Common-property defects seven years after handover: claim not time-barred, developer held liable

The representative committee of a residential building in Netanya sued the developer that built it over waterproofing, plumbing and paving-subsidence defects in the common property, and the developer argued limitation and the expiry of the inspection and warranty periods. The court rejected those threshold defences, held that the developer had lost its right to carry out repairs and awarded partial compensation, while refusing reimbursement for waterproofing work the committee had commissioned on its own.

What happened

The building, with 9 floors and 41 apartments, received its occupancy permit (Form 4) in October 2013. On 10.11.2013 a handover protocol for the common property was signed, and the apartments were handed over in December 2013. Already in the first year of occupancy, damp penetration, subsidence of interlocking paving stones in the yard and car park, and other defects appeared. Over the years the residents and the committee turned again and again to the developer and the building contractor; a warning letter was sent in June 2019, and the claim was filed in November 2020.

During the proceedings the court appointed an engineer as its own expert. Meanwhile, because of recurring leaks, the committee had 17 gutters and sewage pipes repaired in 2022 at a cost of ILS 42,316 including VAT, and in 2024, after the damp on one side of the building got worse, it had external waterproofing done by rope access at a cost of ILS 128,700 including VAT.

The parties' arguments

In its closing submissions the committee sought about ILS 280,000, including the cost of the 2024 waterproofing, the amount set by the expert and the cost of expert reports. It argued that the developer had been given many chances to make repairs and had not done so properly.

The developer argued that the claim was time-barred, since the common property was handed over in November 2013 and the claim was filed only seven years later, and that the inspection and warranty periods under the Sale (Apartments) Law had expired. It also argued that some of the defects resulted from wear and poor maintenance by the residents, that it had not been given a chance to repair, and that the claim for the plumbing repairs was an impermissible expansion of the case, since it did not appear in the statement of claim.

The decision

Limitation: the court explained that in a committee's claim over common property, the date of the handover protocol is not applied automatically. The question is when the cause of action actually arose, and under section 8 of the Limitation Law, where the facts were unknown to the claimant, time runs from the date of discovery. Here it was proven that the damp and subsidence came to light from mid-2014 and in the winter of 2016, so the claim was filed in time.

Inspection and warranty periods: the handover protocol expressly stated that the check was "for missing items only", meaning there was no full and proper handover. In addition, the developer had been notified of the defects from the first year. The court added that even once those periods have passed, the law does not bar a claim in negligence or for breach of contract; but the claimant must then prove the source of the defect and the causal link on its own.

Right to repair: the court held that the developer had lost it. It had been given many opportunities since 2014, the repairs had failed, and in a notice to the court in December 2021 it stated that it preferred monetary compensation over repairs in kind.

What was awarded and what was rejected:

• The court adopted the expert's opinion, which put the defects for which the developer was responsible at ILS 49,000 plus VAT. From this it deducted ILS 3,000 that the expert had recommended only as a goodwill gesture, for an item whose standard was published after the building permit was issued.
• The plumbing repairs were allowed: the statement of claim had already dealt with leaks from the shared gutters, and the work was meant to limit the damage from those same defects, so this was not an expansion of the case.
• The claim for the 2024 waterproofing was rejected: the work was done independently, without the expert's supervision, and no direct causal link to the original construction work was proven.
• Damp problems inside certain apartments were found to be a matter of wear and maintenance, and in one apartment the mould was attributed to inadequate ventilation.

The outcome

The developer was ordered to pay the committee ILS 46,000, plus 25% (ILS 11,500) because the work will be done by an outside contractor, and ILS 5,000 for engineering supervision, for a total of ILS 62,500 plus VAT. It must also reimburse ILS 42,316 for the plumbing repairs. Because the claim succeeded only in part, the court awarded ILS 20,000 in legal costs and ILS 15,000 in attorney's fees including VAT. The amounts are payable within 30 days. The judgment can be appealed.

This article summarizes a published Israeli court decision in plain language and is not legal advice. Every case depends on its facts. The parties' names have been omitted. This is a first-instance decision and may be appealed.