(Tel Aviv) 1728/22 Sheinman Nava v. Agmon Israela

Ministry of Justice

Tel Aviv – Jaffa

Judgment

1. A claim for an order authorizing the execution of a TAMA 38 project of the type of demolition and reconstruction of a condominium for the purpose of reinforcing it against earthquakes, in accordance with the provisions of Section 5A of the Real Estate Law (Reinforcement of Condominiums against Earthquakes), 5768-2008 (hereinafter - the "Reinforcement Law"), in view of the refusal of the defendants, owners of apartments in the condominium, to carry out the project.

The Facts Relevant to the Matter and the Proceeding

2. The lawsuit concerns a condominium at 7 Biltmore Street in Tel Aviv-Yafo, which is located near Kikar HaMedina, which is registered in the Condominium Register, Plot 964 in Block 6213 (hereinafter - the "Condominium").
3. The condominium, which was built in the early 1960s, consists of a single 5-story building and includes 13 apartments, as stated in the Condominium Registration Order of January 2, 1963.
4. The Ottoman Settlement [Old Version] 1916According to the Condominium Registration Order, condominium apartments do not include any attachments, and can be classified into 4 groups according to their size: a one-room apartment located on the basement floor with an area of 15.64 sq.m.; 2 apartments on the ground floor with an area of 48.43 sq.m.; 4 apartments located on the ground, first, second and third floors with an area of 61.64 sq.m.; and 6 apartments on the first, second and third floors with an area of 82.86 sq.m.
5. 12-34-56-78 Chekhov v. State of Israel, P.D.  51 (2) Plaintiffs 1-8 are the owners of 11 apartments in the condominium (hereinafter - the "Plaintiffs").  This includes Plaintiff 1 and Plaintiff 4.
6. Plaintiff No. 1, Nava Sheinman (hereinafter - "Sheinman"), is the owner of two apartments in the condominium, an apartment on the ground floor and an apartment on the first floor, with an area of 61.64 square meters, which are registered in the Condominium Register for subplots 4 and 7.
7. Plaintiff No. 4, Yehuda Poliker (hereinafter - "Poliker"), is the owner of 5 apartments in the condominium, including the apartment on the basement, the two apartments on the ground floor, an apartment on the second floor and an apartment on the third (last) floor, with an area of 61.64 square meters, which are registered in the Condominium Register for subplots 1, 2, 3, 10 and 13. In practice, the Poliker apartments on the second and third floors are connected by internal stairs between them.  The apartment on the third floor has stairs to another room that was built on the roof of the condominium, which is about 26 square meters, and from there there is an exit to a roof terrace of about 50 square meters.  Poliker also makes unique use of the roof of the additional room that was built on the roof of the 26 square meter condominium.
8. Defendant 1, Israela Agmon (hereinafter - "Defendant 1"), is the owner of an apartment in the condominium with an area of 82.86 square meters, which is registered in the Condominium Register under Plot
9. Defendant 2, Nili Kiren (hereinafter - "Defendant 2"), is the owner of an apartment in the condominium with an area of 82.86 square meters, which is registered in the Condominium Register, subplot 9.
10. On August 13, 2020, the plaintiffs entered into an agreement with Ram Mughrabi Arditi 357 in a tax appeal (hereinafter - the "Entrepreneurial Company") in an agreement for the execution of a TAMA 38 project in a condominium of the demolition and reconstruction type, including three additions to the agreement (hereinafter - the "Agreement"). The project being prepared in the condominium is expected to be carried out jointly with the demolition and reconstruction of a condominium at 9 Biltmore Street in Tel Aviv, and to include a shared parking basement for the two buildings.
11. On June 8, 2022, the decision of the Local Planning and Building Committee in Tel Aviv-Yafo was given to approve, under conditions, the application for a building permit for the execution of a TAMA 38 project in the condominium.
12. Quoted from NevoThere is no dispute that the plaintiffs meet the prerequisites for filing the lawsuit - the existence of a building permit as defined in section 1 of the Reinforcement Law, as required in accordance with the provisions of section 2 of the law, and meeting the threshold of consent (a required majority) among the apartment owners in the condominium, as required in accordance with the provisions of section 5A of the law.
13. In accordance with the agreement and the conditional permit, the existing house will be demolished and a new residential building will be built in accordance with Israeli Standard 413 for the Resistance of Buildings to Earthquakes. The new condominium will include 27 apartments, of which 12 are owned apartments.  The building will consist of 5 floors and 2 partial roof floors, above the ground floor and 2 basement floors that include parking spaces, apartment warehouses and technical facilities.  All floors of the building will have a first-floor foyer, a general staircase of the building, 2 elevators and shared infrastructure shafts.
