The State of Israel v. Aprofim Housing and Enterprise (1991) Ltd. (1995) 49(ii) P.D. 265

In 1990, following the wave of immigration from the former Soviet Union at the end of the 80's, the Government decided to promote construction of apartments for new immigrants and other persons entitled to government housing aid. A plan was drawn up whereby land would be allocated to contractors for building purposes by the Israel Lands Authority, while the Housing Ministry (hereinafter, “the Appellant”) undertook to purchase the apartments from the contractors after construction.

A standard form agreement was drawn up which served as the basis for the contracts signed between the Appellant and the various building contractors and entrepreneurs. The Appellant undertook in these contracts to purchase from the contractor, upon request, any apartments which had been built but not sold on the open market. In desirable locations, the Appellant was under an obligation to purchase up to 50% of the apartments built. In development areas the Appellant was bound to purchase all of the apartments. The contractor was entitled to demand that the Appellant exercise its obligation to purchase the apartments in the desirable locations, at the earliest, on completion of construction; whereas, in the case of apartments in the development areas the contractor could make its demand on completion of the frame and internal walls of the building. The contract did not limit the time in which the contractor had to present its demand for performance of the obligation to purchase, but any delay in presenting a demand beyond the times stated would influence the contractor's right to receive the full price for the apartments from the Appellant.