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Just before the house was destroyed: Are you sure you did not forget anything?

Entrepreneurs and apartment owners are waiting and looking forward to the start of a demolition and construction project (TMA 38) or evacuation-construction, but before setting off, there are a number of things worth checking out, so you will not be sorry when it is too late

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• Guy Farbman and Efrat Reshef

• Farbman Reshef & Co.

• Construction clearance

• TMA 38/2

• Apartment owners

• Entrepreneurs

• Real Estate Center

In collaboration with the Real Estate Center

Sunday, 17 January 2021, 10:07

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Fascinating projects, but need to be prepared for them (Photo: ShutterStock)

After long hardships, your project finally reaches the evacuation notice stage.

After receiving the notice and the time left until the eviction itself, the period of organization of the developer and the apartment owners begins, a relatively short period of time, during which all parties will have to complete all necessary preparations for the demolition and construction of the new building.

Much has been written and said about the early stages of the demolition and construction / evacuation-construction project, including the required approvals, policy changes, required majority, consent of the rights holders, options for prosecution against refusers, permutations, objections, obtaining permits and a variety of obstacles.

Very little is said, however, about the intermediate stage between the announcement of the eviction and the commencement of the execution of the works, and about the difficulties which may arise within this period as long as the parties have not been prepared for them in a timely manner.

Early preparation of both parties for the process may save the developer a lot of money on the one hand, and on the other hand, for the rights holders, prevent failures in securing their rights and obtaining the required guarantees.

To ensure this, a great deal of experience is required on the part of the attorneys representing the parties.

In order to shed some light on the last section of the eviction phase, and to explain to both developers and apartment owners what steps they must take to reach this stage as prepared as possible, we turned to attorneys Guy Farbman and Efrat Reshef, partners in the law firm of Guy Farbman Reshef & Co. ', One of the leaders in the field of real estate and urban renewal, both of whom have many years of experience in representing developers and representing apartment owners.

The law firm of Guy Farbman Reshef & Co. has completed more than 70 projects in the field of urban renewal in delivering apartments to apartment owners.

In this context, attorneys Farbman and Reshef encountered almost every possible scenario on the way to the ultimate goal of delivering the new / reinforced apartments to their owners.

In light of their rich experience, they can advise their clients on how to avoid unnecessary problems and exposure to possible risks at the critical stage where the owners hand over their apartments to the developer, as well as ensure payments and collateral at such a significant stage of the project.

Adv. Efrat Reshef (Photo: PR, PR)

"At this point, just before the eviction notice, the developer and the apartment owners are a kind of mirror image of each other," says Adv. Farbman. "Each party is concerned about the same thing - the eviction of the apartments - but sees it from his point of view.

The developer fears that some of the apartment owners, or existing tenants in the property, will not vacate, which will endanger him with very high financial costs as at this point the developer begins to pay rent to the vacating owners.

On the other hand, apartment owners are afraid to find themselves after the apartments are vacated without receiving the rent and security they deserve.

As an office that sometimes represents apartment owners and sometimes developers - our job at this stage is to safely move both parties to the execution stage, when the apartments have been vacated by all the owners and against all the required collateral. "

Apartment owners: These are the things you need to make sure upon receiving the eviction notice

In order to pass the evacuation phase safely and finally reach the start of demolition and construction work, attorneys Farbman and Reshef recommend to the apartment owners, upon receipt of the eviction notice and before handing over the apartments, to verify the following:

• Payment of quarterly / first rental rent was guaranteed.

• An escort agreement has been signed by all the rights holders and the rights holders' lawyers hold in their hands a sale law guarantee in the value of the new apartment or a letter of commitment from the lending bank that issues the guarantee, as well as a guarantee for the rent.

• The developer has a proper insurance policy.

• The building permit was obtained or a decision was made by a committee conditional on the payment of fees and levies only and the payments of fees and levies were guaranteed.

• For owners who rent an alternative apartment: There is a lease for an alternative apartment in which they will live during construction, including an exit mechanism in case one of the rights holders in the building to be demolished does not vacate the apartment.

• All debts have been paid to the municipality (water, property tax), the electricity company and the gas company and there are no historical debts to the municipality and / or to any other body that may prevent the municipality from obtaining the mortgage required to register the mortgage.

• Upon evacuation: make sure that the key is handed over to the lawyers and through them, after the evacuation of all the apartments, will be handed over to the developer.

Adv. Guy Farbman (Photo: PR, PR)

Entrepreneurs: With the eviction notice, do not forget to verify the following

On the part of the developer, as mentioned, the biggest concern is that all apartment owners will vacate their apartments on time. "At the stage of receiving the eviction notice," says Adv. Reshef, "the developer's attention should be drawn to factors that may delay eviction and the steps he must take to avoid the duration of the eviction procedure and the payment of excess rent. One of the delays is the registration of mortgages in favor of the lending bank - the arrangement with the apartment owners, problems with the drafting of the registration that must be resolved ahead of time, existing debts, tenants who are delayed in eviction, heirs who have not arranged registration, etc. Our suggestion to those developers is that before issuing the eviction notice, they conduct a double-checking of the registration wording, complete all owners' signatures on the accompanying documents, arrange the existing mortgages with the lending bank, issue a municipal permit to register the mortgage to the lending bank (procedure often delayed). "And only then - they will send the eviction notice.

" "The developer must make sure he has a clean property," adds Adv. Farbman, "that the mortgages are registered, that there are no foreclosures on the apartment owners, that everyone has signed the accompanying documents and that he has all the collateral."

Alongside these steps, attorneys Farbman and Reshef mention that there are also unforeseen scenarios that may happen at this stage of the project, and tell of a case where between receiving the eviction notice and the eviction date one of the apartment owners passed away, leaving an heir who refused to vacate. And the experience of attorneys Farbman and Reshef, a solution was found that allowed the same heir to vacate and the project proceed without any of the parties being harmed.Another examples of evacuees are a financing entity that refuses to sign under irrevocable power of attorney of overseas owners The property, existing mortgages that have not yet been settled with the financing entity and more.

These complex cases, as well as various problems in routine preparation steps, can significantly hurt both developers and homeowners and therefore it is crucial to select experienced lawyers at all stages and aspects of the project from its initial stages to its completion. The right choice will ensure each party proper protection and proper preparation for each stage of the process.

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