Ninety percent.
That is the number Asaf repeated in every conversation we had in those weeks. Ninety percent of the price had already been paid. The building stood, the facade was finished, the elevator worked. In his apartment in Athens only the final finishes and the furniture were missing. He already knew where the couch would stand.
This apartment was the first part of a plan Asaf had been building slowly over several years. To rent it out in the coming years, and later to spend part of the year there, once the children were grown. He flew to Athens twice during construction, photographed every floor that went up, and sent the pictures to the family WhatsApp group. The last time he was there, the site manager shook his hand and said: “Another month and a half, and you get a key.”
Then the workers simply stopped coming.
At first he thought it was an ordinary delay, the kind everyone who bought an apartment off plan knows. After two weeks he called the contractor. The contractor did answer, and said one sentence that Asaf repeated word for word: “I'm not going back to the site until the developer pays me what he owes.”
Asaf called the developer. The phone didn't answer. The emails went unanswered. After a few more attempts it became clear what was already clear to everyone at the site: the developer had disappeared.
When Asaf called me, he was no longer asking when he would get a key. He asked: “Ilan, does my money still exist?”
To that question, unlike in many cases I see, there was an answer.
At the time of signing we had insisted on registering a prenotation in his favor on the property. In plain language, that is a conditional mortgage. It does not give the buyer the apartment. It records in the land registry books that he has a monetary claim against the property, and that this claim was registered on a particular date.
Asaf barely remembered it. To him it was one more document in the pile, one more signature on a long day at the notary. I remember he asked then whether it was really necessary, because “this developer has already built three projects, he's not going anywhere.” I told him I wasn't asking for it because of the developer. I was asking for it because of the day when it would no longer matter who the developer was.
Now that document made all the difference.
Because when a developer disappears, everyone arrives at the same property. The contractor with his invoices, suppliers who weren't paid, perhaps other buyers in the project too. Each of them has a claim, and most have a just claim. But justice does not determine the order. In the end there is one building, and a limited amount of money, and the only question that matters is who stands first in line.
Whoever has only a contract stands in line with everyone. Whoever has a registration stands where the registration placed him.
We filed a lawsuit. Here I need to explain something about the prenotation, because this is exactly where people get confused. It does not automatically become full security. To become a real mortgage, a final judgment recognizing the debt is required. Only then, within a short window of time, does it convert into a mortgage, and then the mortgage is treated as if it had been registered on the day the prenotation was registered. Whoever registered after Asaf stays behind him, even if he reached the court before him.
That is the strength of the mechanism. And it is also its weakness.
Because a final judgment in Greece does not arrive quickly. The hearing is set, postponed, set again. Months passed, and then more months. Meanwhile the apartment stands almost finished, without a kitchen and without interior doors, and ninety percent of the price sits inside walls Asaf cannot enter, and brings him in not a shekel. The furniture he ordered is still waiting in the supplier's warehouse, where it costs him money every month. Asaf sent me a message after one of the postponements: “So I'm first in line. For a building nobody is finishing.”
He is right, and this is the less pleasant side of this story. This story has not ended yet. Asaf didn't get an apartment, and hasn't yet gotten his money. What he has is a place. A good place, at the head of the queue, with everyone else standing behind him. But still a place in line, and not a key.
I think about this a lot. Most people who buy an apartment off plan ask one question before they sign: when do I get the apartment. Almost nobody asks the second question: and if not, what do I hold in my hand?
For Asaf the answer to the second question was a registered document with a date. In many agreements that reach me, the answer is a contract, receipts for bank transfers, and hope. As long as the developer stands, the difference between the two is invisible. On the day he disappears, it is the only difference left.
And ninety percent paid with no registration at all is not ninety percent of an apartment. It is ninety percent of a lawsuit.
The question I would ask in your place
- If the developer disappears tomorrow, what is registered in my name in the land registry books, and not only in the contract?
- How much of the price am I paying before I have something registered, and what protects that money along the way?
- Do I know who else might stand in line over the same property, and where I am relative to them?
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית