In addition, sanctions were imposed for fundamental violations, including non-compliance with the timetable for construction and delivery of the apartments, while stipulating that the state would be entitled to cancel the contract in cases of a fundamental violation. Although sanctions were also established for the payment of agreed compensation of NIS 450,000 for the breach, even according to the testimonies of the respondent's witnesses – the payment of the agreed compensation does not grant the appellant the right to hold the apartments beyond the date set by the state, and that the state would have acted with all the legal means at its disposal to enforce the building contract and the handing over of the apartments to the tenants. Therefore, the appellant was subject from the date of her winning the "Buyer's Price" tender to the power of the state to instruct it to sell the apartments within a short period of time, as early as possible, to those eligible according to the lotteries.
- The contractual system signed between the appellant and the state set a detailed timetable that the appellant was obligated to meet, as well as an undertaking by the appellant to sell the apartments in accordance with the rules to be determined by the state. As part of the timetable set by the State, through the control company, the appellant undertook to summon the winners of the lottery to choose an apartment and to sign a sale contract with the tenants between 5-14 days after the eligible people chose apartments.
In addition, according to the construction contract, the appellant undertook to issue a Occupancy Approval Form (hereinafter – Form 4) within approximately 40-48 months from the date of its winning the tender. The appellant also undertook that a sale contract would be signed between her and the winners of the lottery for an apartment in the "Buyer's Price" within 101 days from the date of receipt of the building permit or the conditional permit.
- It therefore follows that the period of time from the date of winning the "Buyer's Price" tender to the date of entering into agreements with the tenants ranges from a few months to a maximum of three and a half years, depending on the progress of the issuance of the permits. The understanding and intention of the parties, as anchored in the contractual system of the "Buyer's Price" tenders, is that at most, the appellant will hold the land for a period of a period of a few years in order to realize the purpose of the "Buyer's Price" project. Therefore, there was certainty that the appellant would not have an enforceable legal right to hold the land for more than 25 years.
- The appellant did not receive the status of a lessee in the land, even during the short period in which she held the land.
According to the law, not all possession and use of land amounts to a lease, and in order for possession and use of land to be considered a lease, it is required that the maximum economic enjoyment of the land and control of the land be in the hands of the lessee who will be entitled to perform actions at his discretion, enjoy the chances and take risks at his discretion.
- In light of the scope and quality of the restrictions imposed by the State on the Appellant, in terms of planning, construction, determining the identity of the buyers, the maximum price, the specifications of the apartments, the timetable for sale, supervision and the State's involvement in determining the provisions of the sale contract between the Appellant and the apartment buyers, the supervisory mechanisms, and all the other restrictions on the possession and use of the land, the obvious conclusion is that the Appellant was not given full enjoyment rights or control of the land. These restrictions are unique to the "Buyer's Price" tender and are not typical of regular ILA tenders.
In addition, in the sale contract signed between the appellant and the occupants, the state established a sanction according to which if the tenants wish to sell the apartments before 5 years have elapsed from the date of receipt of Form 4 for the apartment, they will be required to pay compensation in the amount of NIS 450,000 to be paid to the state. So it is clear that the state remains a party to the real estate transaction.
- The State did not grant the appellant rights in the land in the sense Real Estate Taxation Law, and in fact the appellant provided the state with planning, construction and construction services for residential projects and served as a "conduit" through which the state sold its rights in the land to the residents.
- The profit model, risks and prospects in the "Buyer's Price" tender are not characteristic of the purchase of a "right in real estate". The profit model is more substantially similar to contracts in which planning and construction services are provided.
In standard real estate lease tenders, the profit calculation is based on the maximum profit pricing of the developers, which is also affected by fluctuations in the prices of the property. On the other hand, in the "Buyer's Price" tender, the consideration is predetermined for planning and construction services, with the contractors competing for the lowest selling price per square meter of an apartment that will be offered to the resident, and not for the highest price offered to the ILA for the land, and the state even sets the maximum price per square meter of an apartment.
- In relation to the risks and chances – in a regular tender the contractor is exposed to the risks and chances of market price fluctuations one way or the other, there is the possibility of acting to maximize profits, and he has control over the planning and the pace of sales, as well as the possibility of renting apartments and the like.
On the other hand, in the "Buyer's Price" tender, the contractor's risks are in the execution of the construction and in the increase in the cost of planning and construction, and the only chances are only if the contractor succeeds in reducing the costs of planning and construction and thus maximizing his profits. All of these characterize a contractual system of planning and building services and not a contractual system of the acquisition of a "right in real estate". The appellant does not benefit from the chances of an increase in the value of the land or the prices of apartments in the market, and the risks to which the appellant is exposed are minimal.
- The purpose of the "Buyer's Price" tender also supports the position that the appellant did not acquire a "right in the land". The "Buyer's Price" program is the state's flagship program for solving the housing crisis for the homeless, and for this purpose, the state has invested a lot of resources so that they can purchase an apartment at a reduced price, as soon as possible. From the nature of the project and its objectives, it can be learned that there was never any intention to grant the appellant the right to hold the land for a period exceeding 25 years.
- None of the alternatives to the definition of "sale", which is fixed In Section 1 The Real Estate Taxation Law does not apply in the case at hand. The first alternative concerns the granting of a "right in the land", which, as clarified, was not granted to the appellant in light of the essence of the contractual system signed between the State and the appellant, and in particular the appendix to the special conditions, which stipulates that the state will not grant the developer ownership of the land, and in light of the fact that the provisions of the appendix to the special conditions and the building contract prevail over the provisions of the standard lease contract.
- Reference to the second alternative is beyond what is required, since the respondent's decision in the application to amend the assessment referred only to the first alternative of the definition of "sale". The second alternative concerns the granting of a contractual, obligatory right, to receive a right in the land, and this does not exist in the case at hand. For just as the appellant did not receive an enforceable legal right to lease the land for a period exceeding 25 years, so too it did not receive an undertaking to receive a lease right in the land.
- The reference to the third alternative is also beyond what is required, since that the respondent's position in the decision in the application to amend the assessment was that the land was marketed by the appellant herself and transferred directly from it to the purchasers - In other words, the respondent claimed only the existence of the first alternative of "sale". The third alternative deals with the granting of the right to order the grant, transfer or transfer of a right in real estate, and this does not take place in the case at hand, since its application in case law was in situations in which a binding legal right was granted to refer purchasers to the landowners. In our case, the appellant had no right to choose the parties to whom the apartments would be sold. This right was in the hands of the state and not in the hands of the appellant.
According to the terms of the "Buyer's Price" tender and the contractual system that was signed thereafter, the appellant was not granted a binding legal right to instruct the state to grant the "right in the land" to the purchasers to whom the appellant would apply, but on the contrary – the state left in its sole hands the power to determine the identity of the tenants.