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Can an Israeli developer make the buyer pay the developer’s lawyer’s fees?

No. Section 6 of the Sale (Apartments) Law 5733-1973, as amended in 2014, prohibits a developer from making the sale conditional on the buyer covering the developer’s legal costs. The developer may still charge a separate registration fee for the title work, capped at the lower of 0.5 percent of the purchase price or an index-linked ceiling, plus VAT. That payment buys registration services only, not legal representation, so the buyer still needs an independent attorney. Anything charged above the cap can be reclaimed.

Before the 2014 amendment, Israeli developers routinely added one and a half to two percent of the purchase price to the contract as "attorney fees" for a lawyer who in fact acted for the developer alone. Amendment No. 6 to the Sale (Apartments) Law ended that practice. The developer’s lawyer represents the developer, owes the buyer no duty of care, and cannot be presented as neutral. What survives is a narrow permitted charge for registration work: preparing and filing the condominium registration (rishum bayit meshutaf), completing the transfer at the Land Registry, and handling the related applications to the planning and tax authorities. The charge must appear in the contract as its own line item, and the developer has to actually perform the work it covers.

Check the fee schedule before you sign, because developers still occasionally present the capped figure as a floor and add "handling costs" beside it. A foreign buyer purchasing off-plan from an Israeli developer should budget separately for their own counsel, who reviews the specification, the bank guarantee under Section 2 of the Sale (Apartments) (Assurance of Investments) Law 5735-1974, and the payment schedule. Where a developer has overcharged, the excess is recoverable, and several Israeli class actions have been brought on precisely this point. Keep the signed fee page and the receipts, since the claim turns on documents rather than on what a sales agent said.

⚖ In Practice
  • Governing law: Section 6, Sale (Apartments) Law 5733-1973, as amended by Amendment No. 6 (2014)
  • Competent authority: Magistrates Court or District Court for a refund claim; Consumer Protection and Fair Trade Authority (HaRashut LeHaganat HaTzarchan VeSachar Hogen) for complaints
  • Cap on the registration charge: the lower of 0.5 percent of the purchase price or an index-linked ceiling of roughly NIS 6,000, plus VAT at 18 percent (2026)
  • Timeline: condominium registration usually follows completion of the whole project and often takes several years
  • Your own costs: an independent buyer’s attorney in Israel typically charges 0.5 to 1.5 percent of the purchase price plus VAT

From the full guide: Buying an Apartment from a Developer in Israel: A Complete Legal Guide for Foreign Buyers

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Get a Free Consultation with Adv. Eli ShimonyPrepared under the direction of Adv. Eli Shimony, Eli Shimony Law Office · Editorial policy

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