New Apartments; The Financial Implications of Making Structural & Design Changes
"Tenant changes" is the term that describes the process by which buyers of new apartments change or upgrade the apartment they received from the contractor after they signed the contract with the developer. It starts with relatively modest changes, like adding an electrical outlet or replacing a kitchen, and ends with breaking down all the walls in the apartment and rebuilding it.
“Tenant changes” includes anything and everything that is different or additional to that which was listed in the contract, with fairly modest amounts starting at say a few thousand shekels (10-15,000nis) and sometimes reaching in excess of 100,000 shekels (when adapting the apartment to meet very specific needs of the buyer). To reiterate, this is money that the buyer pays for the contractor's adjustments to the plan, and not for any interior design features, furniture and the like.
Some of the changes can involve a fair bit of inconvenience for the contractors, who instead of staying within the uniform model of apartments are suddenly required to divert their focus on individual apartments costing them time and as a result - irritation. While these tweaks and changes seem minor to the client, the increased costs and bureaucracy for the contractor can cause friction between the two parties.
To get an idea of how much the extra costs can total up; expanding the kitchen space and adding infrastructure such as smart electricity, and/or changing the flooring, the cost can range from NIS 30,000 to NIS 100,000 per apartment. This does not include furniture, fittings or carpentry.
In a luxury project, it's not unusual for a couple who bought a 6-room apartment to wish to turn it into a 4-room apartment that will exactly fit their needs with workspaces and another extended guest room, and for this, you’re looking at additional costs running into the NIS 100,000’s.
For those buyers who make changes to the design specifications of the apartment, such as the cladding, floors, tiles, sanitary ware, kitchen, etc., there is a fixed price list in the real estate market called the "Dekel price list". These prices can vary from contractor to contractor and usually, payment for tenant changes is subject to aggressive rather than simple negotiation.
When working with GPI, we take the surprise and headache out of the process by not only bringing the buyers attention to areas they might like to change before they sign, but also carry out these negotiations ensuring full transparency. Find out how we can help here