Guide to Construction Defects Claims During the Warranty Year

What is the Warranty Year and Construction Defects?

The warranty year is a 12-month period from the date of apartment acceptance from the contractor, during which the buyer may claim any construction defects discovered. Construction defects are deviations from contract conditions, building plans, facilities that were functioning at the time of acceptance, or measurement accuracy. This is a legal right that protects buyers from negligent or improper construction.

In Israel, consumer protection laws and insurance laws provide significant protection to new apartment buyers during this period. However, proving the defect, the economic value of the repair, and the legal argument require in-depth legal knowledge and experience in such claims.

Why is it Important to Claim During the Warranty Year?

The warranty year is the sole legal window in which the buyer can sue the contractor directly for construction defects without proving negligence or design defect. After one year, the buyer loses the direct right and must prove negligence or fundamental defect – which is much more difficult. Additionally, untreated defects may worsen over time, leading to moisture damage, developing cracks, and structural issues that will significantly increase repair costs.

During this period, the contractor is legally obligated to repair defects at their own expense or pay economic compensation. This is the buyer's opportunity to protect their rights and ensure that their apartment meets the required standards.

What Constitutes a Construction Defect?

A construction defect is not merely a minor issue. It must be a deviation from the standard or contract that is material, measurable, and capable of repair. Classic examples include:

• Facility defects: Leaking pipes, non-functioning electrical outlets, air conditioner that doesn't cool, door that doesn't close properly.
• Finishing and coating issues: Loose ceramic tiles, peeling paint, plaster that fell off, uneven floor.
• Deviations in volume and dimensions: Room smaller than stated in the contract, ceiling height lower than the plan, window of different size.
• Structural issues: Cracks in walls, moisture, problems with thermal or acoustic insulation.
• Missing guaranteed fixtures: Shower enclosure not installed, mirror not hung, door handles missing.

All of these are considered legal defects, provided they can be proven by evidence, photographs, engineer or expert reports, and determination of the economic value of the repair.

Buyer's Rights During the Inspection Year

The law grants a buyer of a new apartment several essential rights during the inspection year period. First, a buyer can demand that the contractor repair any defect discovered during the year, at the contractor's expense. This is a direct right that does not require proof of negligence or design defect – it is sufficient to prove that there is a deviation from the standard or the contract.

Second, if the contractor refuses to repair or does not repair within a reasonable time, the buyer can sue for monetary compensation equal to the cost of repair or the depreciation in the apartment's value. In some cases, the court also awards additional compensation for inconvenience or discomfort in using the apartment.

Third, the buyer is entitled to hire an engineer or construction expert at the contractor's expense to inspect the apartment and issue an expert report. This report is a strong legal tool in court.

Fourth, the buyer can take preserving measures – for example, not pay the balance of the price or withhold funds in an escrow account – to pressure the contractor to repair the defects. However, this step requires careful legal consultation.

How to Prove a Construction Defect?

Proving a construction defect requires a combination of strong evidence and precise legal argument. First, visual documentation: detailed video and photographs of the defect from multiple angles, images of damage or the flaw, with a brief description written next to each image. These photographs should be accurate and clear, so the court can understand exactly what the problem is.

Second, a professional expert report: a licensed engineer or construction expert examines the apartment, documents the defects in writing, and estimates the cost of repair. This report is very strong evidence in court because it is based on professional inspection.

Third, invoices and price quotes: obtain quotes from licensed contractors for repairing the defect. This proves the economic value of the damage and helps in calculating compensation.

Fourth, written evidence: notes in the apartment handover report (every buyer should document defects in the receipt report), letters to the contractor, WhatsApp or email notifications. All of these testify that the buyer reported the defect within a reasonable time.

Fifth, witness testimony: if there are witnesses who can testify that they saw the defect themselves (family, friends, an expert who visited the apartment), this strengthens the claim.

Litigation Costs and Compensation Ranges

Litigation costs vary depending on the size of the defect, the complexity of the evidence, and whether a settlement is reached or the case goes to court. Typically, repairing a minor defect (for example, a non-functioning electrical outlet) costs a few hundred shekels, while repairing a major defect (for example, an insulation or wall issue) can cost thousands of shekels.

