Guide: 10 Mandatory Checks Before a Sales Contract

Why Legal Inspections Before a Purchase Agreement Are Critical

Buying an apartment or property is one of the largest financial decisions of your life. At the same time, it is also a complex legal transaction involving legal inspections, mortgage checks, land registry inspections, and handling of extensive official documentation. Errors or omissions at this stage could leave you with unexpected liabilities, limited rights, or even substantial financial losses that are very difficult to correct after signing the purchase agreement.

With over 18 years of experience representing real estate and property matters, Mandelbaum, Gor, Witzman-Gor and Partners Law Firm in Ramat Gan understands the risks. On this page, we present to you 10 mandatory inspections that every smart buyer should conduct — a legal checklist that will make you a conscious and disciplined buyer.

Apartment Purchase Checklist: 10 Essential Legal Inspections

Each inspection on this checklist is designed to strengthen your legal position, clarify your rights and obligations, and avoid costly surprises. Let us go through each one in detail:

1. Land Registry Inspection and Land Registry Extract — The Legal Foundation

The land registry inspection is the first and most mandatory inspection. The land registry (property registration at the national land registry office) defines who is the official owner of the property, what the encumbrances are (mortgages, third-party rights), and what is the legal status of the property. An updated land registry extract shows the status of the property as recorded in the official registry.

In this extract you will be able to identify:

• Existing mortgages (and from whom) — it is critical to know that they will be removed before transfer or settled by prior agreement
• Third-party rights (for example, a neighbor's right of use, right of way)
• Appeals or requests in legal proceedings that could affect ownership
• Status of building permits and the property's compliance from an engineering and public perspective

Do not rely on what the seller or agent tells you — request an official land registry extract directly from the land registry office (or through a lawyer). This is a mandatory legal inspection that cannot be overlooked.

2. Mortgage Inspection and Legal Obligations on the Property

Existing mortgages on the property are first in line to receive money from the sale — before you. If there are mortgages that are not settled, they must be resolved before closing the transaction. This legal inspection includes:

• A list of all mortgages registered in the land registry
• Outstanding debt balances in each mortgage (from the lending bank or the seller's lawyer)
• Settlement terms — will the seller settle them from the sale proceeds? Is there a written agreement?
• Verification that there are no municipal taxes, government taxes, or government levies on the property

An unsettled mortgage or unsettled tax debt could turn your property into a foreclosure asset — a situation where your property is at risk.

3. Capital Gains Tax Inspection and Calculation of Expected Payment

Capital gains tax is a tax that is due when a property is sold at a gain from the price at which it was previously purchased. It is a mandatory tax payment to the tax authorities, and its calculation can be complex. This legal inspection includes:

• Determination of the original purchase price (from the land registry extract or the seller's documents)
• Calculation of the gain (difference between the sale price and the original purchase price)
• The applicable tax rate (varies depending on the holding period and other conditions)
• Identification of exemptions or discounts if the seller is entitled to them (for example, owners of shared apartments in TAMA 38 may be exempt)

An inaccurate capital gains tax calculation could lead to subsequent claims by the tax authority. Proper legal inspection will protect both sides.

4. Purchase Tax Inspection (Property Tax)

As a buyer, you are required to pay purchase tax (property tax) to the tax authority. The tax rate varies depending on the type of property, its value, and the buyer's status (for example, a first-time buyer may be entitled to a discount or partial exemption). This legal inspection includes:

• Accurate calculation of purchase tax in accordance with the law
• Identification of discounts or exemptions you are entitled to (first-time buyer, social housing, TAMA 38, etc.)
• Understanding of installment payments or lump-sum payment
• Assessment of the impact of purchase tax on your cash flow

Purchase tax is a mandatory legal payment, and non-payment or inaccurate payment will result in legal issues with the authorities.

5. Validity and Legality of the Purchase Agreement Inspection

Before you sign the purchase agreement, a mandatory legal inspection includes:

• Verification that the seller is the official owner (from an updated land registry extract)
• Verification that the seller has legal capacity (not under guardianship, not in liquidation proceedings, not in legal debt that prevents sale)
• Inspection of the terms in the agreement — all agreed terms must be in writing in the purchase agreement
• Identification of conditional terms (for example, settlement of mortgages, obtaining a building permit, completion of files at the municipality)
• Inspection of payment dates, transfer deadlines, and seller's obligations (for example, vacating the apartment on time)

A purchase agreement that is not drafted carefully could leave you without adequate legal protection.

6. Permits, Licenses, and Building Compliance Inspection

If the property includes improvements, expansions, or alterations (for example, adding a room, change of use, adding a closed balcony), this legal inspection is critical:

• Verification that there is a valid building permit for all work (from the municipality or the Ministry of Interior)
• Confirmation that the work was performed in accordance with the permit and under supervision by the authorities
• Inspection of a completion certificate (certificate of work completion) from the municipality
• Inspection that there are no illegal or unauthorized works that could lead to a demolition order or fine

Illegal construction work can make a property unsaleable in the future, or lead to legal costs and enforcement of a demolition order.

7. Verification of Existing Tenants and Rental Rights

If the property is rented or occupied by tenants, this legal due diligence check is essential:

• Identification of all tenants or lessees on the property
• Review of the lease agreement (duration, terms, monthly payments)
• Review of tenant rights under the Tenant Protection Law — rights that cannot be easily terminated
• Verification that all rental payments are current and that there are no outstanding disputes between the tenant and owner
• Understanding that you, as the buyer, will inherit all ownership rights and obligations regarding the rented property — including eviction proceedings if you decide to pursue them in the future

Tenants with legal rights can remain on the property even if you wish to vacate them — this is a mandatory check before purchase.

8. Verification of Common Charges and Management Fees in a Multi-Unit Building

If the property is an apartment in a multi-unit building (condominium), this legal due diligence check is critical:

• Review of monthly or annual management fees
• Verification that the seller has paid all outstanding management fees (with confirmation from the building management committee)
• Review of common improvements expenses or future assessments (e.g., roof repair, pipe replacement)
• Review of the building bylaws — rules regarding use of common areas, improvement works, and common obligations
• Review of minutes from recent building meetings (to understand the building's condition and future obligations)

Unpaid common charges of the seller in the building can become your obligations as the buyer — this check will protect you.

9. Verification of Prior Agreements and Contracts That May Affect the Property

This legal due diligence check includes identification of:

• Agreements between the seller and neighbors (e.g., right of way through the property, right to use part of the property)
• Service contracts (e.g., television, internet, electricity) that may be linked to the property
• Agreements with local authorities (e.g., regarding use of parking, green space)
• Prior rights or sale options that may affect future ownership

Such agreements may limit your rights as an owner or lead to legal obligations in the future.

10. Verification of the Seller's Legal Status and Third-Party Rights

This final legal due diligence check includes:

• Verification that the seller is not undergoing liquidation, foreclosure, or legal debt that may affect the sale
• Verification that there are no open legal claims against the seller regarding the property
• Verification that there are no mortgage bank rights, mortgagee claims, or third-party rights that may delay the transfer of the property
• Verification that the seller has full legal capacity to sell (not under guardianship or in legal proceedings that prevent sale)

This check will protect you from situations where the seller may not have full legal rights to sell the property.

Comparative Table: Legal Due Diligence by Purchase Stage

Common Mistakes Buyers Make — and How to Avoid Them

Based on years of experience representing real estate buyers, here are the most common mistakes:

Mistake 1: Relying on Oral Statements from the Seller or Agent

"The seller told me there are no mortgages" or "the agent said the condominium is fine" — this is not sufficient. Every legal due diligence item must be verified in writing, from official documents. Do not rely on verbal promises. Request documents, obtain official confirmations, and verify through an attorney.

Mistake 2: Signing a Sale Agreement Without Legal Review

A sale agreement is a binding legal document. If you sign it without legal review, you forfeit essential legal protections. An attorney will ensure all agreed-upon terms are in writing, there are no contradictions, and you are protected from surprises.

Mistake 3: Failing to Review the Condominium Association

Presumed management fees, unforeseen common area improvement expenses, or condominium bylaws that limit your rights — all of these can affect your life as an owner. A thorough legal review of the condominium association is mandatory in apartment transactions.

