The question of the majority is one of the first that comes up in any building considering pinui-binui. The law does not require every owner to agree in order to move forward, but it does not allow an objecting owner to be ignored either. The Evacuation and Construction (Compensation) Law sets the majority needed for consenting owners to go to court against an owner who refuses unreasonably.
What majority is required?
Under the current wording of the law, as presented by Israel’s Kol Zchut rights site, a single building requires the consent of owners of at least two-thirds of the apartments. In a compound of several buildings, two-thirds of all apartments in the compound are required, as well as two-thirds in each building. In a building of 4 or 5 apartments the requirement is three apartments, provided the building has more than two owners. The consenting owners must also hold more than half of the common property attached to their apartments. Special rules apply to owners of several apartments in the same building.
Note: this majority allows the owners to go to court against a holdout. To carry out the project, all owners must sign, or the court must order it.
When is a refusal reasonable?
- The deal is not economically worthwhile.
- No temporary housing was offered for the construction period.
- No adequate securities were offered.
- Special personal circumstances make the deal unreasonable for the owner.
- The owner or a family member living with them has a disability, and the alternative apartment lacks adaptations that exist in the current one.
What is the liability of a holdout?
An owner who refuses unreasonably may be liable to compensate the consenting owners for damage caused by delaying or cancelling the deal. The court may impose only part of the damage, taking into account its amount, the owner’s ability to pay and the circumstances. Such proceedings are complex, so it is worth first trying to understand the reasons for the refusal and address them.
Elderly owners
Elderly owners have special protections: from age 70, and especially from 75, the developer must offer certain alternatives such as sheltered housing, an alternative apartment or cash. See pinui-binui for elderly owners.
What does this mean if you haven’t signed?
If you have reservations, raise them early and in writing with the committee and the owners’ lawyer. They can often be resolved in the agreement. A refusal without a defined reason may be considered unreasonable.
Next steps
Every pinui-binui project is different: the building, the developer, the plan and the owners themselves. At Paz Israel & Co. we represent apartment owners in urban renewal projects, review the offer and the agreement and support the owners’ committee throughout. See our pinui-binui and urban renewal page, or contact us to arrange a meeting in Tel Aviv, Jerusalem or Modi’in.
This article provides general information about Israeli law as of the time of writing and is not legal advice.