Urban Renewal - עורך דין נדלן ומקרקעין אוהד שפק

Hazardous Structures – Israel

אוהד שפק — Wed, 06 Oct 2021 15:17:28 +0000

Performing Sufficient Due Diligence: Inspection of a Hazardous Structure Before Purchasing an Apartment in Israel

Following the collapse of the buildings on Serlin Street in Holon and Bialik Street in Ramat Gan, many tenants have vacated their homes in the fear that their buildings are in danger of collapsing. This trend is occurring in Bnei Brak as well as in Kiryat Shmona and in other cities throughout Israel.

Before considering purchasing a property in Israel, it is highly advisable to first examine with the department of construction and supervision in the municipality and inspect the relevant building files in the corresponding engineering departments in order to receive a comprehensive background of the property. When examining the property’s history, specific municipal decrees and reports concerning the integrity of the building or its structure will identify whether the building is considered a hazardous structure.

The definition of a hazardous structure in Israel is found in municipal bylaws, and varies from one local authority to another, and in cases where there is a question as to whether a structure is hazardous, the local authority is required to inspect the structure and the results of the inspection may lead the engineering department to redefine the structure as hazardous.

Before requesting a thorough inspection of the specific property in the department of construction and supervision and before inspecting the archive of the building files, you can first review the list of dangerous buildings which is publicly distributed by local authorities. For example, the Tel Aviv municipality, the Rishon Lezion municipality and the Bat Yam municipality publish a list of dangerous buildings that is updated from time to time.

Buyers in negotiation to purchase a property can require that the seller, or the seller’s lawyer provide confirmation from the relevant local authority that the property in question is not considered a hazardous structure; a prudent step prior to signing a binding agreement.

The post Hazardous Structures – Israel appeared first on עורך דין נדלן ומקרקעין אוהד שפק.

Urban Renewal Report for 2018

shpaklaw — Mon, 05 Aug 2019 09:29:30 +0000

The Israeli Authority for Urban Renewal published in mid-May 2019 its Urban Renewal Report for 2018.

The detailed report state that requests for building permits under TAMA 38 projects in Israel are on the decline.

2018 was a record year both in terms of issuing building permits and in terms of buildings that were occupied in projects under TAMA 38 (in a variety of tracks – ‘Clearance and Construction’ or ‘Increased Building Rights’).

However, looking at the number of applications submitted for building permits between 2013 and 2015, there was a record number of requests for building permits – 805 requests for buildings in 2013, 1068 in 2014 and 1007 in 2015 – but 2018 was characterized by a sharp decline for all permits of projects under TAMA 38 – only 633 applications.

It is worth mentioning that nowadays every seventh apartment sold in Israel is in an urban renewal project.

Since February 2018, the Commissioner of the Sales Law at the Israeli Ministry of Housing began collecting data on new dwellings sold in urban renewal projects. Of the 27,540 new apartments sold in Israel in 2018, 3,800 of them were built in urban renewal projects.

As of the end of 2018, the number of housing units approved in Clearance and Construction plans, aka Tama 38/2, throughout Israel is only 13,000.

Looking at area dispersion, one can see that the periphery is falling behind with regard to building permits for Tana 38/2 projects; While in the Tel Aviv District building permits were issued for about 29,000 apartments and in the Central District about 21,000 apartments, in the Northern District building permits were issued for only 442 apartments and in the Southern District about 4,000 apartments.

If you are planning to purchase a new apartment, which has not yet been built or is under construction, in a TAMA 38/1 project, starting mid May 2019, the seller (contractor or developer) must be paid according to the progress of construction.

TAMA 38/1 projects, also called TAMA projects, are projects in which the developer / contractor carries out an exchange deal with the apartment owners – he purchases the building rights on the roof from them and builds residential apartments for sale on several floors above the floors of the building.

In return, he strengthens the building against earthquakes, and builds additions to the apartments – mostly armored rooms, sun balconies and renovation of the stairwell and the exterior, and the addition of an elevator.

The post Urban Renewal Report for 2018 appeared first on עורך דין נדלן ומקרקעין אוהד שפק.

