Caselaw

(Tel Aviv) 1728/22 Sheinman Nava v. Agmon Israela - part 3

March 25, 2026
Print

As for the execution of the project jointly with a condominium at 9 Biltmore Street with respect to a shared parking basement for the two buildings, since there are mutual benefits on its side, the consent of all the apartment owners is required.  In the absence of the consent of defendant 2, it is not possible to approve the construction of the shared parking basement.

  1. I will therefore turn to the hearing and decision of the claim.

Discussion and Decision

  1. First, I will discuss the normative framework for the legal discussion, both the provisions of the Reinforcement Law relevant to this dispute and the National Outline Plan 38, which are the guiding criteria for examining the reasons for the minority's refusal to the agreement signed by a required majority of the apartment owners in the condominium for the execution of a TAMA 38 project. Next, I will address the disputes that were established between the parties, both the defendants' claim of material harm to the equality of consideration due to the granting of excess considerations to Poliker and Sheinman in accordance with the agreement, and the claim of defendant 2 of the infringement of its proprietary rights due to the granting of an interest interest to apartment owners in a nearby condominium in a common underground parking lot.

The Normative Framework

The Reinforcement Law and TAMA 38

  1. The Reinforcement Law was enacted in 2008 as a complementary step to the implementation of TAMA 38, a national outline plan for strengthening existing buildings against earthquakes.
  2. TAMA 38 was approved in accordance with a government decision of March 27, 2005. Its purpose is to strengthen buildings, including condominiums in Israel, against earthquakes, while adapting them to the binding Israeli standard in this regard from January 1980, in order to ensure proper preparation for an earthquake scenario in Israel and to reduce the destructive consequences of a strong earthquake, to the extent that our region functions, which poses a real danger of loss of human life.  The approval of the plan was made against the backdrop of the difficult findings and conclusions of the State Comptroller's report, which dealt with earthquake preparedness in terms of the resilience of buildings and infrastructures in Israel, stating that preparedness for an earthquake in Israel "must be at the highest place on the national list of priorities.  If the State of Israel is wise to prepare properly, to strengthen buildings that do not meet the standard for earthquake-resistant construction, and to ensure that the standard is enforced, the chances are great that it will succeed in significantly reducing the expected damage from an earthquake of high intensity" (State Comptroller's Report, Earthquake Resilience of Buildings and Infrastructures - Status Report, March 2011).
  3. Accordingly, in order to encourage the strengthening of existing buildings and improve their resistance to earthquakes, TAMA 38 provides economic and planning incentives to owners of buildings and condominiums in Israel and to developers, which include, inter alia, increased building rights, exemptions and reliefs in taxes and levies, and a shortened procedure for granting a building permit. In the words of the Honorable Justice A.  Shoham, "TAMA 38 is a planning tool for adding housing units in city centers, where there are usually buildings that need to be strengthened.  For this reason, TAMA 38 is a central factor in urban renewal, and a possible solution to the existing shortage of residential apartments, without the need to invest resources from the public coffers" (Appeal Petition/Administrative Claim 7381/15   Dorfberger in the Tax Appeal v.  Oded, paragraph 23 of the judgment, published in Nevo (October 30, 2016) (hereinafter - the Dorfberger case); see also: Miscellaneous Appeal - Civil (Tel Aviv District) 69335-06-23 Nir v.  Naor, paragraphs 16-19 of the judgment, published in Nevo (January 24, 2024) (hereinafter - the Nir case)).
  4. The purpose of the Reinforcement Law, which was enacted as a supplementary measure necessary for the implementation of TAMA 38, is to lower the level of consent required by apartment owners in a condominium for the purpose of carrying out work on the common property that concerns the strengthening of the condominium against earthquakes, which overrides the provisions of the Land Law, 5729-1969 (see also: Government Bill 5767 No. 313, July 2, 2007, p. 702).  In the meantime, a different rate of consent threshold was set among apartment owners in a condominium, in accordance with the scope of the work that will be carried out as part of a project to strengthen the house against earthquakes: for the execution of reinforcement work that does not include the expansion of an apartment or the construction of a new apartment in the condominium, a consent threshold of 51% is required (section 3 of the Reinforcement Law); for reinforcement work that includes the expansion of an apartment, a consent threshold of 60% is required (section 4 of the Reinforcement Law); for reinforcement work that includes the construction of one or more new apartments, a 100% consent threshold is required, but the Supervisor of Land Registry may approve the execution of the works according to a claim by apartment owners who own 66% of the apartments in the condominium, "provided that he has given each apartment owner in the condominium an opportunity to argue his claims" (section 5 of the Reinforcement Law).
  5. Section 5A of the Reinforcement Law, which is relevant to the dispute that is the subject of the lawsuit, instructs us that the execution of works to strengthen a condominium against earthquakes, including the demolition of an existing building and its reconstruction, "requires a prior decision by all the apartment owners" (100%). The Supervisor of Land Registry is entitled to approve the execution of such works even if no decision has been made by all the apartment owners in the condominium, "according to a claim by the apartment owners who, at the time of filing the lawsuit, owned four-fifths of the apartments in the condominium and four-fifths of the common property were adjacent to their apartments, provided that he gave each apartment owner in the condominium an opportunity to argue his claims" (Section 5A of the Law applies to the lawsuit in its wording prior to Amendment No. 8, in light of the provisions of the Preliminary and Applicability Provisions (S.H.  5783 No. 3046 of June 6, 2023)).
  6. The arrangement in the Reinforcement Law, according to which the level of consent required by apartment owners for the purpose of executing a TAMA 38 project in a condominium was lowered, was determined in conjunction with other mechanisms whose purpose, as stated, is to facilitate the exploitation of building rights granted as an incentive to apartment owners to strengthen the condominium they own against earthquakes. This was done while creating a balance between the rights of apartment owners in the condominium and the status of the common property and the important public interest in strengthening condominiums to improve their resistance to earthquakes (see also: Miscellaneous Appeal - Civil (Tel Aviv District) 37143-09-25 Zelinger v.  Degani, paragraph 18 of the judgment, published in Nevo (February 22, 2026) (hereinafter - the Zelinger case; Nir,).
  7. In this context, the words of the Honorable Justice D. Barak Erez in the judgment in Civil Appeal Authority 1002/14 Shomroni v.  Kofman, paragraph 23 of the judgment, published in Nevo (July 9, 2014) (hereinafter - the Samaritani case), which did not come to fruition, to say: "The arrangement set out in the Reinforcement Law should also be interpreted in light of its contribution to the realization of TAMA 38, which grants apartment owners additional property rights, which would not have been granted to them at all without this plan.  In contrast to the other arrangements in the Real Estate Law, which allow for majority decision-making, in order to overcome problems of refusal in the management of the condominium, the Reinforcement Law is intended to enable tenants to realize new property rights that were granted to them only by virtue of TAMA 38.  Thus, the execution of a building reinforcement plan in accordance with TAMA 38 cannot be examined not only from the perspective of infringement of the property rights of apartment owners, but also from the perspective of empowering their property rights: they receive the allocation of valuable property property that was granted to them with an exemption from paying taxes and other mandatory payments" (see also: Civil Appeal 3700/15 Roth v.  Agnon, published in Nevo (June 27, 2016); Dorfberger,; Miscellaneous Appeal - Civil (Tel Aviv) 19339-01-23 Eisen v.  Tucker, paragraph 16 of the judgment, published in Nevo (May 15, 2023) (hereinafter - the Eisen District case)).

