Danny and Nalia bought an apartment in Carmiel from Raphael and Ronit in 2011, for ILS 1,420,000. After the entire consideration had been paid, Danny and Nalia received possession of the apartment and registered it to their name with the Land Registration Bureau.


In retrospect, Danny and Nalia learned that Raphael and Ronit deceived them when they entered into the agreement - they declared that all construction was performed lawfully when they signed the sale agreement; however, the apartment contained building deviations and the storage room was built without a permit.
Once it was found that the storage room does not have a building permit, the parties signed an appendix to the sale agreement wherein Raphael and Ronit promised to settle this with the authorities and “legitimize” the construction in every way.
Three years elapsed and Raphael and Ronit did not legitimize the construction as they had promised. Danny and Nalia filed a lawsuit with the District Court to void the sale agreement, return the consideration due to the apartment, and to receive damages due to breach of contract.
The court accepted their claims and decided that Raphael and Ronit promised to sell Danny and Nalia a lawfully built apartment. However, even though almost 4.5 years have passed, Raphael and Ronit still did not settle the matter with the authorities as they had promised, thus committing a material breach of their agreement with Danny and Nalia.
It was also decided that Danny and Nalia were not at fault for waiting several years before they gave notice of the agreement’s revocation - on the contrary, they had afforded Raphael and Ronit time to legitimize the illegal construction, waited patiently, and were fair and understanding. Thus, their notice of the agreement’s revocation was sent duly and at a reasonable time.
In light of the court’s decision to revoke the agreement, it was decided that Danny and Nalia will return possession of the apartment to Raphael and Ronit, and receive the consideration they paid them, ILS 1,420,000, back.
In addition, it was decided that Raphael and Ronit will compensate Danny and Nalia due to the apartment’s increased value by ILS 235,000. The reason for this is that Raphael and Ronit are taking back an apartment that is worth more than it did when it was sold, whereas Danny and Nalia are receiving what they paid for their apartment back but they will be unable to buy a comparable apartment for this amount.

• Case number 4753-04-15 (Haifa District court) Turchin V. Ifargan, given on June 11th 2017.