A residents' lawyer for pinui-binui (evacuate and rebuild) and urban renewal

Why the residents need their own lawyer

The developer has a legal team, an appraiser, a planner and a financing adviser who support it in every project. Apartment owners, in most cases, do this once in their lives. A residents' lawyer in pinui-binui or TAMA 38 evens out this gap: the lawyer knows the usual market terms, knows which securities to demand, and conducts the negotiation on behalf of all the apartment owners as one body.

The Government Authority for Urban Renewal, in coordination with the Israel Bar Association, has published guidelines on dealing with lawyers who represent apartment owners. The central principle: the apartment owners are the lawyer's clients, even when the developer pays the fees. So you choose a lawyer before you choose a developer, and you do not sign documents with a developer or an organiser before that.

What the lawyer does at each stage

1. Getting organised

   Helps choose a residents' committee, defines its powers and explains to the apartment owners the possible tracks for the building.

2. Choosing a developer

   Drafts the requirements for the developers together with the supervisor, runs a competitive process in which all the developers submit offers on the same basis, and compares them.

3. Negotiation and agreement

   The additional area, parking, a safe room (mamad) and storage room, the technical specification, rent during construction, guarantees, insurance, timetables, compensation for delay and ways out if the project does not progress.

4. Collecting signatures

   Collects the apartment owners' signatures, explains the agreement to each of them, and handles special cases: inheritances, mortgages, older apartment owners and apartment owners who object.

5. Planning and permit

   Follows the plan and the permit, and checks that they match what was promised in the agreement.

6. Evacuation and construction

   Makes sure that the guarantees were handed over before the evacuation, and that the developer keeps to the rent payments and the timetables.

7. Handover and registration

   Accompanies the handover of the apartments and the registration of the new condominium, until each apartment is registered in its owner's name.

How to choose a residents' lawyer

1. Choose a residents' committee

   In large compounds it is recommended that the residents' committee is chosen first, and that it accompanies the choice of lawyer.

2. Ask for several offers

   At least three. Each office presents its experience, its team and its fee structure.

3. The apartment owners decide

   The residents' committee brings the offers, and a majority of the apartment owners chooses. Do not choose on the recommendation of a developer or an organiser.

4. Sign a services agreement

   A detailed agreement between the lawyer and the apartment owners, preferably based on the Authority's model agreement.

At the meeting with each candidate, it is worth checking:

• Independence from the developer. The lawyer represents the apartment owners only, does not represent the developer competing for the project, and receives no benefit from it beyond the fees.
• Experience in the relevant track. Pinui-binui, building renewal and TAMA 38 are different from one another. Ask about similar projects that reached signing and construction.
• Who will actually handle the matter. A partner, a senior lawyer or a team, and how available they are for the apartment owners' questions.
• Transparency about fees. Who pays, when, and what happens if the project does not get off the ground. Everything in a written fee agreement.
• Familiarity with the local authority. The municipality's policy, the plans that apply and the urban renewal administration.
• Ability to work with a group. Meetings, explanations in plain language, and sensitivity to older apartment owners and to owners with special needs.
• References. A conversation with residents' committees from previous projects.

Who pays the fees

In most projects the developer bears the fees of the lawyer chosen by the apartment owners, as it does the fees of the supervisor and appraiser acting for them, and its undertaking to pay is given to the apartment owners. According to the Authority's guidelines:

• It is recommended to set the fees by the number of apartments or by their value, and to make sure they are in line with the market, because the developer's costs affect the consideration for the residents.
• Payment is divided into milestones, such as obtaining the majority, deposit of the plan, its approval, the building permit and the evacuation.
• The lawyer does not personally negotiate their fees with the developer, and receives no other benefit from the developer.

Even when the developer pays, the lawyer's obligations are to the apartment owners only.

Questions to ask at the first meeting

• In which similar projects have you acted for the residents, and what stage are they at now?
• Do you represent, or have you recently represented, any of the developers that have approached us?
• How will you run the choice of developer, and how will we compare the offers?
• Which securities will you demand from the developer, and when are they handed over?
• Who in the team will be available to the apartment owners, and how?
• What is the fee structure, which services does it include, and what happens if the project does not progress?
• Does anyone in the office, or any of their family members, own an apartment in the project?

Warning signs

• A lawyer brought in by the developer or the organiser and presented as "the building's lawyer".
• Pressure to sign quickly, before a competitive process between developers.
• A "letter of intent" or "agreement in principle" presented as non-binding.
• An agreement without clear guarantees, without timetables and without a way out.
• Fees that depend on choosing a particular developer, or direct negotiation by the lawyer with the developer over their fees.
• An "irrevocable" representation agreement, or a clause that allows the representation to be transferred to another lawyer without your consent.
• A lawyer who at the same time represents the developer, in this project or in another project.

Legal support for residents: Eliaz Danos, Law Office

The site is operated by Eliaz Danos, Law Office, a boutique office in real estate, urban renewal and planning and building law. The office advises residents' committees and apartment owners in pinui-binui, TAMA 38 and building renewal, from the initial review of the building until the new apartments are registered.

Frequently asked questions

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