As someone who handles transactions for the purchase and sale of apartments and other real estate properties, I frequently encounter the question of why I am not registered in the Land Registry (Tabu) as the owner but "only" as a lessee, and what does this mean? It is difficult for the ordinary person to understand, for example, why when purchasing a house in Ramat Poleg in Netanya, they must lease (a lease is a long-term rental) the real estate from the Administration instead of receiving ownership of it .
The Israel Land Administration holds most of the land in the country, and the purchaser of land registered as land owned by the Administration effectively acquires a leasehold right to the land for a long period, while theoretically, the ownership of the land remains with the state through the Israel Land Administration. In contrast, a purchaser of privately owned property may register it as property owned by them in the Land Registry (the Tabu).
From a legal standpoint, the private ownership right is of course preferable. The purchaser of this right ensures greater flexibility in building and selling the property and generally can do as they wish with the property without the need to obtain the approval of the Israel Land Administration and the bureaucracy every time they wish to perform any action on the land. In contrast, when it comes to property owned by the Israel Land Administration, the right is a lease only, in exchange for lease fees, and any action (for example, sale or construction) requires approvals from the Administration and often involves payment. Today it is possible to capitalize the land (that is, to pay the lease fees in advance until the end of the period) and receive a right that is not far from the right of ownership, as the Administration's approval will no longer be required until the end of the lease period (which is usually for periods of 49 years).
While theoretically there is a difference between a capitalized lease right and an ownership right, in practice the difference today is not material and mainly comes down to the fact that the Administration is registered as the owner. It is important to note that new apartments or houses are mostly registered in a third and informal registry known as a "housing company". When a contractor (a housing company) builds a project, the process of "registering a condominium" in the Tabu can take a long time, and until then, the registration of ownership (or lease) will be in the name of the contractor, and all the purchasers of the housing units will have is the registration of a warning note in the Tabu regarding their right to the apartment. The contractor will manage a registry of the ownerships and manage the transfers of ownership and mortgages, and upon the regulation of the registration in the Tabu, these details will be transferred to the Land Registry. Since many times there is no incentive for the contractor's lawyers (who received their money in advance) to finalize the registration of the real estate in the name of the purchasers, many houses in Israel have been registered with the housing company for decades. One of the risks in this is that in the event the housing company ceases to exist, registering the ownership in the Tabu in the name of the apartment purchasers may require an application to a court to obtain a judicial order directing the registration of ownership in the Tabu in the name of the apartment purchaser.
Therefore, it is important to ensure that the rights in the property you purchased will indeed be registered in your name in the Tabu. In conclusion, ostensibly in many cases the difference between the manner of registering rights in a property (lease, capitalized lease, housing company, and ownership) is not reflected in daily life until we seek to perform certain actions on the property. It is important that the lawyer handling the real estate transaction is familiar with the different types of registration of rights and knows how to handle them correctly.