Paying for a New Apartment from a Tama 38/1 Project

אוהד שפק — Sat, 11 May 2019 17:37:58 +0000

As of May 2019 - New Schedule of Payments for Tama 38 Apartments

If you plan on purchasing a new apartment in Israel that is being built as part of a TAMA 38/1 seismic reinforcement project, take note: As of May 2019, you will be required to pay the seller (the contractor or developer) based on a schedule determined according to the completed stages of construction.

TAMA 38/1 construction projects involve a transaction between apartment owners and developers / contractors.

The developer / contractor strengthens and reinforces an existing building to withstand earthquakes and offers additional features such as safe rooms (“mamad”), sun balconies, elevators, stairwell renovations and reparations to the building exterior. In return, he receives building rights on the roof for the construction and sale of new residential units.

In projects in which the developer / contractor is unable to secure bank financing, whether from an Israeli bank or another financial institution that can offer a bank guarantee with an insurance policy, the only guarantee that the seller can give the buyer is a notice of caution on a “cadaster unit” created in the building.

A cadaster unit is a new unit that is added to the Land Registry for a TAMA 38/1 building project.

It is a requirement that effectively serves two purposes:

(1) Attaching the new building rights (those sold to the developer / contractor by the apartment owners); and

(2) registering a notice of caution on that unit in the Land Registry that an agreement was signed for works pursuant to TAMA 38.

In other words, when a buyer purchases a new apartment in Israel as part of a construction project that does not have a bank guarantee, the money that he pays is not guaranteed. As such, the only guarantee that the buyer will effectively receive is a note in the Ministry of Justice’s Land Registry stating that a purchase agreement has been signed between himself and the developer / contractor.

Until now, there has been no legal arrangement regarding payment structure in TAMA 38 purchase agreements. This is in contrast to residential apartments purchased in standard development projects built without a guarantee on the purchase money.

These projects are not TAMA 38 but buyers similarly have not secured a guarantee for the return of all the monies paid. In projects such as these, the buyer is obligated to pay the seller (developer / contractor) according to a payment schedule determined by law:

Following completion of floor casting of bottom level – up to 31% of the apartment price.
Following completion of skeleton, electric and pipeline work on apartment level – up to 56%.
Following completion of skeleton, electric and pipeline work in entire building – up to 61%.
Following completion of exterior cladding of building – up to 67%.
Following completion of plastering and flooring in apartment – up to 77%.
Following completion of interior cladding of building – up to 90%.
Following installation of joint systems in building – up to 95%.
Upon receipt of occupancy permit – remainder of balance.

In light of increased interest for new apartments being built in urban renewal projects, especially TAMA 38 projects, the Israeli Ministry of Housing has added a new amendment to the regulations which forbid developers / contractors from procuring payments exceeding the maximum amount set forth for each stage of construction.

In other words, even if the sales contract drafted between the sides stipulates that the buyer must pay an amount higher than what has been set forth in the regulations, the terms of the agreement do not apply. Rather, the provisions set forth in the regulations prevail.

The maximum payment amounts permitted in apartments being constructed and purchased in a TAMA 38 seismic reinforcement project, in which the money paid is not secured by a bank guarantee or insurance policy, are as follows:

Following reinforcement of first floor – up to 13% of apartment price.
Following reinforcement of entire building – up to 26% of apartment price.
Following completion of skeleton, electric and pipeline work for new floors – up to 46%.
Following completion of exterior cladding – up to 52%.
Following completion of plastering and flooring in apartment – up to 74%.
Following completion of internal cladding – up to 84%.
Following installation of joint systems in building – up to 94%.
Upon receipt of occupancy permit – remainder of balance.

Please note that these regulations are not applied retroactively. They are applicable from mid-May 2019 and do not apply to TAMA 38/2 demolition and construction projects.

The post Paying for a New Apartment from a Tama 38/1 Project appeared first on עורך דין נדלן ומקרקעין אוהד שפק.

