The Price That Was Supposed to Stay Fixed

Roy sent me a screenshot of an email, without another word. Just one subject line: "Price update due to rising raw material costs."

Below it, a short message from the developer: the project had run into exceptional cost increases, and a price adjustment was "unavoidable."

Roy, in his forties, already owned two investment apartments in Israel before he decided to buy abroad. He knew how it works at home: every contract with a developer is linked to the construction input index. It's almost taken for granted, and every Israeli investor arrives with that expectation hard-wired. So when he sat in front of the contract for the apartment in Romania and saw there was no index-linkage clause at all, he felt relief. "Finally, a price that doesn't move," he told me back then. "Not like at home."

There was just one clause that was the exception: if the VAT rate went up between signing and handover, he would bear the difference. That sounded reasonable to him. A tax is a tax; it's something the state decides and no one controls. Beyond that, the price was locked. That's how he understood it. And that's how it was actually written.

A year went by. Construction progressed. And then that email arrived.

The developer's explanation was honest, you could say. Steel and concrete prices in Europe had jumped because of the war in Ukraine. It wasn't an empty claim; it was a reality that hit many projects in the region. But the question Roy asked me wasn't "is it true that prices went up." The question was: "Is this my problem?"

I opened the contract and read it again, clause by clause. The price clause was clear and closed: a fixed price, not linked to any index, with a single, explicit exception: VAT. There was no open wording, no "construction costs," no "unforeseen circumstances," no back door the developer could walk through. Whoever drafted that clause at the time, the developer or his lawyer, chose not to leave himself any room. And now that worked in Roy's favor, not against him.

I replied to the developer on Roy's behalf. Politely, but without hesitating: the war in Ukraine is a serious circumstance, and we understand the difficulty. But the signed contract sets a fixed price, with a single exception that doesn't include rising construction costs. There is no contractual basis for the demand.

That's the moment in this story I think about most. Because Roy didn't "win" because he was smarter than the developer, and not because he was lucky. He was protected because someone, a year earlier, read that clause to the end and knew exactly what it said and what it didn't.

The difference between Israel and abroad isn't just "linked" versus "not linked." In most cases at home, you know in advance that the price will move, and that's priced into your expectations. Abroad, the price is often presented as fixed, and that sounds like protection. But "fixed" is a word you have to check all the way through. The real question isn't "is the price linked to an index," but: what are all the exceptions under which the price can still move? VAT is one exception that appears almost always. Some contracts add more: legislative changes, infrastructure costs, and sometimes vague general wording that leaves the developer an opening.

The developer didn't give up. There was more correspondence, an attempt at a partial compromise, a request to "meet halfway." Roy refused. Not because he wanted a confrontation, but because he had no need to compromise on something that was already his under the contract. In the end, the apartment was handed over to him at the price agreed on the day of signing, not a shekel more.

If you're buying an apartment from a developer abroad and you see there's no index linkage, don't assume that means the price "can't move." Check exactly which exceptions are written there. Because no one can demand from you what isn't written in the contract, but only if someone took the trouble to make sure of it in advance.