A building with a TAMA project stuck on Yehuda Maccabi-Weizman streets in Tel Aviv/Reuven Castro
The Knesset's Interior Committee will discuss in the coming days an amendment to the Law on the Governmental Authority for Urban Renewal, which will allow the promotion of urban renewal processes in complexes where several entrepreneurs operate, in a way that does not allow any of them to obtain the necessary majority and bring the project to fruition ("blocking transactions").
The amendment to the law will allow the Governmental Authority for Urban Renewal to allow this block, by promoting an arrangement between the developers, or alternatively by giving permission to the apartment owners to release themselves from the blocking transactions.
According to the proposal that is being promoted, the CEO of the Governmental Authority for Urban Renewal will be authorized to activate a mechanism of release from blocking transactions, after receiving an application to do so on behalf of parties involved in the transaction - entrepreneurs or residents, according to the following conditions:
The appeal will be made by two parties involved in the complex, at least, when the party involved is an entrepreneur who has agreements with at least 20% of the apartment owners in the complex, or a group of 20% of the apartment owners in the complex, who contracted with an entrepreneur.
All the applicants entered into transactions in relation to 50% of the apartments in the complex, at least.
A year and a half has passed since the first deal was signed in the complex, at least.
If the CEO of the Governmental Authority for Urban Renewal finds that these conditions have been met, so that it is a situation of "blocking transactions", he will notify the parties of his intention to expropriate all transactions in the complex, six months from the date of his notification.
In this situation, the parties will have a period of six months at their disposal In the process, they must agree on an outline that will allow all the apartment owners to sign with one of the developers (partnership, purchase from each other, sale to a third party, etc.). The parties can, according to their choice, be assisted by the governmental authority for urban renewal for the purpose of promoting the agreements between them, or act on their own to formulate Agreements as stated within the time period.
If such agreement is not reached within six months, the CEO of the government authority can exercise his authority under the law, and authorize the apartment owners to release themselves from the existing agreements with the developers, without this being considered a breach of contract.
This approval will allow the apartment owners to cancel the deal, and choose a new developer in a competitive, orderly and organized process.
This legislative amendment was separated from the package of legislative amendments in the field of urban renewal in the last Law of Arrangements, and it is now being promoted, separately, due to its importance for the promotion of dozens of complexes, in which the processes of urban renewal have been delayed for many years due to the aforementioned circumstances.
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Examples of projects stuck for over a decade
The bill and the outline underlying it were formulated based on experience accumulated by the government authority in creating agreements between entrepreneurs who applied to it for assistance in promoting projects that were stopped due to the involvement of several entrepreneurs in one complex.
Among these projects, the Herzl complex in Beer Ya'akov, which was promoted for about 10 years by two different developers.
Following the involvement of the government authority, a cooperation agreement was signed between the developers and they are currently working together to advance the project in the complex.
Another example is the Bialik complex in Beit Shemesh, where the government authority helped to settle the relationship between two entrepreneurs who had been operating there, for over a decade, in a way that prevented the realization of a broad construction evacuation plan in the complex.
As part of the procedure, a pricing procedure was carried out between the developers, at the end of which one developer purchased his share of the project from the other.
"Horizon for many ventures that have come to a dead end"
Yitzhak Goldknopf, Minister of Construction and Housing: "The difficult period that the State of Israel is going through illustrates the urgent need to carry out urban renewal, all over the country and as quickly as possible, without compromising on quality. The amendment to the legislation that will be put forward will provide an answer to many residents, who have already started the process but have been caught, not In their favor, to a dead end."
Elazar Bamberger, CEO of the Governmental Authority for Urban Renewal: "The amendment to the legislation that will come up for discussion reflects the experience we have gained from dealing with projects that have been paralyzed, and provides a solution to a broad need that exists in the field.
The new mechanism that we are promoting will allow the entrepreneurs significant time to formulate agreements between them, and at the same time will allow the apartment owners to be released from their contracts, in the event that these agreements are not reached.
We believe that the new arrangement will give perspective to many projects that have come to a dead end under such circumstances in recent years, characterized by massive activity of entrepreneurs who have entered the field of urban renewal."
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