14. In accordance with the agreement, the 12 apartments in consideration for the owners will include the addition of a main area of 20 square meters, including a protected space for an apartment (safe room), a sun terrace, an ascent of 2 floors from its current location, as well as the attachment of regular covered parking (underground) and a storage room. In addition, the developer company will pay the owners rent for a period of 30 days before the date of eviction until the date of delivery of possession of the new apartment, as well as the cost of transportation (to the alternative housing and back to the new apartment).  In addition, in accordance with the agreement, the developer company will contract with a lending bank for the purpose of obtaining financial support for the project, and will also provide the owners with guarantees and guarantees, including a sales law guarantee for the full value of the new apartments.
15. In accordance with the agreement, each defendant is entitled to an apartment in a new building that is reinforced against earthquakes, with a main area of 107.5 square meters, which includes a safe room, a sun terrace of about 14 square meters, conventional standard underground parking, and a warehouse on the basement floor.
16. In the statement of defense, defendant 1 petitioned to dismiss the claim. According to her, in accordance with the agreement, Poliker and Sheinman enjoy unequal surplus considerations, both in relation to the addition of the areas to the consideration apartments, and in relation to the participation of the entrepreneurial company in paying excess taxes in their case.  Poliker illegally took over areas of common property in the condominium and carried out illegal construction over the years, due to the (illegal) increase in the area of his apartments, which served as a basis for calculating the considerations in accordance with the agreement in an incorrect and discriminatory manner.  In the meantime, as claimed, the condominium includes 12 apartments and a storage room, so that the unit owned by Poliker on the basement floor should not be considered an apartment and in any case does not entitle him to the addition of a main area.  As further claimed, it was defendant 1 that led the execution of the TAMA 38 project in the condominium in the first place, but due to Poliker's "demands and whims", another entrepreneurial company refused to carry out the project, leaving it on the margins of the economic feasibility of carrying it out in accordance with the agreement.  In the meantime, defendant 1 clarified that despite her opinion that the proper compensation mechanism is to add areas relative to the area of the existing apartment, she agrees to provide a uniform addition of main area for each apartment in the condominium but opposes the provision of excess consideration to Poliker and Sheinman.  In addition, defendant 1 argued that the construction of the joint parking lot for the condominium and the condominium at 9 Biltmore Street amounts to an infringement of defendant 1's property rights in the condominium, since it is required to provide an interest interest.
17. In the statement of defense, defendant 2 petitioned to dismiss the claim. According to her, the compensation mechanism set out in the agreement amounts to a violation of equality of consideration in light of the "excessive, extreme and extreme" considerations given to Poliker and Sheinman, who own about half of the apartments in the condominium, while trampling on the defendant's rights.  This is both in relation to the addition of the areas to the consideration apartments of these plaintiffs, and in relation to the provision of significant benefits, including the upgrading of the technical specifications, the construction of a salt room and a wet sauna for one of Poliker's consideration apartments, and the payment of rent for units that are not residential apartments, and in relation to the provision of large sums of money for tax payments.  In addition, as claimed, the considerations given to Poliker in accordance with the agreement are based on areas of common property that the plaintiff illegally took over over the years, including illegal construction on the roof of the condominium, as well as on the identification of the room on the basement floor as a residential apartment, not in accordance with its designation, and by virtue of which Poliker is entitled to considerations identical to the 12 residential apartments in the condominium, and while determining the size of this room incorrectly, in contravention of the condominium registration order.  As further claimed, Poliker received the consent of the apartment owners in the condominium to build a room on the roof of the condominium with an area of 23 square meters, and not in an area of 26 square meters as stated in the agreement, and also received the consent of the apartment owners to build a balcony of 38.7 square meters, and not an area of 50 square meters as specified in the agreement.  Alongside the excess consideration given to Poliker, the entrepreneurial company acquires a significant advantage, both in holding the consent of Poliker, a "strong tenant with great influence" in the condominium, and in receiving "in improper ways" the consent of Poliker, who, in light of the false representation created by the developer, "controls 5 apartments", and is not her.  