This article addresses buying an Israeli apartment and a memorandum of understanding during the process.
Registration for real estate goes through the Israeli Land Registration department, and this department is under the Israeli Ministry of Justice. We provide a number of articles on various real estate issues on our website for the benefit of our clients. These articles include topics like mortgages, warning notices, taxes when purchasing an apartment, the land registry extract, and more. Buying an Israeli Apartment and a Memorandum of Understanding
When people are interested in purchasing an apartment in Israel, sellers might press the buyer to sign a memorandum of understanding (zichron dvarim in Hebrew). While a memorandum of understanding seems like an informal document saying that the person intends to buy the property for a certain cost or under particular conditions, it is important to note that this document is legally binding in Israel. As a result, any memorandum of understanding about a real estate transaction needs to be reported to the Israeli Tax Authority.
What memorandums of understanding often fail to do is include important details about the real estate transaction, which buyers do not often anticipate. Lawyers generally advise their clients not to sign a memorandum of understanding with a seller or broker, as all conditions and terms should be set with a lawyer in order to avoid legal problems in the future.
In any legal transaction related to real estate, both the seller and the buyer have particular rights and responsibilities. It is important to retain legal assistance, for the buyer and the seller separately, to ensure that the lawyer is working in your particular interests and ensuring that all the proper regulations and specifications are followed.
When a Memorandum of Understanding in Israel May Be Used
In the event that the parties are in a hurry and wish to secure the purchase before signing the formal contract for special reasons, then they should only sign a memorandum of understanding in Israel after consulting with a lawyer.
We hope that this article on buying an Israeli apartment and a memorandum of understanding was helpful. If you seek to buy or sell property in Israel, feel free to contact us. We would be happy to help with your real estate needs.