{"id":2831,"date":"2025-05-20T11:30:57","date_gmt":"2025-05-20T11:30:57","guid":{"rendered":"https:\/\/benyacov.com\/?p=2831"},"modified":"2025-05-29T11:43:21","modified_gmt":"2025-05-29T11:43:21","slug":"new-regulations-help-tenants-exit-urban-renewal-deals","status":"publish","type":"post","link":"https:\/\/benyacov.com\/en\/new-regulations-help-tenants-exit-urban-renewal-deals\/","title":{"rendered":"New Regulations Help Tenants Exit Urban Renewal Deals \u2014 But Not Everyone&#8217;s Happy"},"content":{"rendered":"\n<p dir=\"ltr\"><strong>Justice Minister signs off on new rules that allow apartment owners to cancel contracts with developers who didn\u2019t meet obligations. But lawyers warn the compensation mechanism could encourage middlemen. Ministry: \u201cThe fines are much lower than normal contract penalties.\u201d<\/strong><\/p>\n\n\n\n<p dir=\"ltr\"><strong>By: Amiram Gil<\/strong><\/p>\n\n\n\n<p dir=\"ltr\">If you&#8217;ve owned a flat in a renewal project in recent years, you probably know the feeling: the project stalls, nothing moves forward, and you&#8217;re stuck with a developer who doesn\u2019t deliver. This happens in both demolition-rebuild (Pinui-Binui) and TAMA 38 (seismic reinforcement) tracks.<\/p>\n\n\n\n<p dir=\"ltr\">The law already allows residents to cancel deals in such cases and sign with a new developer, but many are hesitant. Why? Because canceling the deal might mean owing large compensation to the original developer.<\/p>\n\n\n\n<p dir=\"ltr\">It\u2019s a complicated situation. Developers may have already invested heavily in the project \u2014 only to get stuck in bureaucratic approval stages through no fault of their own.<\/p>\n\n\n\n<p dir=\"ltr\"><strong>That\u2019s why Justice Minister Yariv Levin recently signed new regulations<\/strong> that define exactly how much compensation developers can receive if residents cancel their contracts. The goal, says the Ministry of Justice, is to balance between the rights of developers and the need to let homeowners move on and work with someone who will actually get the job done.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-left\">Key Points of the New Regulations:<\/h3>\n\n\n\n<p dir=\"ltr\"><strong>Pinui-Binui (Demolition-Rebuild Projects)<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>If the developer signed with less than <strong>20%<\/strong> of apartment owners \u2192 <strong>No compensation<\/strong><\/li>\n\n\n\n<li>After <strong>2 years<\/strong>, if the developer hasn\u2019t signed at least <strong>50%<\/strong> \u2192 residents owe <strong>\u20aa5,000 per apartment<\/strong><\/li>\n\n\n\n<li>After <strong>4 years<\/strong>, with less than <strong>60% signed<\/strong> \u2192 <strong>\u20aa7,000 per apartment<\/strong><\/li>\n\n\n\n<li>After <strong>4.5 years<\/strong>, if the developer hasn\u2019t submitted plans to planning authorities \u2192 <strong>\u20aa10,000 per apartment<\/strong><\/li>\n\n\n\n<li>If the developer is a <strong>public body (like a municipality)<\/strong> \u2192 All compensation <strong>cut in half<\/strong><\/li>\n<\/ul>\n\n\n\n<p dir=\"ltr\"><strong>TAMA 38 Projects (Seismic Reinforcement)<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>If the developer signed with <strong>less than one-third<\/strong> of residents \u2192 <strong>No compensation<\/strong><\/li>\n\n\n\n<li>After <strong>18 months<\/strong>, with less than <strong>50% signed<\/strong> \u2192 <strong>\u20aa500 per apartment<\/strong><\/li>\n\n\n\n<li>After <strong>3 years<\/strong>, if less than <strong>two-thirds<\/strong> signed \u2192 <strong>\u20aa700 per apartment<\/strong><\/li>\n\n\n\n<li>After <strong>3.5 years<\/strong>, if no permit request submitted \u2192 <strong>\u20aa1,800 per apartment<\/strong><\/li>\n<\/ul>\n\n\n\n<p dir=\"ltr\">In all cases, the developer must remove any lien (&#8220;warning note&#8221;) registered on the property to receive the payment.