Who bears the risk if an Israeli apartment is damaged between contract signing and handover?

Israeli law separates ownership, possession and risk into three different moments. Signing a purchase agreement creates only a personal obligation. Ownership passes on registration at the Land Registry, while risk follows delivery of possession under the Sale Law. Between those points the apartment normally stays in the seller's hands, insured under the seller's policy, and the seller must hand it over in the condition described in the contract. If fire, flood or a missile strike destroys the property before handover, the buyer can generally treat the contract as breached and recover payments, and in extreme cases the court may apply the frustration exemption in Section 18 of the Contracts (Remedies for Breach of Contract) Law 5731-1970.

Foreign buyers should read the risk clause before signing, because a standard Israeli property purchase agreement often moves risk to the buyer from a fixed calendar date rather than from actual delivery. Ask for three things: risk passing only on handover of the keys, written proof that the seller's structure insurance stays in force until then, and a clause allowing cancellation and return of funds if the property is materially damaged. Buyers who are abroad should also arrange an inspection immediately before handover, since damage recorded only after the keys change hands is far harder to attribute to the seller.

From the full guide: Property Purchase Agreement in Israel: What Foreign Buyers Must Know

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