How a French Buyer Safely Purchased a Netanya Apartment Still Registered to a Dead Owner

Result: A French buyer completed a NIS 3.2M Netanya purchase from an undistributed estate, fully protected throughout by a caveat and escrowed deposit · Timeline: 9 months · Challenge: Title still registered to a deceased owner · Authority: Land Registry and the Inheritance Registrar · Financial Impact: NIS 3.2M

Background

A couple in Paris had spent two years looking for a holiday apartment in Netanya, somewhere they could use in summer and eventually retire to. They found it: a three-room apartment a short walk from the seafront, agreed a price of NIS 3,200,000 with the seller, and signed a short preliminary memorandum (zikaron devarim) to hold the deal while contracts were drawn. They wired a goodwill payment and felt the hard part was over.

It was not. When we ran the title search before drafting the purchase agreement, the Land Registry extract (nesach tabu) showed the apartment was not registered to the seller at all. It was still in the name of his late mother, who had died three years earlier. There was no Israeli succession order, no will execution order, and no registration of the heirs. The man selling the apartment was one of three siblings who between them had inherited it, but on paper none of them owned a thing they could sell.

The Challenge

You cannot transfer Israeli real estate out of a dead person's name. Until the heirs obtain a succession order (tzav yerusha) from the Inheritance Registrar and register themselves on the title, the apartment legally belongs to the estate, and a contract signed by one sibling alone is worth very little. Had the buyers paid over the price against that title, they would have handed NIS 3.2M to a man who could not deliver what he was selling, and their only remedy would have been a lawsuit in an Israeli court from Paris.

There were layers to it. All three siblings had to agree to sell and to the price, because an apartment owned in undivided shares cannot be sold by one co-owner acting alone. One sibling lived in Israel, one in France, and one in Canada. The succession order itself had to be obtained before anything could be registered. And the buyers, sitting in Paris, could not attend a single signing, a single bank meeting, or the Land Registry in person.

The temptation in these situations is to walk away. But the apartment was the right one, the family genuinely wanted to sell, and the title defect was curable. The job was to protect the buyers' money and their priority on the property while the curing happened, and to make completion conditional on the title actually being fixed.

In Practice: Under Sections 126 to 128 of the Land Law 1969, a buyer may register a caveat (he'arat azhara) against a property to record a contractual right to be registered as owner, blocking any competing sale or charge. Registering a caveat at the Netanya Land Registry costs a nominal fee of roughly NIS 160 and takes a few days. That caveat is what protected our clients' priority for the months it took the heirs to obtain their succession order.

What We Did

The buyers signed a notarised, apostilled power of attorney in Paris, in French and Hebrew, appointing our office to handle the purchase. That let us sign, register, and pay on their behalf without them flying over.

We tore up the idea of a normal contract and built a phased one instead. The buyers would pay only a limited first instalment, around 7% of the price, into a lawyer's trust account (ne'emanut) rather than to the seller. The balance was tied to milestones: registration of the succession order, registration of all three siblings as owners, and delivery of clean title. If the heirs failed to obtain and register the order within an agreed window, the buyers could cancel and recover their deposit, with the caveat standing as security in the meantime.

We registered the caveat immediately on signing the full purchase agreement, which all three siblings signed (the French and Canadian siblings under their own apostilled powers of attorney to the Israeli sibling's lawyer). From that moment the buyers had priority: the family could not sell the apartment to anyone else, mortgage it, or let a creditor attach it ahead of our clients.

In parallel, we pushed the succession order through. The mother had died an Israeli resident, so the Inheritance Registrar in Israel had jurisdiction. We filed the application, served the statutory notices, and obtained the order naming the three siblings as heirs in equal shares. We then registered the order on the title, so for the first time the three siblings appeared as the legal owners, and only then triggered the main payment and the transfer into the buyers' names.

In Practice: A non-resident buyer of a single Israeli apartment who owns property abroad pays purchase tax (mas rechisha) at the higher 8% band on the first roughly NIS 6.05M of value, under the Real Estate Taxation Law 1963 and its regulations. On this NIS 3.2M purchase that came to NIS 256,000, payable to the Israel Tax Authority within 60 days of signing the binding agreement. We filed the declaration and paid on time, which kept the transfer moving and avoided arrears interest.

The Outcome

The succession order was granted and registered about four months after the buyers first signed, and the full transfer into their names completed at nine months from first instruction. The buyers paid their NIS 3.2M only once the three siblings were registered owners able to convey clean title, with their deposit held safely in trust and their priority locked by the caveat the entire time.

The Paris couple now hold the apartment outright, registered in their names at the Netanya Land Registry, with the purchase tax paid and the file closed. They visited Israel once, after completion, to collect the keys. At no point was their money exposed to a seller who could not deliver, which is exactly what would have happened had they paid against the original deceased-owner title.

Key Takeaways

What this case illustrates for non-residents in similar situations:

1. Always read the Land Registry extract before you pay anything. A title still in a deceased owner's name, or showing co-owners who are not all at the table, is a deal you cannot complete as drafted. The cheap title search is what prevented a NIS 3.2M mistake here.
2. Property held by an estate cannot be sold until the heirs obtain a succession order and register themselves. A contract signed by one heir alone, before the order, gives you almost nothing. Read more in our guide to buying property in Israel as a French resident.
3. A caveat is your protection while title is being fixed. Registered under the Land Law 1969, it blocks competing sales and charges and holds your priority for the months a succession order takes.
4. Phase the payments and use a trust account. Tying the balance to registration milestones, with the deposit held in escrow, means you never overpay against a title that is not yet clean.
5. The whole purchase runs on a power of attorney. The buyers signed, paid, and registered a Netanya apartment from Paris and saw it only after the keys were theirs. For more, see buying Israeli property by power of attorney without visiting.

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Facing a Similar Situation?

If you are buying Israeli property and the title is not as clean as the seller suggested, whether it sits in a deceased owner's name, shows undivided co-owners, or carries an old charge, the deal is often saveable with the right structure. The key is to protect your money and your priority before you pay.

Contact us for a confidential consultation about your Israeli legal matter.