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">Goal: Cut Down on &#8220;Signature Traders&#8221;<\/h3>\n\n\n\n<p dir=\"ltr\">The National Authority for Urban Renewal, which helped draft the rules, believes this will reduce cases where developers collect signatures just to resell them to someone else.<\/p>\n\n\n\n<p dir=\"ltr\">&#8220;Many homeowners avoided signing before because they didn\u2019t know how much they\u2019d owe the developer if they canceled,&#8221; says Adv. Idan Ben-Yacov. &#8220;Now there\u2019s clarity. This puts pressure on developers to stop dragging their feet.&#8221;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-left\">Lawyers: Developers Shouldn&#8217;t Be the Only Ones Getting Paid<\/h3>\n\n\n\n<p dir=\"ltr\">Some lawyers argue that <strong>residents should also receive compensation<\/strong> if they waste years stuck in failed projects.<\/p>\n\n\n\n<p dir=\"ltr\">\u201cIt\u2019s unfair that homeowners lose years and miss out on better opportunities without compensation,\u201d say attorneys Amir Adika and Tal Kadari in a legal opinion. \u201cIn some cases, people lose thousands of shekels a month due to the value gap between old and future apartments.\u201d<\/p>\n\n\n\n<p dir=\"ltr\">Adv. Yaron Tikotsky agrees: \u201cDevelopers who delay the process should pay damages to residents.\u201d<\/p>\n\n\n\n<p dir=\"ltr\">But others worry the new rules reward &#8220;signature contractors&#8221; \u2014 middlemen who get people to sign deals they can\u2019t deliver on.<\/p>\n\n\n\n<p dir=\"ltr\">&#8220;Developers are being penalized generically, even when delays are caused by external factors,&#8221; say Adika and Kadari. &#8220;There\u2019s no distinction between serious developers and negligent ones. That\u2019s illogical.&#8221;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-left\">Ministry\u2019s Response: This Helps Residents<\/h3>\n\n\n\n<p dir=\"ltr\">The Ministry of Justice responded:<br>\u201cThese regulations are designed to help apartment owners exit bad deals without having to go through lengthy legal battles. The fines are much lower than standard breach-of-contract penalties. This gives homeowners flexibility and legal certainty.\u201d<\/p>\n\n\n\n<p dir=\"ltr\">They also noted the rules prevent shady practices:<br>\u201cIf a developer signed only a small portion of the residents, they\u2019ll receive <strong>no compensation<\/strong> \u2014 eliminating the incentive for signature traders.\u201d<\/p>\n\n\n\n<p dir=\"ltr\"><sub>**This translation is an approximation of the original article published in Hebrew by <em>Globes<\/em>. While care was taken to convey the main ideas and details accurately, certain phrases and legal terminology may have been simplified or adapted for clarity in English. For the full and official version, please refer to the original Hebrew publication.<\/sub><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Justice Minister signs off on new rules that allow apartment owners to cancel contracts with developers who didn\u2019t meet obligations. But lawyers warn the compensation mechanism could encourage middlemen. Ministry: \u201cThe fines are much lower than normal contract penalties.\u201d By: Amiram Gil If you&#8217;ve owned a flat in a renewal project in recent years, you [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":2744,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4,3],"tags":[],"class_list":["post-2831","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","category-news"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>New Regulations Help Tenants Exit Urban Renewal Deals \u2014 But Not Everyone&#039;s Happy - Ben-Yacov Law Firm<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/benyacov.com\/en\/new-regulations-help-tenants-exit-urban-renewal-deals\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"New Regulations Help Tenants Exit Urban Renewal Deals \u2014 But Not Everyone&#039;s Happy - Ben-Yacov Law Firm\" \/>\n<meta property=\"og:description\" content=\"Justice Minister signs off on new rules that allow apartment owners to cancel contracts with developers who didn\u2019t meet obligations. 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