- Buying an apartment in Israel
- Contract Structure
The representing lawyers of the parties take an active part in the transaction in order to ensure that the rights are registered in the name of the buyers.
Attorneys must ensure in advance that funds are available in the event that debts are discovered that need to be repaid in order to complete the transfer of rights.
Lawyers must calculate expected taxes to the seller. These amounts should be transferred in trust to a lawyer to ensure that the seller gets certificates of approval.
Usually, the trust money is transferred at the end of the transaction, if the buyer completes the payment of the balance while the seller has not yet received all the necessary approvals to complete the transfer of rights, especially the tax certificates – appreciation tax and municipal approval and improvement levy.
In this case the buyer pays a sum of money agreed in the contract directly to the lawyer, with an understanding that the payment to the lawyer’s bank account is in trust as a payment to the seller for all intents and purposes.
It is important to note that the seller gives an irrevocable instruction to the lawyer to use the trust funds as quickly as possible to pay off any required debt applicable to the seller, in order to obtain the missing certificates. Some state in the body of the contract that the trust attorneys will sign a trust deed in the version attached to the contract, in which the lawyer undertakes to act with trust funds according to the seller’s charges as specified in the contract.