ISRAEL Law and Practice Contributed by: Hagit Bavly and Adi Daniel Zamir, Arnon, Tadmor-Levy
the lessor will be required to pay appreciation tax (capital gains), and the tenant will bear the purchase tax. 6.21 Forced Eviction If the lessor terminates the agreement due to breach by the tenant, the lessor may require the tenant to vacate the property; if the tenant does not do so, the lessor may petition the court. This may take several months, and longer if the ten - ant offers substitutional defence arguments. 6.22 Termination by a Third Party Termination of a lease by a third party is very rare. This can happen if a building is declared dangerous, or if the property or any part of it is expropriated for use for public needs, as mentioned previously (see 2.9 Condemnation, Expropriation or Compulsory Purchase ). 6.23 Remedies/Damages for Breach It is customary to stipulate in a commercial lease agreement liquidated damages which the les - sor will be entitled to in the event of a breach and termination of the lease, without detracting from the lessor’s right to claim actual damages. Actual damages may of course be higher than the unpaid rent. Usually, lessors of commercial properties contin - ue to hold the collateral given to them by the ten - ant until a certain (short) period after the lease’s end (usually 60 to 90 days) and are allowed to realise such collateral to cover damages. 7. Construction 7.1 Common Structures Used to Price Construction Projects The consideration in construction contracts is either a pre-agreed fixed sum (allocating the risk
to the contractor) or is calculated by measur - ing the actual quantities of the work performed. Both methods are common. The developer decides whether to use a single contractor, or to engage different contractors for the different works (structural frame, systems, fit-out work, etc). 7.2 Assigning Responsibility for the Design and Construction of a Project Developers usually commission planning and design separately from construction. The devel - oper engages planners and consultants (up to between 15 and 20 in a complex project), as well as a project manager that handles management and supervision; later on, the developer also engages one or more contractors. Architects and planners/consultants usually limit their responsibilities to not exceed the planning fee. Contractors usually take full responsibility. These alternatives vary in cost, planning flexibil - ity, and legal and contractual liability. A landlord that does not engage a turnkey contractor and uses several different contractors will be respon - sible for construction performance, including with regard to building safety, even if they retain a project manager and inspector. 7.3 Management of Construction Risk Developers can stipulate that the contractor will bear the entire liability for construction dates and costs, third-party liability, etc. Criminal liability for which the owner is liable by law cannot be transferred to the contractor. The courts have drawn a distinction in this matter between turn - key contractors (who are considered liable for everything that happens on the site) and a devel - oper who builds with several contractors; the lat - ter cannot disclaim liability.
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