Tuesday, September 19, 2006

More on the Legal Chelm in Israel

From our friend, Yitzchak Heimowitz, the lawyer I mentioned in No Joke!:

I certainly do remember.

This Chelmite situation existed and still exists whenever people purchase apartments. The basis is the fact that kablanim do not pay their lawyers. The lawyer does the work of buying the lot, getting the zoning changed, making combination deals with the original owners, etc. without any payment from the kablan. The latter promises him that anyone who buys an apartment will have to pay the lawyer a fee (usually 1 1/2%). If not, that person will not be able to buy.

Many years ago I tried to get the Bar Association to rule there was a conflict of interest and one lawyer should not be allowed to represent both sides. However the economic interest of the lawyers who represent kablanim was so strong, that all the Israel Bar did was to adopt a requirement that the kablan's lawyer must put a clause in the contract stating that he represents the seller and that the buyer is entitled to get his own lawyer, BUT he still has to pay the 1 1/2% to the seller's lawyer in addition to his fee to his own lawyer.

Lots of Israelis who are making the largest investment of their lives decide to cut the expense of the fee to their own lawyer and just pay the kablan's lawyer.

Welcome to Israel (Chelm)!

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