Married for Life, to Your Contractor

Errant construction on your new home can make life miserable, but the Knesset and the courts are cracking down.

Shlomit Tzur
Send in e-mailSend in e-mail

Construction problems are a homebuyer's nightmare. They put millions into buying a home, fixing it up and furnishing it - and cracks appear in the walls and fungi flourish as damp seeps in. But homebuyers can take comfort in legislative amendments that crack down on construction flaws, and courts that frown on contractors who err.

Under the new rules, even if 20 years have passed since the buyers took possession, compensation can be had.

The previous version of the law governing a sale (of goods or a dwelling ) was vague in many areas, leading to lawsuits. The amendments and court precedent have laid things out more clearly, and buyers come out on top.

Take the decade-long battle after which homebuyers in Petah Tikva got money for renovations back from the developer. The city had declared hazardous a four-building complex put up in the 1980s because of construction problems.

The homeowners had to pay NIS 2 million to fix the problems. After that, 75 of them grouped together and in 2004 sued the developer and Petah Tikva. The owners claimed that the construction had been substandard. In the few years after they took possession and moved in, water seeped into the underground parking lot, causing parts of its cement ceiling to crumble, the owners claimed.

During the 1980s and 1990s the developer did repairs, to no avail. In 2001 the municipality ruled that the building was dangerous and sued the tenants in 2002 for violating the hazardous-buildings ordinance.

But in their lawsuit, the tenants claimed that the municipality bore some responsibility for the buildings' deterioration. It used the courtyard for public events and didn't do its share of maintenance to prevent rain from seeping into the parking lot. The city placed giant plant pots that also caused water to leak into the parking lot.

Petah Tikva city engineer Yaakov Duvdevani, appointed by the court as an expert witness, accused the builder of not sealing the parking-lot ceiling properly.

The tenants bore some blame for failing to repair the flaws quickly, he said: If they'd acted, the buildings' condition would not have become a hazard.

The developer, of course, sheltered under the statute of limitations: The complex had been built in the 1980s and the tenants sued in 2004. But a Petah Tikva Magistrate's judge sentenced him to pay the tenants NIS 700,000 compensation plus linkage and interest, plus NIS 100,000 in legal costs. The city got off scot-free.

The tenants didn't get back the whole cost of renovation because of their contributory responsibility for failing to handle the problem as it arose. More importantly, the judge took a wider view, says Malka Engelsman, the tenants' lawyer. The judge didn't count seven years from the time of construction, but seven years from the time the construction problems became a disaster, Engelsman said.

Rishon a la Petah Tikva

This isn't the only case in which the court didn't let the developer evade responsibility because years had passed since the building was put up. In 2008 the Rishon Letzion Magistrate's Court ordered M.Y. Gindi, the construction firm belonging to brothers Moshe and Yigal Gindi, to pay more than NIS 750,000 in compensation to 217 tenants of five buildings for repairing them after they'd been declared hazardous. The project's engineer was ordered to pay the tenants NIS 250,000 on top of that.

The buildings had been constructed more than 30 years ago on Remez and Hikishon streets and had a common story (the first, like the Petah Tikva complex ), which was the ceiling of a bunch of stores and a parking facility. Again, over time, that ceiling crumbled, and in 2003 the city declared the buildings hazardous, ordering the owners to make repairs.

The owners claimed that repairs cost NIS 2.4 million and demanded that Gindi and the engineer pay.

An expert told the court that the planning and execution of the floor of the common story and the ceiling had been faulty. The owners bore 15% contributory responsibility for neglecting the building over time, the expert ruled.

Here too the developer and engineer sought shelter under the statute of limitations: The tenants had discovered the seepage in 1983, shortly after taking possession. But Judge Iris Soroker said the damage was different, and the relevant damage had only come to light in 2003.

The law on the side of buyers

At the end of March, the Knesset amended the law governing the sale of property. The amendment came into force on April 6 and put the burden of proof for building problems on the developer for 20 years.

"It's a revolution for the consumer," says attorney Tzipi Biran, legal adviser to the Housing Ministry. One important aspect of the amendment is that the developer remains responsible even after the dwelling changes hands.

The old version of the law didn't set a time limit on the developer's responsibility for poor construction of foundations, which led to protracted battles in court, Biran says. Now the law assumes that the buyer is right unless the builder proves otherwise.

In the Petah Tikva case, the builder had claimed that since the original buyers sold the dwellings on, his responsibility was lifted. That can no longer be argued, says Engelsman. Also, defining responsibility as lasting 20 years is important because builders had tended to argue that seven years was the limit.

Nor can the developer evade responsibility by making buyers sign a document that they waive all claims, says Biran.

The amendment also requires the builder to give the buyer instructions for maintaining and using the property. It also enables the buyer to repair problems at the developer's expense, if the developer neglected to repair them for two years, or for a reasonable period of time if the problem is urgent.

Under the new law, the period of testing for potential problems such as seepage from pipes or the roof has been extended.

Shouting from the rooftops

Itzik Amsalem, vice president of the Builders and Contractors Association, says that in recent years, developers have adopted technology that improves building standards. Builders don't like disputes over construction problems either.

"We have statistics saying that a satisfied tenant tells five people about it and a dissatisfied one tells at least 28," Amsalem says. "It pays to keep people happy."

But Amsalem points out that construction involves hundreds of elements, including planning, carpentry, plumbing and the subcontractors building the foundation.

At least with the new law, people may feel more secure about getting their problems fixed once and for all.