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  • Writer's pictureGedaliah Borvick

Buying on Paper: 8 Important Things to Know

Updated: May 8, 2022

Real estate attorney Nicole Levin recently shared with me a list of eight important things to be aware of when buying “on paper” in a new project under construction. Let’s review her list.

1. Once you have chosen an apartment and agreed on the price, you will sign a registration form and pay a registration fee. Before signing, have your attorney review the document to ensure that there are no egregious terms. Once you sign the form, the developer is required to reserve the apartment for you and may not sell it to anyone else.

2. After you sign the registration form, the developer will send the contract to your attorney. Your lawyer will review and revise the contract. There is often room for negotiation at this stage, despite the fact that these are standard contracts for all units in the project.

3. The final plans may differ from the plans that initially viewed. The developer is only bound by the plans that are attached as an addendum to the purchase agreement. Before signing the contract, make sure that the plans match the original plans that you were shown.

4. The law mandates that the buyer’s money is protected. There are three ways this can be done; a bank guarantee is by far the most common method of financial protection and works as follows: The project funding is given by a bank, which issues the bank guarantee to the buyer. Funds paid by the buyer are deposited in an account controlled by the bank and the bank pays the construction company at predetermined completion stages of the project. The project is mortgaged to the bank giving the guarantee and the mortgage is only lifted after construction is complete and the rights to the apartments are registered in the buyers’ names.

5. The plans and technical specifications describe the apartment you are buying. These two documents are addended to the contract. The floor plans include the size of each room, the location of windows and doors, outdoor space, etc. The technical specifications describe apartment material quality and quantity. The developer is required to deliver the apartment as specified in the plans and the technical specifications - and must compensate the purchaser if it fails to do so.

6. The developer is responsible for delivering a product without defects. If there are any flaws in the construction, the developer is responsible to fix them. Before taking possession, you will view the apartment with a representative from the construction company and together prepare a protocol which lists all defects that are visible to a layperson. As the company is not required to repair any defect that could have been seen by a layperson and was not written in the protocol, we recommend hiring a building engineer to accompany you and point out any flaws that you may overlook. Hidden problems that cannot initially be detected, such as dampness, may only appear later on. The construction company is required to repair these defects as well. Israeli law provides warranty periods for all items in the apartment.

7. Construction of the project is usually completed before registration of the property title. The developer’s attorney is responsible to register the project, your building, and your apartment in the land registry, which is done after the authorities have surveyed the land, a court order has been issued, and architectural plans have been filed. This process typically takes many years to complete; until then, the rights of the purchaser are often temporarily registered with the developer’s attorney. Parenthetically, when buying on paper, the buyer is usually required to pay 5,000 NIS+VAT for the developer’s legal expenses.

8. The unpaid portion of the purchase price is linked to the building index, so plan your payments accordingly. Until this past year, the index has risen approximately 2% per year for almost a decade. This past year was rife with global inflation, and therefore the building index rose by over 5%. The index is expected to continue rising during the upcoming 12 months, albeit at a slower pace.

Nicole Levin is one of the excellent real estate attorneys I recommend to overseas purchasers. If this article inspires any follow-up questions, please contact her at or visit her website


Gedaliah Borvick is the founder of My Israel Home (, a real estate agency focused on helping people from abroad buy and sell homes in Israel. To sign up for his monthly market updates, contact him at

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