of shared maintenance expenses?”
Again, no one had an authoritative answer. In Israel, joint ownership is regulated by the Land Law and by the bylaws of the shared building. There is rich case law and clear concepts. In Romania? A completely different legal structure.
There is a concept there called “asociație de proprietari” - a homeowners' association. It is not exactly a building committee like in Israel. It has a different legal status, different powers, different obligations. The judge asked for a detailed explanation.
Another opinion. Another translation. More time and money.
“What is the legal status of the general assembly of residents in Romania?” the judge asked at the next hearing. “Are decisions made at the assembly binding on the owners? What majority is required?”
Again - an opinion. Again - experts. Again - a hearing postponed because the judge wanted “to deepen the understanding of the Romanian legal regime.”
My client could no longer hide his frustration. “It's already eight months! The defaulting tenant is still in the apartment, the heating system still hasn't been repaired, and my partner is simply waiting for me to give up.”
What a court in Israel cannot do
But the real problem was not only time and expenses.
A court in Israel cannot issue direct orders to parties in Romania.
The judge could not order the land authority in Romania to change a registration. She could not issue an eviction order that the Romanian police would enforce. She could not instruct the local management company or the contractor to carry out repairs. She could not compel the local homeowners' association to do anything.
All she could do was issue a declaratory judgment, which determines who is right, who owes what to whom, and what each side must do.
But how do you enforce such a judgment?
The enforcement journey - another nightmare
After a full year of hearings, we finally received a judgment. The court determined that the partner must transfer his share, approve the repairs, and allow the tenant's eviction.
My client was happy for a moment. “Finally!”
But then I explained the next stage to him.
To enforce the judgment in Romania, you have to go to a court in Romania and ask for recognition and enforcement of a foreign judgment.
That is a separate proceeding. You have to hire a local lawyer in Romania, file a motion, translate the entire judgment and the documents into Romanian, and wait for a hearing.
And the other side? He can object. He can argue that the judgment was issued contrary to Romanian public policy, that it is based on a mistaken understanding of local law, that the legal proceeding in Israel did not give him a fair opportunity to defend himself.
“How long will that take?” the client asked.
“At least another year. And there's no guarantee it will be approved.”
He fell silent.
The story ended in a way we hadn't planned
After a year of hearings in Israel, legal expenses that reached tens of thousands of shekels, and yet another enforcement proceeding planned in Romania, my client understood he had to make a different move.
He decided to open a separate suit directly in a court in Romania, in parallel with the enforcement proceeding.
Yes, it was expensive. Yes, it was frustrating. Yes, documents had to be translated, hearings had to be traveled to, and he had to work with a local lawyer who didn't always understand the Israeli dynamics between the partners.
But within three months - things started to happen.
The local court knew the law. The judge knew exactly what an “asociație de proprietari” is and what its status is. He understood the contract with the management company. He knew how to deal with defaulting tenants under Romanian law - without opinions, without translations, without explanations.
And most important, the orders he issued were immediately enforceable in Romania. No separate proceeding needed. Nothing to prove. It was a Romanian judgment, issued by a Romanian court, and it could be enforced that same day.
The local police evicted the tenant. The contractor repaired the heating system.
My client called me: “Why didn't we start this way from the beginning?”
“I told you,” I answered quietly. “I told you three years ago.”
What I learned
After dozens of international deals, I realized something that most investors don't understand at the start:
“Your” court doesn't necessarily know how to handle your problem.
When you invest in real estate abroad, you're not just buying a property, you're entering an entire legal system. There are laws, customs, precedents, institutions and authorities there, each of which operates by different rules.
A court in Israel, even if it has jurisdiction to hear the case (because of a jurisdiction clause in the agreement), does not know the local laws. It doesn't understand commercial practices, doesn't know the legal status of the various parties in the target country, and can't issue orders that can be enforced directly.
And even if it does issue a judgment - you will need an entire additional proceeding to enforce it.
Three essential insights
1. Your home court doesn't know the neighbor.
A jurisdiction clause in Israel gives peace of mind, but not practical peace of mind. An Israeli court will need an opinion on every basic question of foreign law. Every hearing becomes several times more complex and expensive.
2. The dispute is where the property is.
The tenants, the managers, the contractors, the authorities - they are all there. If your court can't issue direct orders against them - what is the use of the judgment?
3. Arbitration or local jurisdiction is not a weakness - it is strength.
International arbitration in the country where the property is located, or clear agreement to local jurisdiction, gives you decisions that can be enforced that same day. It's psychologically uncomfortable, but it is effective in practical terms.
Conclusion
Today, when a client asks me for an Israeli jurisdiction clause in a real estate deal abroad, I don't merely recommend, I warn.
I tell him this story. I show him the amount that client spent twice: once in Israel and once in Romania. The two years he lost. The frustration and helplessness.
And then I ask:
“Do you want to win in court, or solve the problem on the ground?”
Because sometimes, winning is not enough.
So if you are signing a partnership agreement in a real estate deal abroad - think twice: where will you really be able to enforce your rights, and who really understands the laws that apply to your property?
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית