Twelve months of warranty in a contract are a window for reporting. They are not a ceiling on your exposure.
“The period ended in August.”
Ronen said this as we stood on the roof of his building in Larnaca, at the start of the month, the day after the first rain of the season. Below us, eighteen apartments, sixteen of them owned by Israelis. On the roof, where the insulation was supposed to slope down toward the gutter, stood a puddle. And in two apartments on the top floor, a crack in the ceiling that had been lengthening through the winter.
He didn't say it in anger. He said it like someone holding a legal argument and hoping it's enough.
Ronen's sale contracts had a tidy clause: twelve months of warranty for defects from the date of handover. Handover was last August. Six buyers wrote to him in September, in the building's WhatsApp group and later by email, with photos. According to the contract, they were a month late.
So I took out the spreadsheet. Not the contract, the budget.
Ronen is a good developer. This project, his second in Cyprus, was delivered on time and sold out before the frame was finished. But when we went through the budget, one line simply wasn't in it. There was no warranty reserve. On the very day the building was handed over, Ronen paid the main contractor the final balance, including the retention. The contractor moved on to a project in Limassol. As far as cash flow was concerned, the project was closed.
And not only as far as cash flow. Ronen came to Cyprus after ten years as a project manager at a contracting company in Israel. He can read a structural plan, he knows every subcontractor by name, and he is proud, rightly, that none of his buyers waited for a key more than a day beyond the contract. In his head, the Larnaca building was already behind him. He was already standing on a plot in Limassol, already sitting with an architect, already thinking about the renderings. The puddle on the roof was, to him, a matter of a project that had ended.
I explained to him that what is written in his contract is not the whole picture.
In Cyprus there is no automatic statutory warranty that applies to every defect in every new apartment. What there is, is the contract, and a limitation period. A contractual claim there generally expires after six years. Ronen's warranty period determines until when he committed to repair quickly and without argument. It does not determine until when he can be sued over defective construction. And there is another layer. When the buyers are private individuals, a clause that tries to close the door on them after one year may be attacked under the Cypriot consumer protection law as an unfair term.
“So my clause isn't worth anything?” Ronen asked.
It is worth something. It sets an order, a procedure, a timetable. But it is not a wall.
Then I told him what I thought was more important than the legal sentence. His next project, in Limassol, he plans to sell to exactly the same people. Not to the same buyers, to the same audience. Israelis who know Israelis, who sit in the same groups, who ask for a recommendation from a friend who has already bought. Buyers with photos of cracks and damp in the walls are not a lawsuit. They are a campaign.
Ronen was silent for a long minute on the roof. Then he said: “How much?”
A waterproofing engineer estimated the work at thirty-eight thousand euros: to strip the roof's waterproofing layer, rebuild the slopes for drainage, and repair the ceilings in the two apartments. The main contractor, who had already received all his money, agreed to send a crew for an inspection. No more. With no retention in hand, Ronen had no leverage to press him. He paid the whole sum out of the project's profit.
The work was done at the end of the month, before the heavy rains. Ronen himself wrote to the building's WhatsApp group, announced the repair and published a schedule. One of the buyers, the angriest, answered in one sentence: “Thank you. I didn't think you'd do it.”
In the Limassol project, three things are already different. In the contract with the contractor, a retention was set that is released only after twenty-four months, and not on the day of handover. In the budget there is a new line, a warranty reserve, calculated in advance from revenues and not left for a later decision. And in the contract with the buyers there is a clear procedure: how to report a defect, within what time we come, and a joint inspection in the eleventh month, before the period ends, and not after it.
“I paid thirty-eight thousand for a lesson,” he told me. “In the next project it will already be in the budget.”
What struck me in this story is not the roof. Roofs leak, that's part of the profession. What struck me is how many developers price a project up to the key, as if that is where it ends. The building keeps standing for years, and all those years your name stands on it. The period in the contract can end in August. The building does not.
The question I would ask in your place
- If a demand for a thirty-thousand-euro repair arrives tomorrow, from which line in the budget do I pay it?
- What do I have in hand against the main contractor on the day after handover?
- Is the warranty clause in my contract built to manage defects, or to avoid them?
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית