Roy sent me a screenshot of an email, without another word. Just one subject line: “Price update following raw material price increases.”
Below it, a short message from the developer: the project had run into an exceptional rise in costs, and the price adjustment was “unavoidable.”
Roy, forty-something, had already managed two investment apartments in Israel before deciding to buy abroad. He knew how it works here - every contract with a contractor is linked to the construction input index, it's almost taken for granted, and every Israeli investor arrives with that expectation imprinted in his mind. So when he sat in front of the contract for the apartment in Romania and saw that there was no index linkage clause at all, he felt relief. “Finally a price that doesn't move,” he told me then. “Not like in Israel.”
There was only one clause that stood out from the rule: if the VAT rate rises between the signing date and the delivery date, the difference falls on him. That sounded reasonable to him. Tax is tax, it's something the state sets and no one controls it. Beyond that - the price is locked. That's how he understood it. That's also how it was actually written.
A year passed. Construction progressed. And then that email arrived.
The developer's explanation was candid, one could say. Steel and concrete prices in Europe had jumped following the war in Ukraine; it wasn't an empty claim, it was a reality that hit many projects in the region. But the question Roy asked me wasn't “is it true that prices rose.” The question was: “Is this my problem.”
I opened the contract and read it again, clause by clause. The price clause was clear and closed: a fixed price, with no linkage to any index, with a single explicit exception - VAT. There was no open wording, no “construction costs,” no “unforeseen circumstances,” no back door the developer could enter through. Whoever drafted that clause at the time, whether the developer or his lawyer, chose not to leave himself any room. And it now worked in Roy's favor, not against him.
I replied to the developer on Roy's behalf. Politely, but without stammering: the war in Ukraine is a serious circumstance, and we understand the difficulty. But the contract that was signed sets a fixed price, with a single exception that does not include a rise in construction costs. There is no contractual basis for the demand.
That is the moment I think about the most from this story. Because Roy didn't “win” because he was smarter than the developer, and not because he was lucky. He was protected because someone, a year earlier, had read that clause to the end and knew exactly what was written in it and what was not.
The difference between Israel and abroad isn't only “there is linkage” versus “there is no linkage.” In most cases in Israel you know in advance that the price will move, and it's priced into your expectations. Abroad, the price is often presented as fixed, and that sounds like protection. But “fixed” is a word that must be checked to the end. The real question isn't “is the price linked to the index,” but: what are all the exceptions in which the price can still move? VAT is one exception that appears almost always. Some contracts add more, changes in legislation, infrastructure costs, and sometimes a general, vague wording that leaves the developer an opening.
The developer didn't give up. There was more correspondence, an attempt at partial compromise, a request to “meet in the middle.” Roy refused. Not because he wanted confrontation, but because he had no need to compromise on something that was already his under the contract. In the end, the apartment was delivered to him at the price agreed on the day of signing, not one shekel more.
If you are buying an apartment from a developer abroad and saw there is no index linkage, don't assume that means the price “can't move.” Check exactly which exceptions are written there. Because what is not written in the contract, no one can demand of you, but only if someone bothered to verify that in advance.
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית