Real Estate Attorney Guide — What You Need to Know Before a Transaction

Why is a Real Estate Attorney Essential for a Property Transaction?

A real estate transaction is one of the most important financial and legal decisions most people make in their lifetime. Whether you are purchasing an apartment, selling a property, participating in an urban renewal project (TAMA 38) or handling the inheritance of real estate, the need for professional legal counsel is critical. An experienced real estate attorney protects you from legal risks, documentation errors, inadequate property inspections, title defects and agreements, and legal disputes that should never have occurred.

Mandelboim, Gur, Witzman-Gur and Partners in Petach Tikva and Ramat Gan has been providing comprehensive legal advice on real estate and property matters since 2008, with a personal and dedicated approach to each client. This guide directs you through everything you need to know before signing a purchase agreement, renovating your property, or beginning any legal process.

Stages of a Real Estate Transaction — What Actually Happens?

Every real estate transaction goes through several stages defined by law and customary practices in Israel. Understanding these stages helps you prepare properly, time your steps, and enjoy a smoother process.

• Stage One: Search and Preliminary Agreement — You find a property that interests you, visit it, check the location, physical condition, surroundings and maintenance. When you and the seller agree on the price in principle, the formal process begins.
• Stage Two: Title Examination and Rights Verification — A real estate attorney examines the title deed (the official registration at the Land Registry), verifies that the seller has the legal right to sell, checks for mortgages, third-party rights, claims or legal issues affecting the property. This is a critical stage that has prevented thousands of lawsuits in the past.
• Stage Three: Purchase Agreement — An attorney drafts or reviews the purchase agreement, the primary legal document describing the transaction terms, price, dates, parties' obligations, conditional terms (such as obtaining a mortgage) and protective clauses. A well-drafted agreement is your first line of defense.
• Stage Four: Additional Inspections — Inspection of building plans, municipal approvals, appreciation tax, acquisition tax, neighbor agreements, condition of common areas if applicable, and any document relevant to the property.
• Stage Five: Transaction Closing — Execution of final documents, transfer of funds, filing a new registration application at the Land Registry, and receipt of a new title deed in the buyer's name.

What Does a Real Estate Transaction Cost? Legal and Government Fees

The price of the property itself is not the only cost you need to factor in. A real estate transaction includes several legal and government costs that are important to understand in advance. These costs vary depending on the property price, its condition (new or resale), and geographic location.

• Appreciation Tax — Tax levied on the difference between the seller's original purchase price and the current sale price. The rate varies depending on years of ownership and property type. Usually, a buyer with a new mortgage may be partially or fully exempt, but this depends on circumstances.
• Acquisition Tax — Tax levied on the buyer at the time of purchase. The rate varies: a first apartment under certain conditions may be exempt or at a lower rate; a second apartment or investment properties are subject to higher rates.
• Registration and Title Fees — Fees paid by the buyer to the Land Registry to register the property in their name. These fees are calculated based on the property's area and price.
• Attorney Fees and Legal Inspections — Legal fees for an attorney's work in drafting an agreement, reviewing documents, providing guidance throughout the process, and preparing the registration application. This typically ranges from a small percentage of the price to a fixed amount, depending on the agreement between the parties.
• Title Insurance and Liability Insurance — Usually the buyer purchases title insurance to protect against future claims. Additionally, liability insurance may be required if the property is used for commercial purposes.
• Engineering Inspections and Audits — If you choose to conduct an engineering inspection (examination of building condition, systems, etc.), this is an additional cost, but it is usually a genuine long-term saving.

Tabo, Tabo Extract, and Property Rights — What Exactly Is It?

One of the most important concepts in a real estate transaction in Israel is the tabo (or tabo extract). This is an official document issued by the Land Registry Office that records the legal ownership of a specific property. The tabo indicates who the rights holder (owner) is, whether there are mortgages or other rights on the property, and additional details such as area, address, plot number, and more.

When you purchase a property, a real estate attorney must check the current tabo in the seller's name. This examination verifies several critical matters:

• That the seller is indeed the rights holder of the property (and not someone else).
• That there are no mortgages or third-party rights on the property (unless otherwise agreed in the contract).
• That there are no pending legal claims against the property.
• That the area and definition of the property match what is stated in the contract.

After the transaction closes, the Land Registry Office issues a new tabo in the buyer's name. This tabo is your legal proof of ownership of the property.

Purchase Agreement — The Essential Legal Document

The purchase agreement is the binding legal contract between buyer and seller. This agreement describes all the transaction conditions, including:

• The parties — the names of the buyer and seller exactly as they appear in identity documents.
• Property description — accurate address, area, plot number, building number, apartment number, and any relevant detail.
• Price and payment terms — the final price, payment dates (for example: part upon signing, part upon closing), and any special payment conditions.
• Closing date — the date on which ownership transfers from seller to buyer.
• Conditional terms — for example, obtaining a mortgage, obtaining municipal approval, or any other condition important to the parties.
• Party obligations — what the seller must do (for example, vacate the property, fix certain issues), and what the buyer must do (for example, pay on time, complete inspections).
• Protection clauses — clauses that protect both parties in case of non-performance or transaction cancellation.

A good purchase agreement differs from a poor one in small details that can have major legal consequences. Therefore, an experienced real estate attorney is very important.

Common Legal Risks in Real Estate Transactions

Even if everything appears in order, there are legal risks that may arise during a transaction or even after it. Below are the most common risks:

• Tabo issues or rights problems — a property subject to a legal claim, or a mortgage that was not properly removed, or a third party's right (for example, a right of use or a right of way). These can affect your ownership in the future.
• Non-compliance with contract terms — a buyer who did not receive a mortgage as promised, or a seller who did not vacate the property on time. This can lead to a lawsuit.
• Construction or planning issues — illegal construction, lack of municipal permits, or deviation from approved plans. This may result in demolition or fines.
• Family disputes or inheritance — if the property is involved in a divorce or inheritance claim, the process may be delayed or complicated.
• Tax payment issues — unpaid appreciation tax or purchase tax that was not properly settled can lead to a claim from the state.
• Breaches of agreements with neighbors or homeowner associations — if the property is an apartment in a condominium, there may be issues with homeowner association fees, agreements for repairs or renovations, or more.

Comparison: Buyer vs. Seller — What Each Party Needs to Know?

A buyer and seller are on opposite sides of the transaction, and each faces different risks and legal obligations. Here is a comparison:

It is highly important for both parties to work with an experienced real estate attorney to protect their rights and avoid disputes.

How to Choose a Real Estate Attorney? Questions to Ask

Choosing the right real estate attorney is the first and most important step in a transaction. Here are questions you should ask before deciding:

• "How many years of experience do you have in real estate transactions?" — Look for an attorney with at least several years of experience in this field. Mandelbaum, Gur, Witzman-Gur & Co. has been providing real estate services since 2008.
• "Do you handle the type of property I am purchasing?" — If you are buying a first apartment, family home, commercial property, or a property in a renovation project, ensure the attorney has experience in this area.
• "What does your fee include?" — Understand exactly what is covered: contract drafting, document review, office closing, tax advice? It makes a difference.
• "What is your timeline?" — Ensure the attorney can complete the work within your timeframe.
• "Can you provide references from previous clients?" — A good attorney will not object to providing references.
• "Do you offer an initial consultation at no cost?" — Mandelbaum, Gur, Witzman-Gur & Co. provides a free initial consultation so you can experience our service and decide if it is right for you.

Practical Tips Before Signing a Purchase Agreement

Before signing a purchase agreement, take time to do the following. This will save you trouble in the future:

• Check the land registry certificate (Taboo) yourself — Visit the land registry office or digital station, and obtain a copy of the current Taboo. Have your attorney review it.
• Visit the property more than once — Visit during day and night, on different days, to get a real feel for the location and property.
• Ask the neighbors — Speak with nearby neighbors. They can provide you with valuable information about the property, other neighbors, noise, construction issues, or more.
• Check municipal plans — Visit the relevant municipality, confirm there are no plans for major construction nearby, or changes in land use.
• Obtain an independent appraisal — If you are buying, consider hiring an independent appraiser to assess the property's value. This will help you understand if the price is fair.
• Check common area fees (if applicable) — If you are buying an apartment, check the monthly common area fees, the status of the maintenance fund, and if there are plans for major renovations.
• Read the agreement carefully — Do not sign an agreement you do not fully understand. Ask questions. If something is unclear, ask your attorney to explain.
• Obtain legal advice before signing — This is the time to modify contract terms if needed, not after you sign.

Typical Transaction Costs — General Range

Costs in real estate transactions vary depending on the property type, price, and location. Here is a general range of costs you should be aware of:

• Capital gains tax — Usually between 5% and 30% of the profit (the difference between the seller's purchase price and the current selling price), depending on years of ownership. In some cases, there is an exemption or discount.
• Purchase tax — Usually between 0% (first apartment under certain conditions) and 8% of the purchase price (additional properties or investments).
• Registration and land registry fees — Usually between 1,000 NIS and 5,000 NIS, depending on the property's area and price.
• Attorney's legal fees — Usually between 0.5% and 1.5% of the property price, or a fixed amount by agreement between the parties. Check with your attorney in advance.
• Inspections and appraisals — An engineering inspection can cost between 1,500 NIS and 5,000 NIS. An appraisal between 500 NIS and 2,000 NIS.

It is important to budget so that you include all these costs, not just the property price itself.