Israel’s Sale Law Commissioner Clarifies that Urban Renewal Transactions Must Comply with Provisions of Sale Law
On July 24, 2017, the Sale Law Commissioner in the Israeli Ministry of Construction and Housing published two clarifications regarding the Sale Law (Apartments) (Securing Apartment-Buyers’ Investments).
The first clarification concerns urban renewal projects relating to Pinui-Binui (evacuation and reconstruction) projects and NOP 38/2 (demolition and reconstruction) projects. The commissioner clarified that in evacuation and reconstruction projects, all of the apartment owners’ rights are sold to the entrepreneur, including both the rights in the apartment and the additional unutilized building rights. In this instance, the entrepreneur is required to comply with the provisions of the Sale Law and, inter alia, to report to the commissioner about apartment sales, inform the apartment owners about the receipt of surety as required by law, and guarantee the apartment owners’ rights either through a bank guarantee or an insurance policy at the value of the new apartment.
The second clarification relates to the sale agreement between sellers and buyers during both evacuation and reconstruction transactions and demolition and reconstruction transactions. In instances when the agreement contains a suspending condition, the agreement will be deemed a valid contract pursuant to the Sale Law as of the date of its signing and not as of the date the suspending condition is fulfilled.