Buying a residential apartment? What are you checking? What should you be careful about?

In this article, I will review preliminary tests that should be performed before purchasing an apartment and point out landmines that should turn on red lights for you.

For the purposes of the article, let's assume that you have found an apartment that matches your financial capabilities and needs (a step and a topic in itself for writing), and let's assume that you have taken into account additional calculations and costs, for example: purchase tax, moving costs, NIS for service providers: attorney, realtor, appraiser, architect, Interior designer, home inspection company and more.      

First step - check regarding the status of the registration of the rights in the apartment and its planning status

Where is the apartment registered?? Two government bodies coordinate the registration of most properties in Israel: the Land Registry Office and the Israel Land Authority. Sometimes, and as an intermediate step, registration is conducted with a mortgage company (contractor) until the registration is completed in one of the aforementioned bodies. There are other bodies that manage registration such as Amidar and the Jewish Agency.

If the apartment is registered in the Land Registry Office, it is recommended to ask to see a tabu version. If the apartment is with the Israel Land Authority or with a mortgage company, it is recommended to ask to see a confirmation of rights. These documents constitute a kind of identity card for the apartment and will provide you with important initial information. Such as: what is the type of rights in the apartment (ownership, lease). If it is a lease (a lease for a period exceeding 25 years), the state is probably listed as the owner, and it is recommended to ask to see the agreement between the state and the seller (called: 'lease agreement'). In the lease agreement, check whether there are conditions for sale.

Is the seller registered as the owner of the rights? On the face of it, it sounds obvious, but it's not. In some cases, the seller may not be registered for one reason or another (debt to the authorities, for example). If the seller has not yet registered, you must understand the reason for this and ask to see the seller's purchase agreement. Sometimes the purchase agreement will contain information regarding registration. If the seller is registered, the identity details between those appearing in the registry and the identity card must be checked. Some people are registered without their ID number appearing. In such a case, an identity proof procedure is required which is conducted in front of the registration office. Sounds simple but can get complicated.

Is a shared house registered?? Registering a condominium is a legal action that creates a separation between the apartments in the registration form. This means that the apartment appears in the registry as a separate unit with its own registration number. If a shared house is registered, you must check what the boundaries and area of ​​the apartment are and what the apartment includes (storage, parking, roof, balcony). If a condominium is not registered, it is important to check what is delaying the registration (debt? To whom?), and who is responsible for the registration (contractor?).    

Review of the building file in the engineering department at the Authority. This issue is of the utmost importance. In the building file you will find important documents such as a building permit, Form 4 and a certificate of completion for the building. The building permit will show whether it is a property that was built with the purpose of being used for living and what is the area of ​​the apartment that is allowed for construction. In Tel Aviv, for example, there are many properties that are used for residences even though legally they were built as warehouses or as business properties. Regarding the area of ​​the apartment - if the area of ​​the apartment is larger than what appears in the permit, it may be an exception and a construction violation. Identifying such a mine in time will save a lot of headache later.

It is important to emphasize that the registration of a property in the registry and the registration of a condominium do not indicate that an apartment was built according to a building permit.

Second step - checking debts (mortgages, encumbrances and debts to the authorities)

Many transactions are financed through mortgages and loans from various institutions. The direct meaning is that your money should be used, in many cases, first of all to cover the seller's debts. Therefore, in the stage of performing the preliminary tests, it is important to find out the extent of the seller's debts with the financing bodies and with the authorities. This information has a decisive weight in the questions of whether to purchase the apartment, at what price, under what payment terms, and what are the protection mechanisms to determine against making the payment, which will ensure that you will be the owner of the apartment at the end of the road. 

So where do you check it?? Information regarding mortgages can appear in the tabu statement or in the confirmation of rights, depending on the registry where the registration is conducted. If the seller is not registered as the owner of the apartment or in order to find additional debts of the seller, you can check in the registry maintained by the mortgage registrar according to the seller's identity number. If you are buying an apartment from a company and not from a private person, you can check liens and debts in the registry maintained by the company registry by company number. Debts in the authorities check in the property tax department, in the infrastructure and development department (development levies) and in the engineering department regarding debt in the improvement levy.

Early detection of the debts will create certainty in the transaction and prevent potential conflicts between the parties.

Third step - physical inspection of the apartment

Beyond performing the tests on paper, it is recommended to physically come to the apartment and check its condition and the condition of the building and the immediate surroundings. In the apartment itself, they checked that all the systems are working and that there are no defects or defects that stand out to the eye. If it is an old apartment, it is recommended to use appropriate professionals. The chance of finding defects in the internal systems of the apartment without the help of professionals is low, and legal protection in the contract will not prevent the inconvenience either. Regarding the condition of the building, check how it is maintained and if the apartment owners live there. If most of the tenants are renters and not apartment owners, there is a high chance of a low level of maintenance and it is equally important to have a low responsiveness in improving the maintenance in the future.

In this article, I reviewed a series of preliminary tests that are recommended to be performed before purchasing an apartment in order to increase the chance of avoiding defects, accidents or significant damages with financial and other consequences. Of course, a good way to avoid landmines is to use appropriate professionals (attorney, architect, appraiser, engineer, inspection company, etc.). רשימת הבדיקות שהוצגה במאמר אינה מקיפה את כל הבדיקות וייתכנו בדיקות נוספות ואחרות.