Hidden defects in Israel: what the "as is" clause does not cover
In Israel, almost all contracts for the sale of a second-hand apartment specify that the property is sold "as is." Many buyers conclude from this that they will have no recourse if a defect appears after the keys are handed over, and many sellers believe they have nothing to disclose. Both are mistaken: Israeli law imposes on the seller a duty of transparency that the contract cannot override.
I. No mandatory inspections, but an obligation of conformity
French buyers are used to receiving a technical inspection report (dossier de diagnostics) from the seller. There is nothing of the sort in Israel for a second-hand home: the seller has no report to provide, and the legal warranties owed by developers only apply to new homes.
Sales between private individuals are not, however, without rules. The Sale Law (Hok HaMekher โ ืืืง ืืืืจ) of 1968 also applies, with the necessary adaptations, to real estate sales. It penalizes non-conformity (I-Hatama โ ืื ืืชืืื) : the seller fails in their obligations when they hand over a property that does not have the qualities necessary for its normal use, or that does not match what was agreed. In practice, two categories of problems recur:
material defects: water infiltration, dampness under the tiling, cracks, faulty plumbing or electrical installations;
legal defects, foremost among them construction irregularities (Harigot Bniya โ ืืจืืืืช ืื ืืื) : an added room, an enclosed balcony, or a converted floor without a building permit (Heter Bniya โ ืืืชืจ ืื ืืื).
II. What the "as is" clause covers, and what it does not cover
The law distinguishes three situations.
The defect known to the buyer
The buyer cannot complain about a defect they knew of when signing. A defect described in black and white in the contract will therefore give rise to no recourse.
The hidden defect, unknown to all
The hidden defect (Pgam Nistar โ ืคืื ื ืกืชืจ) is one that a reasonable examination could not have detected. The law allows the buyer to invoke it if they notify the seller as soon as it is discovered. But this rule is not mandatory: when the seller themselves was unaware of the defect, through no negligence on their part, the "as is" clause can exclude it. This is its true scope.
The defect concealed in silence
This is the essential rule. When the defect stems from facts that the seller knew, or should have known, and did not disclose, the buyer can invoke it "notwithstanding any agreement," provided they notify the seller as soon as it is discovered. This rule is mandatory: neither the "as is" clause, nor the buyer's statement that they have "checked everything," can exclude it.
Israel's Supreme Court reaffirmed this in 2014 regarding a house sold "as is," part of which had been built without a permit. The buyers had stated in the contract that they had verified the status of the property with the planning authorities, which they had not done. The Court nevertheless upheld the cancellation of the sale and the refund of the price, and, by majority, refused to reduce the buyers' compensation: only the buyer's actual knowledge of the defect releases the seller, not their negligence. Israeli law has thus replaced the maxim "let the buyer beware" with a genuine duty of disclosure (Hovat HaGuilouรฏ โ ืืืืช ืืืืืื), an extension of the requirement of good faith (Tom Lev โ ืชืื ืื) in negotiations.
III. A defect appears after the purchase: the right reflexes
Notify the seller without delay, in writing. The law requires "immediate" notice, describing the defect in reasonably detailed terms and giving the seller the opportunity to come and inspect it. A buyer who delays risks losing their rights.
Have it documented before repairing. Except in an emergency, it is better to have an engineer draw up a technical inspection report, the Bedek Bayit (ืืืง ืืืช), and to keep photos and quotes.
Choose the right remedy. Depending on the severity: repair by the seller, price reduction equal to the loss in value, damages, or, in the most serious cases, cancellation of the sale.
Do not let time run out. A compensation claim is, in principle, time-barred after seven years, but the starting point of this period is open to debate: it is better to act early.
IV. Before signing: turning doubt into clauses
Legal protection does not exempt you from checking. A lawsuit is long and costly, and it will be necessary to prove that the seller knew or should have known. For the buyer, especially one living in France who has visited the property only once or twice:
have the apartment inspected by an independent engineer before signing;
have the building file (Tik Binyan โ ืชืืง ืื ืืื) kept by the municipality reviewed, to compare the approved plans with reality;
ask the building committee (Vaad Bayit โ ืืขื ืืืช) about past incidents and upcoming works;
obtain written statements from the seller: compliance with the permit, absence of any known defect, absence of disputes with neighbors or the municipality.
For the seller, particularly one selling an inherited or long-rented property from abroad, the best protection is transparency. What is disclosed in writing in the contract can no longer be held against them; what is concealed may cost them the sale price.
Conclusion โ Why be assisted by a lawyer regarding hidden defects?
The "as is" clause wrongly reassures the seller and wrongly worries the buyer. What matters is what was checked, disclosed, and put in writing before signing, and then how quickly one reacts when a defect comes to light. The lawyer organizes the checks, drafts the statements that will serve as evidence, and, in case of difficulty, sends the seller the notice required by law before negotiating or taking action.