With regard to Sheinman, which owns 2 apartments in the condominium (located on the ground and first floors), one of the consideration apartments rises to the 6th floor of the new condominium that will be built, in contrast to the mechanism of ascending the floors set out in the agreement, the uniform addition of space is relatively larger than the addition of the area of the Sheinman apartment, and the entrepreneurial company bears the taxes imposed on Sheinman due to the execution of the project, in the form of excess considerations.  According to defendant 2, the principle of equality of consideration should be applied in light of the criteria set in Pinui-Binui projects, according to which, as claimed, every apartment owner in a condominium is entitled to consideration that reflects his relative share in the building rights in the condominium.  This is in accordance with the substantive, quantitative test set out in case law.  In addition, as determined in the opinion of a real estate appraiser attached to the statement of defense, there is a clear material inequality with respect to the distribution of the considerations in accordance with the agreement, both according to the relative value and according to the uniform addition method.  In addition, as claimed, the construction of the shared parking lot amounts to a violation of defendant 2's proprietary rights in the condominium.  The reasons for defendant No. 2's refusal are also the claim of overcrowding due to the multitude of apartments and poor planning, while losing the special character of the condominium in comparison to other similar projects, such as the condominium at 5 Biltmore Street and the condominium at 15 Biltmore Street in Tel Aviv.
18. The defendants attached to the statements of defense the farm of real estate appraiser Assaf Levy dated February 7, 2023, in which the expert was required to "examine the appropriate consideration" for the defendants' apartments as part of the implementation of a TAMA 38 project in accordance with the agreement, and to examine the "uniformity" of the considerations given to all apartment owners in the condominium in accordance with the agreement. According to the opinion, due to the excess considerations given to Poliker and Scheinman in accordance with the agreement, the consideration given to each of the defendants amounts to a violation of the estimated consideration equality in the sum of ILS 1,496,000 (according to the relative share of the apartments in the sharing house) and in the sum of ILS 1,055,000 (according to the addition of uniform consideration).
19. On March 19, 2023, a pre-trial meeting was held before me to clarify the claim. In the framework of it, the parties agreed to the outline "for the clarification of the disputes that are the subject of the lawsuit, according to which a real estate appraiser, an expert on behalf of the Supervisor of Land Registration, will be appointed to give an opinion on the question of whether the principle of equality of consideration in relation to the defendants' consideration apartments has been violated, given an examination of a violation of this principle in view of the differential consideration of the increase in the area of the apartments (square meters), including the increase in floors in the new condominium that will be built.  The areas of the existing apartments will be derived from their area in the condominium registration order and a building permit that can be given to expand the plaintiff's apartment 4 [Poliker] on the roof of the condominium, both a built-up area and the attachment of a roof terrace.  The consideration apartments will be examined in accordance with the entire contractual system signed between the developer company and the parties to this claim, including the agreement, an addendum to the agreement (signed with plaintiff 4) and an additional addendum to the agreement (signed with the apartment owners in the adjacent building)."
20. On March 28, 2023, the plaintiffs petitioned for the appointment of the agreed expert, since the parties were unable to agree on the identity of the expert within the limits of the extension they were given to do so at the time of the hearing.
21. In a decision dated April 2, 2023, I ordered, with the consent of the parties, in accordance with the decision of March 19, 2023 and the provisions of Regulation 88(d) of the Civil Procedure Regulations, 5779-2018, the appointment of the real estate appraiser, economist and attorney Shlomi Maaravi, an expert on behalf of the Supervisor of Land Registration (hereinafter - the "Expert"), to give an opinion on the question of whether, in accordance with the agreement (which includes, as aforesaid, the equality of the consideration was violated, while comparing the consideration given to each of the defendants' apartments with the considerations given to the other apartment owners in the condominium). The basic assumption for examining the violation of the principle of equality of consideration is the relative share of the parties' apartments in the building rights in the condominium in accordance with the condominium registration order, which is their relative share of the common property.  To the extent that one of the parties lawfully exploited building rights during the years following the construction of the condominium for the purpose of expanding his apartment and attaching parts of the common property to the apartment, such as Poliker, these building rights will be taken into account in the framework of calculating his relative share of the building rights for the execution of a TAMA 38 project in the condominium.  The examination of the violation of equality of consideration will be in relation to all the components of the consideration given to the apartment owners in accordance with the agreement.