A Tenant’s Guide to Tama 38

shpaklaw — Thu, 21 Dec 2017 11:17:50 +0000

A Tenant’s Guide to Tama 38

Adopted in 1980, the Israeli Building Standard for the Durability of Buildings against Earthquakes was passed due to the estimation that most of the structures built in the country up until that point did not meet that standard.

There was a real concern that in the event of a strong earthquake in Israel, many buildings would collapse and many people would be put at serious risk.

In 2005, a national plan was approved to strengthen existing buildings against earthquakes (also known as Tama 38). Tama 38 is a collection of regulations whose main function is to deal with the risks associated with earthquakes.

The cost of strengthening these buildings and bringing them up to the 1980 standard has shown to be relatively high, which has required a solution for financing the construction work.

Through Tama 38, economic incentives are given by granting increased building rights and encouraging homeowners to reinforce their buildings.

Before the owners of apartments contact a Tama 38 contractor or developer, it’s important to include a few simple precautions in any agreement with that contractor or developer.

Selection of representatives

If you’re an apartment owner/building owner, hold a meeting and choose representatives who will oversee the process. Exact roles should be defined. In addition, you should appoint a lawyer with experience in property law, specifically in Tama 38 projects, who will represent you.

Signing documents

Don’t sign documents that limit your ability to negotiate. If you sign a letter of approval or a document of intent, make sure that the document includes a time frame in which the contractor needs to complete the project.

Choosing the contractor

This is the most important step, so hold a meeting with all apartment owners and your lawyer to examine multiple offers. Weigh the pros and cons of each offer and analyze the individual concerns of each owner. And if something sounds too good, examine the feasibility of that proposal and compare it to others. It is also possible to stipulate that construction only be performed by a registered contractor.

Signing an Agreement

An agreement between the owners of apartments for the entrepreneur or contractor is complex. Sometimes, it takes a while until the negotiations lead to actual signing. Set a timetable for things like: when all the tenants should sign, when the building permit should be issued, when construction should actually start and end, repairs and the completion of registration.

Ensure that proper collateral arrangements are agreed upon, as well as an implementation guarantee and security checkup to deal with defects that may appear later.

Keep in mind that according to newest version of the law, developers of Pinui U’Binui projects must word their contracts according to the pre-established Israeli Sale Law, as if they were selling a new apartment.

The post A Tenant’s Guide to Tama 38 appeared first on עורך דין נדלן ומקרקעין אוהד שפק.

Urban Renewal - עורך דין נדלן ומקרקעין אוהד שפק

Hazardous Structures – Israel

Performing Sufficient Due Diligence: Inspection of a Hazardous Structure Before Purchasing an Apartment in Israel

Buyers in negotiation to purchase a property can require that the seller, or the seller’s lawyer provide confirmation from the relevant local authority that the property in question is not considered a hazardous structure; a prudent step prior to signing a binding agreement.

Urban Renewal Report for 2018

The Israeli Authority for Urban Renewal published in mid-May 2019 its Urban Renewal Report for 2018.

The detailed report state that requests for building permits under TAMA 38 projects in Israel are on the decline.

2018 was a record year both in terms of issuing building permits and in terms of buildings that were occupied in projects under TAMA 38 (in a variety of tracks – ‘Clearance and Construction’ or ‘Increased Building Rights’).

It is worth mentioning that nowadays every seventh apartment sold in Israel is in an urban renewal project.

Since February 2018, the Commissioner of the Sales Law at the Israeli Ministry of Housing began collecting data on new dwellings sold in urban renewal projects. Of the 27,540 new apartments sold in Israel in 2018, 3,800 of them were built in urban renewal projects.

As of the end of 2018, the number of housing units approved in Clearance and Construction plans, aka Tama 38/2, throughout Israel is only 13,000.

If you are planning to purchase a new apartment, which has not yet been built or is under construction, in a TAMA 38/1 project, starting mid May 2019, the seller (contractor or developer) must be paid according to the progress of construction.

In return, he strengthens the building against earthquakes, and builds additions to the apartments – mostly armored rooms, sun balconies and renovation of the stairwell and the exterior, and the addition of an elevator.

