A warning note is connected to real estate law. In essence, it is a written obligation in the deed of the owner of the rights to real estate property or the actual owner of the property to perform a real estate transaction or alternatively to refrain from performing the transaction. We will examine the purpose for which the warning note is intended and see how it is defined in the law and what its consequences are.
The purposes of a warning note
Public notification. This is a notice to inform any other interested parties that there is an obligation to perform a transaction on this specific property, or that it has already been completed. When a particular individual wishes to examine a property’s documentation, they will see a warning note pertaining to it.
Protection of the buyer’s money. The purchase of real estate property, for most people, is the largest purchase they will ever make. Therefore, in a case where the owner of the property experiences some predicament such as a seizure of property or even files for bankruptcy, the warning note minimizes the injury to the buyer.
Prevention of contradictory transaction. If the land property owner has performed a transaction with the buyer, a warning note prevents him from performing a transaction with another individual for the same property. Completing another transaction will be dependent upon the buyer with whom the transaction was performed.
According to line 126b of the Land Law, in order to write a warning note in a deed, the buyer simply has to request that it be written, without any relation to the desires of the seller. Line 127 describes the results of the warning note, as long as it is valid – here, in practice, the prevention of a contradictory transaction and prevention of injury to the buyer are guaranteed.
In order to write a warning note in a deed, the following documents are needed
A request to write a warning note. The request must be signed by the person entering into the obligation or the beneficiary and it must be validated by a lawyer or the registrar.
Obligation or power of attorney. The owner of the rights to the property must provide a written statement of obligation or an irrevocable power of attorney to perform the transaction or prevent the transaction, even if they does not consent to the drafting of a warning note. There is no need for such an obligation if all parties agree to submit a request for writing a warning note.
A letter of consent for writing the note. A consent letter must be attached if the person entering the obligation is not the registered owner of the rights to the property.
Identification documents. These are documents whose purpose is to prove the identities of all those who have signed the request, including corporate documents.
In individual cases it is necessary to attach additional documents.
Eitan Eldar is an independent entrepreneur whose main activities are conducted through private companies, which he manages, among them is the Gibor Sport Holdings Ltd. company. This text is taken from lectures of Eitan Eldar in IDC Herzliya.
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