22. On March 24, 2024, the expert opinion was submitted to the file. On May 30, 2024, the expert responded to clarification questions on behalf of defendant 1 and defendant 2.
23. In the decision of May 30, 2024, I granted the request of defendant 2 and ordered a meeting for the expert's examination of the opinion, which took place on July 25, 2024.
24. On September 18, 2024, an additional meeting was held for the expert's interrogation at the request of defendant 1 and the plaintiffs.
25. At the end of the hearing, I presented the parties with an outline for ending the disputes by consensus, which was discussed in additional meetings that took place on October 10, 2024 and December 22, 2024.
26. On December 22, 2024, a partial judgment was issued in the matter of defendant 1, with the consent of the parties at the hearing. In accordance with the partial judgment, defendant 1 will sign the agreement.  The entrepreneurial company added another plaintiff in the lawsuit, plaintiff 9.  In accordance with the partial judgment, in the dispute that remains to be decided on the question of the violation of the principle of equality of consideration, to the extent that it is determined that this principle has been violated in relation to defendant 1, the remedy of the injury will be by way of monetary compensation instead of compensation in kind, to which the entrepreneurial company will be liable.  For the purpose of deciding the dispute, the parties will submit summaries on the dates as detailed in the judgment (hereinafter - the "Partial Judgment").
27. As for defendant 2, I have set dates for the submission of written summaries.
28. On February 9, 2025, after a change of representation (in the third instance), defendant 2 petitioned for the dismissal of the claim, in an attachment to the motion dated January 16, 2025, for "the conduct of a fair trial" for the purpose of "completing preliminary proceedings, submitting evidence and hearing evidence".
29. In a reasoned decision dated March 6, 2025, I ordered the rejection of defendant 2's motion to dismiss the claim, since its laconic claim regarding the "intention" of the entrepreneurial company to conduct "negotiations on the subject of considerations" with the plaintiffs, as the motion put it, is not sufficient, taking into account that the plaintiffs signed the agreement. In any event, in the absence of support and basis for these factual claims, including by means of an affidavit as required by law.  In addition, I rejected defendant 2's request for a "fair trial", since in accordance with the decision of April 2, 2023, the dispute resolution expert who is the subject of the lawsuit was appointed to give an opinion on the question of whether the equality of consideration was violated by comparing the consideration given to each of the defendants' apartments with the consideration given to the other apartment owners in the condominium, with respect to all the components of the consideration in accordance with the agreement.  The expert was questioned about his opinion in two separate meetings, and after these meetings meetings were even held to assist the parties in ending the disputes by consent.  At the request of the parties, they were given extensions to advance the conclusion of the disputes by consent.  In the case of defendant 1, a partial judgment was rendered, as stated.  In the case of defendant 2, dates were set for the submission of written summaries.
30. The plaintiffs and defendant 1 submitted summaries.
31. No summaries were received on behalf of defendant 2.
32. On April 7, 2025, defendant 2 filed a "Motion to Delete the Claim". The motion should be dismissed, since the court that issued the decision on a repetition in the same matter should not be approached when the claims are 'appealable' in nature (see also: Civil Appeal Authority 1574/11 Strauss Marketing in Tax Appeal v.  Orman, published in Nevo (July 14, 2011); Civil Appeal Authority 7127/22 Elhai v.  Mansour, published in Nevo (January 29, 2023); Civil Appeal Authority 2406/23 Anonymous v.  Anonymous, published in Nevo (June 22, 2023)).
33. In the decision of February 15, 2026, I granted, beyond the letter of the law, defendant No. 2's request for an extension to file a statement of summaries, since it was filed many months after the date on which it should have submitted its summary statement, close to the date of the decision of March 6, 2025, which rejects its motions as aforesaid.
34. Defendant 2 submitted a statement of summaries.
35. I will present below the main arguments of the parties in the summaries.

