Essential information for residents in urban renewal

The three tracks

This is a summary only. Every case should be reviewed individually with a lawyer who specialises in the field.

A special track applies to buildings that were damaged by missiles and are located in an area declared by the government, under the Law on Rehabilitating War Damage by Way of Urban Renewal (חוק שיקום נזקי מלחמה בדרך של התחדשות עירונית).

The residents' committee

The first step is to choose a residents' committee. According to the guidelines of the Government Authority for Urban Renewal:

• Give notice of the election meeting at least one week in advance, and make sure that all the apartment owners know about it. In a large compound, hold a meeting for each building.
• The committee has at least three members, preferably with a representative from each entrance. In a large compound it is customary to have one representative for about every ten apartment owners.
• The apartment owners sign a letter of authorisation, one signature per apartment. It comes into force when the owners of a majority of the apartments have signed, and is renewed every three years.
• Committee members declare any connection to the developer, and they may not receive any personal benefit.

The committee manages the process, but it does not sign on behalf of the apartment owners and does not decide alone on the developer or the consideration.

Professionals acting for the residents

Before approaching developers, choose professionals who represent only the apartment owners. The developer usually pays their fees under the agreement, but they are committed to the apartment owners alone:

• Residents' lawyer: manages the choice of developer and the negotiations, and drafts the agreement and the guarantees.
• Residents' supervisor: checks the specification, the plans and the construction until handover.
• Appraiser: checks the economic viability and the consideration offered.
• Social consultant: in large projects, helps older apartment owners and families with special needs.

Choosing a developer

The Authority recommends choosing a developer in a competitive process: several developers submit offers based on the same requirements, and the apartment owners choose between them. What to check apart from the size of the addition:

• Projects the developer has completed and handed over, not only projects in planning.
• Financial strength and bank financing.
• The security it offers, and when it provides it.
• Binding timetables, and compensation for delay.
• A conversation with the residents' committees of previous projects.

The developers and contractors directory includes 172 companies by region and field, with contact details.

The consideration and the guarantees

The usual consideration includes a new, larger apartment with a safe room (mamad), a balcony, parking and a storage room, rent from the evacuation until handover, moving, and an exemption from land appreciation tax (mas shevach) and purchase tax under the conditions in the law. It is important that the mechanism for the addition is uniform for all the owners.

The guarantees are the heart of the agreement: a guarantee under the Sale Law (חוק המכר) for the value of the new apartment, until it is handed over to you and a caution note or the ownership is registered in your favour; a guarantee for the rent payments; a tax guarantee; a registration guarantee; and a defects guarantee. They are delivered before the evacuation. An explanation of each guarantee is on the Standard guarantees page.

The protections the law gives you

• Meeting and key terms document: before signing the first transaction, the developer must convene the apartment owners, and at least two weeks before signing give you a key terms document: the principles of the consideration, the security and its experience Pinui-Binui Law, section 1A.
• An early transaction signed before that can be cancelled by a decision of a majority of the apartment owners, as long as 40% of them have not signed section 1C.
• Disclosure: anyone acting on behalf of the developer must say so in the very first approach section 6. Organisers are also subject to duties of fairness and disclosure under the Urban Renewal (Agreements for Organising Transactions) Law (חוק התחדשות עירונית (הסכמים לארגון עסקאות)).
• Abusive signing may lead to the transaction being cancelled by the Tenants' Ombudsman section 5B.
• Stalled project: in pinui-binui, the owners of a majority of the apartments may decide to cancel the transactions if the developer has not met the deadlines in the law section 1D. In a transaction under the Strengthening Law (TAMA 38 and building renewal), every apartment owner may cancel the transaction if, within 18 months, the developer has not contracted with half of the apartment owners, if within three years it has not obtained the required majority, or if within three and a half years it has not submitted a permit application. Cancellation may require a payment to the developer, under the regulations published in 2025.

Older apartment owners and owners with disabilities

In pinui-binui, an apartment owner who had reached the age of 70 on the day the first transaction in the project was signed, and has lived in the apartment for at least two years, must receive from the developer an offer of alternatives to the apartment in the project, such as moving to assisted living, an alternative apartment or two small apartments. For an apartment owner aged 75 or over, the developer must offer a move to assisted living or the purchase of an alternative apartment, and if it did not, the owner's refusal to sign will be considered reasonable. In TAMA 38 and building renewal there are similar protections. Owners with disabilities must be offered adapted alternative housing. Details on the pinui-binui page.

When an apartment owner refuses

When the required majority has signed and an apartment owner refuses without a reasonable reason, you can apply to the court in pinui-binui, or to the Superintendent of Land Registration in TAMA 38 and building renewal. The law defines when a refusal is reasonable: when the transaction is not viable, when alternative housing or security was not offered, and in special personal circumstances. That is why the offer must be fair to everyone from the start.

Common mistakes

• Signing early with a developer or organiser, before there is a residents' committee and a lawyer.
• Choosing a lawyer or supervisor brought in by the developer.
• Comparing offers by the size of the addition alone.
• An agreement without clear guarantees or without binding timetables.
• A caution note in favour of the developer without an undertaking to remove it if the transaction is cancelled.
• Relying on old information: the majority, the ages and the validity of TAMA 38 have all changed in recent years.

Who to contact

• The urban renewal administration at the local authority: information on the municipality's policy, and in some cities initial support free of charge.
• The Government Authority for Urban Renewal: the Authority's website, and the Tenants' Ombudsman.
• Legal support: Eliaz Danos, Law Office, phone 03-6917878.

Frequently asked questions

This is a summary only. Every case should be reviewed individually with a lawyer who specialises in the field.