Mistake 4: Not Calculating Capital Gains Tax and Purchase Tax Accurately

These taxes can be substantial. If you calculate them yourself or rely on an inaccurate estimate, you may face an unpleasant surprise at payment or later from the tax authority. An attorney or tax consultant knows the precise calculation and applicable exemptions.

Mistake 5: Failing to Verify Existing Tenants

If the property is leased and occupied by tenants, tenant rights under the Tenant Protection Law may be very strong. You cannot simply "evict" a tenant without a lengthy legal process. Legal due diligence will verify tenant rights and help you understand the implications for you as the new owner.

How Mandelboim, Gor, Witzman-Gor & Partners Assists Buyers in Legal Due Diligence

With over 18 years of experience in real estate and property law representation, Mandelboim, Gor, Witzman-Gor & Partners law firm in Ramat Gan understands every aspect of lawful property purchase. We provide:

• Comprehensive legal review of all documents — title registry, sale agreement, agreements, condominium bylaws, and more
• In-depth legal due diligence — mortgages, taxes, permits, tenants, third-party rights
• Step-by-step guidance — we navigate you through every stage of the purchase, from offer to closing
• Full legal protection — we ensure all agreed-upon terms are in writing, there are no contradictions, and you are protected from surprises
• Personal and dedicated service — we adhere to the principle of representing plaintiffs only in tort matters, meaning we focus on protecting your rights as a buyer

We offer a complimentary initial consultation, where we can hear about your situation and provide initial guidance. Whether you are at the beginning of the purchase process or already underway, we are here to help.

How to Get Started: A Practical Legal Checklist

If you are at the beginning of the purchase process or already in the midst of it, here is a practical legal checklist to help you stay organized:

Step 1: Before Making an Offer

• ☐ Request an updated title deed document from the Land Registry or through a real estate agent
• ☐ Review the title deed — who are the registered owners? What mortgages exist?
• ☐ Check municipal permits — are there building permits for all work?
• ☐ Check if there are tenants in the property — if so, request details on the lease agreement
• ☐ Create a list of legal questions you have about the property

Step 2: After an Accepted Offer

• ☐ Arrange with an attorney for a complete legal due diligence examination of the property
• ☐ Request a calculation of capital gains tax and purchase tax
• ☐ Request confirmation from the condominium on accrued management fees (if applicable)
• ☐ Request confirmation from the seller on mortgage clearance
• ☐ Review condominium protocols (if applicable)

Step 3: Before the Purchase Agreement

• ☐ Review the draft purchase agreement with an attorney
• ☐ Ensure that all agreed-upon terms are in writing in the agreement
• ☐ Check the transfer date and seller's obligations
• ☐ Check contingent conditions (if any exist)
• ☐ Ensure that you understand all your expenses (purchase tax, mortgage fees, attorney fees)

Step 4: Before Closing

• ☐ Confirm that mortgages have been cleared (obtain confirmation from the bank)
• ☐ Confirm that accrued management fees have been paid (obtain confirmation from the condominium)
• ☐ Review an updated title deed again — confirm that the property is registered in your name
• ☐ Receive confirmation from your attorney that all legal due diligence examinations have been completed
• ☐ Obtain copies of all legal documents (purchase agreement, title deed, confirmations)

Summary: Legal Due Diligence is Your Best Investment

Purchasing a property is one of the most important decisions in life. Complete legal due diligence examinations before a purchase agreement are not an "option" — they are a necessity. They protect your rights, save you from costly surprises, and ensure that you are purchasing lawfully and with full knowledge of the property.

Mendelboim, Gor, Witzman-Gor & Co. law office in Ramat Gan has over 18 years of experience in real estate and property representation. We understand every aspect of lawful property purchases, and we are here to help you at every step of the process.

If you are at the beginning of the purchase process or already in the midst of it, we offer a complimentary initial consultation. During this consultation, we can listen to your situation, provide you with preliminary legal guidance, and help you understand the next steps.

Contact Mendelboim, Gor, Witzman-Gor & Co. today — ensure that your purchase is legally protected.