Compensation ranges in court depend on the judge's assessment. Typically, in claims for construction defects, the compensation equals the cost of repair or the depreciation in the apartment's value – whichever is higher. In cases of substantial defects that affected quality of life, the court may also award additional compensation for inconvenience or discomfort.

It is important to note: each case is examined on its merits, and the assessment depends on the specific facts, the evidence presented, and the judge's discretion. There is no fixed formula or guaranteed percentage.

Strong Legal Arguments in Construction Defect Claims

To succeed in a claim, the attorney must present clear and focused legal arguments. First, the Consumer Protection Law: the contractor must provide an apartment that meets the building standard and the contract. Any deviation is a violation of the law, and the buyer is entitled to compensation.

Second, the principle of "a fit apartment": the court requires the contractor to provide an apartment that is fit for use and safe. Defects that affect safety or usability (such as dampness, electrical problems, structural issues) are considered a serious breach.

Third, the principle of "burden of proof on the contractor": typically, the contractor must prove that the apartment meets the standard. If he cannot prove this, the court is convinced that there is a defect.

Fourth, the principle of "depreciation in value": if the defect cannot be fully repaired, or if the repair is too expensive, the court can award compensation according to the depreciation in the apartment's value in the real estate market.

Fifth, the principle of "failure to meet reasonable time": if the contractor promised to repair but did not do so within a reasonable time (typically a few weeks), this is considered a continuing breach, and the court may award compensation for the inconvenience caused.

Comparison: Direct Repair vs. Legal Action

A buyer who discovers defects during the inspection year has two main options: direct repair by the contractor, or legal action. Let's examine the differences:

Generally, it is recommended to start with a written notice to the contractor and attempt a settlement. Only if the contractor refuses or fails to cooperate is there justification to go to court. However, it is important not to delay too long – the inspection year is shortening, and a claim must be filed before the right of action expires.

Mistakes to Avoid

Buyers who claim construction defects often make mistakes that weaken their case. First, they wait too long: if a buyer does not report the defect during the inspection year or does not file a claim before the year expires, they lose the right. This is a critical mistake.

Second, they do not properly document the defects: worn, unclear, or inappropriate photographs will not help in court. It is worth investing in professional photography or an expert report.

Third, filing a claim without an expert report: in court, a construction or engineering expert report is a critical tool. A buyer who goes to court without such a report may lose, because the court cannot rely on general claims.

Fourth, excessive demands: if a buyer demands compensation that does not match the value of the defect, the contractor may refuse to settle and go to court. A refined argument based on expert assessments is more convincing.

Fifth, discarding evidence: a buyer who deletes photographs, does not keep letters, or does not retain the contractor's acceptance report may lose important tools for proof.

Legal Advice and Representation in Construction Defect Claims

A claim for construction defects during the inspection year requires in-depth legal knowledge, experience with similar claims, and the ability to document and argue effectively. Mandelbaum, Gor, Yitzhak-Gor & Co. has over 18 years of experience representing buyers in such claims. We specialize in real estate law, commercial law, and civil litigation – knowledge essential for construction defect claims.

When you come to us, we:

• Review your documentation: Purchase agreement, inspection report, photographs, letters to the contractor, any evidence you have.
• Assess the chances of success: Based on the facts, we will evaluate the prospects of the claim and propose a strategy.
• Coordinate an expert report: We work with licensed engineers and qualified construction experts, ensuring a high-quality and accurate report.
• Send notice to the contractor: A formal legal letter detailing the defects and demanding correction, with a reasonable timeframe.
• Negotiation: We will attempt to settle with the contractor or his insurance, to avoid a lengthy lawsuit.
• Filing a claim: If settlement is not possible, we will file a claim in the district court and represent you through final judgment.

Our office is located in Ramat Gan and serves buyers from the Central Region and throughout Israel. First consultation is free of charge – you can discuss your claim, the evidence you have, and the recommended way forward.