blog.cat.realestate8 min read9/26/2026

Developer Delays Apartment Delivery: When Compensation Is Paid Without Proof of Damage

The buyer is not required to prove that they actually rented accommodation or suffered any other financial loss. However, the amount of compensation must still be substantiated by the rental value of a comparable apartment, and the calculation rules depend on the date the contract was signed.

Numbers and facts

•July 7, 2022 — effective date of Amendment No. 9
•More than 1 month of delay — threshold for new contracts
•100% of rent — until the end of the 4th month
•125% of rent — for months 5–10
•150% of rent — from the 11th month

First, Check the Contract Date

Amendment No. 9 to the Sale (Apartments) Law, 1973 applies to contracts signed from July 7, 2022. Under such contracts, the right to compensation arises if the apartment is not made available to the buyer after one month has elapsed from the contractual delivery date. The first month of delay is not compensated: the calculation begins after it ends, and every subsequent full or partial month is included. Contracts entered into earlier are governed by the previous version of the law, which has a different threshold and different multipliers.

There Is No Need to Prove Damage, but the Rental Value Must Be Substantiated

Section 5A of the Sale (Apartments) Law expressly provides for compensation without proof of damage. Therefore, the absence of a rental agreement, hotel receipts, or proof of staying with relatives does not in itself deprive the buyer of compensation. However, the amount is linked to the rent for an apartment comparable in size and location, so the dispute usually shifts to its market rental value. Useful evidence includes rental listings for similar properties, information about the neighborhood and the apartment’s characteristics, and, where valuations differ substantially, a professional appraisal.

How Compensation Increases

After the first month has elapsed and until the end of the fourth month of delay, an amount equal to the rent for a comparable apartment is paid. For the fifth through tenth months, a multiplier of 125% applies, and from the eleventh month onward, 150% applies. If the contract provides for higher compensation for delay, the higher amount applies. Under the law, payment must be made at the end of each month for that month, not only after the apartment is actually delivered.

Which Clauses May Protect the Developer

For contracts covered by Amendment No. 9, compensation does not accrue if the delay was caused exclusively by an act or omission of the buyer. The second exception is circumstances satisfying the conditions of Section 18(a) of the Contracts (Remedies for Breach of Contract) Law, 1970, meaning a situation involving legal frustration of contract performance. A general clause in the contract giving the developer the right to unilaterally declare that a delay was beyond its control does not override the law: its provisions may be varied only in the buyer’s favor. A position paper by the Commissioner under the Sale (Apartments) Law, published before Amendment No. 9, specifically noted that delays by the municipality, the electric company, the water corporation, the contractor, the architect, or another professional should not in themselves be shifted onto the buyer.

What to Prepare Before Making a Demand or Filing a Claim

Gather the signed contract with all appendices and the exact delivery date, as well as documents concerning any agreed extensions. Keep the developer’s messages, work schedules, delay notices, and responses to your demands. Record the date on which the apartment was actually made available: the delivery invitation, protocol, and correspondence about the keys will be useful. Separately, prepare information on the rental value of genuinely comparable apartments and documents refuting any claim that the delay was caused by your alterations, late payments, or absence from the handover. When calculating compensation, divide the delay according to the statutory periods and separately identify partial months.

FAQ

Must I rent another apartment to receive compensation?

No. Section 5A provides for payment without proof of actual damage, so a rental agreement is not a mandatory condition. However, it is necessary to substantiate the rental value of an apartment comparable in size and location.

Is compensation paid for the first month of delay?

For contracts signed from July 7, 2022, the first month is not compensated. If the delay lasts longer than one month, compensation is calculated for the period after the end of the first month, including part of the subsequent month.

What applies if the contract was signed before July 7, 2022?

The previous version of Section 5A applies. Under it, the right arose after a delay exceeding 60 days, but compensation was calculated from the contractual delivery date: 150% of the rent for a comparable apartment for the first eight months and 125% from the ninth month onward.

Can the developer rely on the municipality or a contractor?

A mere reference to a delay involving a permit, connection, or contractor’s work does not by itself resolve the dispute. In the official position of the Commissioner under the Sale (Apartments) Law, such circumstances were not considered grounds for shifting the consequences onto the buyer; however, the specific contract and the applicable version of the law must be examined separately.

What will be examined in a dispute over compensation?

The key factors will be the contract signing date, the contractual and actual delivery dates, the duration of the delay, and the rental value of a comparable property. Causation will also be examined: whether the delay was caused exclusively by the buyer or whether the conditions for legal frustration of contract performance existed.

What to do next

Begin by determining the applicable version of the law and preparing a month-by-month calculation from the contractual delivery date to the actual delivery. Then send the developer a written demand with the contract, a chronology, evidence of rental value, and a response to the stated reasons for the delay. If the parties dispute the cause or amount of payment, the documents should be reviewed before going to court.