The main arguments of the parties

36. According to the plaintiffs, the claim should be accepted and the execution of a TAMA 38 project in the condominium should be approved in accordance with the agreement, while paying financial compensation in the sum of ILS 11,333 to each of the defendants. This is in accordance with the expert opinion, taking into account the balance of all the considerations in accordance with the agreement, including the considerations given to Polyker, in accordance with the 'area index' determined in the case law, and given the correct determining date for determining the value of a square meter built in the condominium which is the date of signing the agreement for the execution of a TAMA 38 project in the condominium (August 13, 2020).  In the meantime, the plaintiffs petitioned to postpone the expert's determination that the date of giving the opinion is the determining date for determining the value of a square meter built in the condominium, since it is an arbitrary date that depends on the pace of conducting the legal proceedings and the expert's workload, and since the expert did so only when he was not asked otherwise.  This is even by analogy with the provisions of the Planning and Building Law by virtue of which the determining date for the assessment of betterment levy following a betterment plan is the date of the start of the plan, given the identical rationales between the plan that improves the value of a real estate asset and an agreement for the execution of a TAMA 38 project in a condominium.  In accordance with this, as claimed, a rate of 18%-20% of the value of 1 built square meter determined by the expert in the opinion should be reduced.  As further claimed, the amounts of the expert opinion should be updated in accordance with the correct and up-to-date area of Sheinman's apartment, since it was clarified within the framework of the clarification of the claim in question that the plans according to which the expert prepared the opinion were not up to date, while plans were submitted to the Tel Aviv Municipality according to which the area of the Sheinman apartment was reduced by 4 square meters from what was stipulated in the agreement.

The plaintiffs further petitioned to dismiss the claim of harm to the value of the considerations due to the undertaking of the entrepreneurial company to bear betterment tax applicable to the Poliker apartments, since it was determined in case law that this should not be considered excess consideration.  Without derogating from the aforesaid, since, according to an updated opinion of an accountant, the amount of this tax was significantly less than the amount claimed.  Moreover, Poliker is the one who receives a reduced consideration, since despite being the owner of 5 apartments in the condominium and his entitlement to receive 4 warehouses and 4 parking spaces in the new building that will be built according to the compensation mechanism set out in the agreement, Poliker receives 3 parking spaces and 1 warehouse, which puts him in a shortfall of about ILS 1.5 million compared to the consideration given to the other apartment owners in the condominium, including the defendants.

37. According to defendant 1, there is no dispute that Poliker and Scheinman were given excess considerations, which amount to severe and extreme discrimination. The dispute is only on the question of the amount of these excess considerations, and accordingly the amount of financial compensation that the entrepreneurial company must pay to defendant 1, which it claims amounts to ILS 1,067,451.  In more detail, as claimed, in accordance with the agreement, Poliker and Scheinman enjoy surplus considerations with respect to the areas of the apartments and balconies and their location, while Poliker also enjoys excess considerations related to participation in the financing of taxation, financing attorney's fees and architect's costs, bearing all the costs of transporting the equipment in his apartments without limiting the amount, payment of rent in relation to the warehouse he owns in the condominium, and additions to specifications that include a salt room, a wet sauna and real wood parquet cladding in all the rooms.  This separate and beneficial agreement signed with Poliker was hidden from the apartment owners until the date of filing the claim.  Even though Scheinman enjoys excess consideration in terms of participation in tax financing and an increase in floors beitar, not in accordance with the mechanism set out in the agreement.  With regard to the amount of monetary compensation to which defendant 1 is entitled due to a violation of the parity of consideration, it was argued that the expert's opinion contained material and significant flaws, errors that the expert admitted in the course of his cross-examination.  Therefore, the assessment of the excess considerations should be determined and the amount of compensation for defendant 1 should be determined accordingly in accordance with all the relevant variables as detailed in the summary statement (which will be discussed at length in the discussion and decision chapter below).  In the meantime, as claimed, the 'value index' and not the 'area index' should be adopted to assess the impairment of the considerations, since the value index takes into account clear, measurable and objective classical variables, the main of which are the area of the property, the type of property, the floor on which the property is located, air directions, density and the number of apartments, as required.

With regard to the determining date regarding the value of a square meter built in the condominium, defendant 1 agreed with the plaintiffs that the 'date of the preparation of the expert opinion', a random date chosen by him in the midst of the 'iron sword' war when the entire economy was at a low point, should not be adopted.  In the meantime, defendant 1 petitioned to dismiss the plaintiffs' claims to set it on the 'date of signing the agreement', since the agreement is suspended and has not yet come into effect, the defendant has not signed it, the appendix of the consideration with Poliker does not bear a date at all, the building has not yet been built, the value of the apartments is unknown and the consideration has not yet been paid to the owners.  According to defendant 1, the relevant date is the 'payment date', alternatively, the date of submission of the expert opinion on behalf of defendant 1, and alternatively, the date of filing the claim.