Decision details
| Date | 2019 |
|---|---|
| Court | Haifa District Court |
| Case | Civil Claim 13092-01-16 |
| Type of decision | Judgment |
| Amount | NIS 15,000 |
| Topic | Mortgage: conflicting transactions, the bank's duty to inquire |
| Source | Source |
Background and facts: conflicting transactions in an apartment and a pledge in favor of Mizrahi Tefahot
The details here are based on a report on the mako website of October 24, 2019, written in cooperation with the Psakdin website. The full text of the judgment was not found openly online. According to the report, the judgment was given in the Haifa District Court, by Judge Daoud Mazen. The case number, as it appears in the link to the judgment in the article, is 13092-01-16.
According to the report, a single mother bought an Amidar apartment in 2003. She did not register a cautionary note and was not registered as the owner with Amidar. About three years later, a couple bought the same apartment from the previous owners, and took a mortgage from Mizrahi Tefahot.
In 2015, the couple did not keep up with the mortgage payments, and the bank acted to enforce the pledge. The mother, who lived in the apartment, filed a claim for a declaration that she is the owner of the apartment.
The parties' arguments
According to the plaintiff, she bought the apartment lawfully, three years before the couple. The bank argued that the plaintiff herself caused the problem, because she did not register her rights. According to the bank, it could not have known about them before approving the mortgage, and so its pledge prevails.
What the court decided: the bank did not act in good faith
According to the report, the court held that the plaintiff's earlier transaction prevails. It was held that the bank was negligent and acted in bad faith, because it ignored warning signs.
The report lists the signs the court pointed to:
- The couple were registered as owners even before they paid the full consideration.
- There was a family connection between the couple and the sellers.
- The plaintiff lived in the apartment.
- The bank received a lawyer's letter describing her as a tenant, without asking for the lease agreement or a sworn statement.
The claim was allowed. According to the report, the bank was ordered to pay legal costs and attorney's fees of NIS 15,000.
What it means for Mizrahi Tefahot customers
According to the judgment as reported, a bank registering a pledge on an apartment is required to check the actual state of the rights, including who holds the property. A general letter does not replace an examination when there are suspicious signs. A person who holds an apartment and did not register his rights is exposed to risk, which is why registering a cautionary note is important.
Further rulings on mortgages and enforcement appear in the rulings database and on the page Civil Claim 2311-06 Yeshinovsky: scope of mortgage enforcement.
Sources
Status and caution
The full text was not found openly online; details according to a report, not yet verified against the text of the decision
More court rulings against Mizrahi Tefahot on mortgages and housing loans
- Early repayment fee on a multi-track mortgage: Mizrahi Tefahot will pay NIS 5.5 million in a settlement
- Civil Claim 50131-09-22 Zaghroun: Mizrahi Tefahot was negligent with a mortgage, and the customer lost an Israel Land Authority tender
- Class Action 41639-12-17 Shif: Mizrahi Tefahot will refund interest differences to variable-rate mortgage borrowers and grant a future discount
- Civil Claim 2311-06 Yeshinovsky: Mizrahi Tefahot may enforce only half of the cottage
- Early repayment fee on a "supplementary loan": Mizrahi Tefahot will refund overcharged fees
All 39 decisions in the database ›
Questions and answers
What happens when the same apartment is sold to two buyers and one of them took a mortgage from Mizrahi Tefahot?
In the judgment reported on mako, it was held that the first buyer's right prevails over the bank's pledge, because the bank was negligent and did not act in good faith.
Which warning signs did the bank ignore?
According to the report: the buyers were registered as owners before full payment, there was a family connection with the sellers, the plaintiff lived in the apartment, and the bank made do with a lawyer's letter describing her as a tenant.
How much was the bank ordered to pay?
According to the report, legal costs and attorney's fees of NIS 15,000.
Did not registering a cautionary note harm the plaintiff?
The bank argued so, but the court held, according to the report, that her right prevails in the circumstances of the case.
Where can I read the full text?
The full text was not found openly online. You can search for it by case number in the Net HaMishpat database of the Israeli Judiciary.