C’ttee approves relaxations for evacuate and build projects

Yesterday, the Knesset Internal Affairs and Environment Committee, headed by Walid Taha, approved chapter 4 (Urban Renewal) of the Economic Arrangements Bill that accompanies the state budget. The bill will go to the Knesset plenum for second and third readings. The measure approved yesterday is a significant one, designed to expedite “evacuate and build” plans as part of urban renewal programs. In general, under such plans, an old apartment building is demolished and a taller one is built in its place. The existing residents receive new apartments from the developer, who pays their expenses for living elsewhere while the project is under construction. The developer makes his money by selling the extra apartments in the new building, while the residents benefit from more modern, and sometimes larger, apartments, with higher sale value.

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The most important change in the chapter approved yesterday is that the majority of residents required to give consent in order for an evacuate and build project to proceed is reduced from 80% to 66%. If 66% of the owners of apartments in a building have signed contracts with a developer for such a project, they can sue the minority of apartment owners who refuse to do so. If the court finds that the refusal is unreasonable, the owners holding out can be made to compensate the other owners for their financial loss.

The amendment to the existing legislation includes a clause stating that apartment owners who have infringed building regulations will not count in the calculation of the percentages for and against, which means that a project could proceed with the consent of just 50% of the owners. The status of people who own more than one apartment in a building is strengthened, and the amendment also provides that the developer can sue a refusing resident. In addition, there are provisions concerning special needs of elderly residents, cases in which the contractor has obtained a resident’s signature improperly, taxation benefits, projects not carried out expeditiously, and other aspects.

The Israel Builders Association welcomed the amendment, saying “Reducing the required majority will shorten the time taken to realize a project by at least two years and hasten the construction that most of the hope for.”

Published by Globes, Israel business news – en.globes.co.il – on October 27, 2021.

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