"Seller" – a person who sells an apartment that he has built or is about to build himself or by another person, on his own land or of others, in order to sell it, including a person who sells an apartment who bought it, in order to sell it, from a person who built it or is about to build it as aforesaid, except for the seller of an apartment who did not build it himself and did not receive consideration from the buyer for its sale."
Section 2 The Apartment Sale Law states that:
"A seller shall not receive from a buyer, at the expense of the price of the apartment, an amount exceeding seven percent of the price, unless he has done one of the following, all notwithstanding what is stated in the sale contract:
- He gave the buyer a bank guarantee to guarantee the return of all the money paid to him by the buyer on account of the price, except for the VAT component...
Hence, the appellant, who built the apartments on land owned by the State, is included in the definition of "seller" according to The Sale of Apartments Law, and therefore the guarantees were given by it in accordance with the said law, and the granting of these guarantees does not tip the scales in favor of the respondent's claim, and it cannot be determined solely because the appellant has a "right in the land" within the meaning of the law.
- The Respondent proceeds from a point of assumption, in view of the definition of "rent" in the Land Law, which states that it is a right granted in exchange for holding the land and using it indefinitely, but this Subject to restrictions by law or agreement, that the existence of contractual restrictions in the contractual system signed by the appellant does not exclude it from the definition of "lease" and, accordingly, from the definition of "lease" according to Real Estate Taxation Law.
I am of the opinion that the respondent is erroneous in his interpretation of the law.
- Indeed, parties to a lease or lease agreement – landlord and tenant, lessor and lessee – are entitled to set conditions and restrictions on the right granted by the landlord or lessor to the tenant/lessee, to the same extent that a property owner can undertake another to limit himself in the possession and use of the property. However, as stated above, for the purposes of legal interpretation under the tax laws, a material examination of the content and intensity of those restrictions imposed on the lessee is required, in order to determine whether these are restrictions that, in themselves, or accumulate together, impair or negate the lessee discretion and freedom to hold and use the property uniquely or independently, and to impair or negate the lessee ability to enjoy the use of the land and derive economic pleasure from it for the purpose of achieving its profits.
In the case before us, as detailed, reasoned and explained at great length above – the fact that the appellant signed a contract entitled "lease contract" and the fact that it stated in it that the lease period is 98 years with an option for an additional 98 years – do not close the door on determining the legal nature of the contractual engagement between the parties to the lease contract. This is because that the lease contract contains additional stipulations, including in the Appendix to the Special Terms, which prevail over the terms of the lease contract in the event of a contradiction, and in addition, the provisions and limitations in the construction contract, which is an integral part of the entire contractual system, as well as the documents of the control company, create significant restrictions on the appellant in terms of possession and use of the land.