Paying for a New Apartment from a Tama 38/1 Project

As of May 2019 - New Schedule of Payments for Tama 38 Apartments

TAMA 38/1 construction projects involve a transaction between apartment owners and developers / contractors.

A cadaster unit is a new unit that is added to the Land Registry for a TAMA 38/1 building project.

It is a requirement that effectively serves two purposes:

(1) Attaching the new building rights (those sold to the developer / contractor by the apartment owners); and

(2) registering a notice of caution on that unit in the Land Registry that an agreement was signed for works pursuant to TAMA 38.

Until now, there has been no legal arrangement regarding payment structure in TAMA 38 purchase agreements. This is in contrast to residential apartments purchased in standard development projects built without a guarantee on the purchase money.

These projects are not TAMA 38 but buyers similarly have not secured a guarantee for the return of all the monies paid. In projects such as these, the buyer is obligated to pay the seller (developer / contractor) according to a payment schedule determined by law:

Following completion of floor casting of bottom level – up to 31% of the apartment price.

Following completion of skeleton, electric and pipeline work on apartment level – up to 56%.

Following completion of skeleton, electric and pipeline work in entire building – up to 61%.

Following completion of exterior cladding of building – up to 67%.

Following completion of plastering and flooring in apartment – up to 77%.

Following completion of interior cladding of building – up to 90%.

Following installation of joint systems in building – up to 95%.

Upon receipt of occupancy permit – remainder of balance.

In other words, even if the sales contract drafted between the sides stipulates that the buyer must pay an amount higher than what has been set forth in the regulations, the terms of the agreement do not apply. Rather, the provisions set forth in the regulations prevail.

The maximum payment amounts permitted in apartments being constructed and purchased in a TAMA 38 seismic reinforcement project, in which the money paid is not secured by a bank guarantee or insurance policy, are as follows:

Following reinforcement of first floor – up to 13% of apartment price.

Following reinforcement of entire building – up to 26% of apartment price.

Following completion of skeleton, electric and pipeline work for new floors – up to 46%.

Following completion of exterior cladding – up to 52%.

Following completion of plastering and flooring in apartment – up to 74%.

Following completion of internal cladding – up to 84%.

Following installation of joint systems in building – up to 94%.

Upon receipt of occupancy permit – remainder of balance.

Please note that these regulations are not applied retroactively. They are applicable from mid-May 2019 and do not apply to TAMA 38/2 demolition and construction projects.

A Tenant’s Guide to Tama 38

A Tenant’s Guide to Tama 38

Adopted in 1980, the Israeli Building Standard for the Durability of Buildings against Earthquakes was passed due to the estimation that most of the structures built in the country up until that point did not meet that standard.

There was a real concern that in the event of a strong earthquake in Israel, many buildings would collapse and many people would be put at serious risk.

In 2005, a national plan was approved to strengthen existing buildings against earthquakes (also known as Tama 38). Tama 38 is a collection of regulations whose main function is to deal with the risks associated with earthquakes.

The cost of strengthening these buildings and bringing them up to the 1980 standard has shown to be relatively high, which has required a solution for financing the construction work.

Through Tama 38, economic incentives are given by granting increased building rights and encouraging homeowners to reinforce their buildings.

Before the owners of apartments contact a Tama 38 contractor or developer, it’s important to include a few simple precautions in any agreement with that contractor or developer.

Selection of representatives

If you’re an apartment owner/building owner, hold a meeting and choose representatives who will oversee the process. Exact roles should be defined. In addition, you should appoint a lawyer with experience in property law, specifically in Tama 38 projects, who will represent you.

Signing documents

Don’t sign documents that limit your ability to negotiate. If you sign a letter of approval or a document of intent, make sure that the document includes a time frame in which the contractor needs to complete the project.

Choosing the contractor

Signing an Agreement

Ensure that proper collateral arrangements are agreed upon, as well as an implementation guarantee and security checkup to deal with defects that may appear later.

Keep in mind that according to newest version of the law, developers of Pinui U’Binui projects must word their contracts according to the pre-established Israeli Sale Law, as if they were selling a new apartment.