Written by: Adv. Noemie Even Ezra Mizrahi
In this case law update, we review a ruling by the Family Affairs Court, which was asked to decide on the validity of an oral agreement between siblings-heirs for the sale of one heir’s rights in an inherited apartment, in the face of a claim for partition of the jointly-owned property. Section 8 of the Israeli Land Law, 5729-1969 (the “Land Law”) provides that “an undertaking to carry out a transaction in real estate requires a written document.” The ruling examines how the parties’ conduct over the years, together with written payment receipts, may establish a binding contractual undertaking even in the absence of a formal, registered agreement.
The Facts
On January 21, 2006, the mother of three siblings passed away, leaving behind an apartment. Under a succession order dated June 13, 2007, the three siblings are heirs in equal shares. The sibling residing in the apartment had lived there with their mother before her passing, and continued to live there afterward. It was only twelve years after the mother’s death, shortly before filing suit, that the sibling seeking partition registered the rights in the apartment in the names of all three heirs in accordance with the succession order (on June 3, 2018), and immediately afterward, on July 2, 2018, filed a claim for partition of the jointly-owned property.
The heart of the dispute is the claim of the sibling residing in the apartment, according to whom the parties had already reached an agreement back in 2002, shortly after the mother’s death, under which he would buy out his siblings’ rights in the apartment, in exchange for various payments made over more than a decade, totaling more than NIS 70,000 to each sibling. In support of his claim, he produced receipts signed in his siblings’ own handwriting acknowledging receipt of various sums (between NIS 10,000 and NIS 30,000 each time) for “consideration for transfer of the apartment,” “waiver of my share in the parents’ apartment,” and “account for my share in the apartment.”
In response, the sibling seeking partition argued that the sums paid did not represent consideration for the sale of his rights, but rather fair use compensation for his brother’s exclusive occupation of the apartment at his expense. He further argued that no explicit sale agreement had ever been signed, that the alleged “purchase price” was neither fixed nor agreed (the resident sibling claiming NIS 70,000 per sibling, while the sister claimed NIS 80,000–90,000 for her share), and that there was in fact no meeting of the minds or sufficient certainty of terms to recognize a binding real estate sale agreement.
The Ruling
Under Section 8 of the Land Law, a real estate transaction requires a written document. The court nonetheless held that a contractual undertaking can be proven through circumstantial evidence and the parties’ conduct, even absent a full, formal written agreement, provided that it demonstrates the parties’ mutual intent to be bound.
The court found the account given by the sibling residing in the apartment - that his siblings’ rights had been sold to him - more plausible and credible than that of the sibling seeking partition, particularly in light of the signed receipts explicitly referring to “consideration for transfer of the apartment” and “waiver of my share in the parents’ apartment,” and his continuous occupation of the apartment for more than 15 years without either sibling ever demanding payment or partition. The court clarified that a contractual undertaking, even if incomplete in some respects - including a final agreed price - may constitute a legitimate defense against a claim for partition of jointly-owned real estate.
In conclusion, the court dismissed the partition claim as filed, ruling that if no further claim is filed by either party within 18 months regarding the rights in the apartment, each of the registered rights-holders would then be entitled to request a partition order. In light of both parties’ years-long failure to formalize registration of the rights in the apartment after the mother’s death, the court ordered each party to bear its own costs.
Our Advice
When an heir continues to live in a property received through inheritance, it is advisable to formalize the relationship between heirs in a clear, written agreement immediately after the deceased’s passing - both regarding registration of rights in accordance with the succession order, and any agreement on sale, waiver of rights, or payment for use of the property. Failing to formalize matters in writing, even among close family members, can lead to prolonged disputes and legal uncertainty for many years afterward. Our firm assists families with drafting estate division agreements and formalizing the registration of real estate rights - contact us before settling matters informally among yourselves.
(TM 3968-07-18, B. v. B. et al., Family Affairs Court in Beer Sheva, Judge Ben Shalo)