Apartment Owner's Objection to a TAMA 38 Project

  1. As stated, Section 5A of the Reinforcement Law gives the authority of the Supervisor of Land Registry to approve the execution of reinforcement works in accordance with TAMA 38, which includes the demolition of the condominium and its reconstruction, subject to the consent of a required majority of the apartment owners in the condominium, "provided that each apartment owner in the condominium has been given an opportunity to argue his claims".
  2. In the Shomroni case, the Honorable Justice D. Barak Erez further determined the considerations and criteria that the Supervisor of Land Registration must consider when required to file a lawsuit by apartment owners in a condominium to approve an agreement for the execution of a TAMA 38 project in the condominium, despite the objection of a minority of the apartment owners, as she put it: "Was the objection presented (or is the objection of a 'principled' nature without reasoning)? On the objective level, will the plan improve the situation of all the tenants in the building? Does the plan substantially infringe on the rights of the minority? Was it accepted in bad faith or out of a conflict of interest? Was a concrete alternative plan presented and does it have advantages that the agreement that was presented for approval? Was the equality between the tenants maintained? This is a non-exhaustive list of considerations, and of course the Supervisor must consider the plan that is submitted for his approval in accordance with the totality of the circumstances of the case" (ibid., paragraph 27 of the judgment).
  3. The burden of proof lies on the objector to prove the reasons for his objection and his reasonable refusal to carry out a TAMA 38 project in the condominium, due to which the Supervisor of Land Registry will not approve the execution of the project in accordance with the agreement signed by a required majority of the apartment owners. As further established in case law, in circumstances where the objector to the execution of a TAMA 38 project in the condominium is the only objector among all the apartment owners in the condominium, the burden on him to prove his reasons for his objection that the project will not be approved is heavier than usual (see also: Civil Appeal Authority 2331/24 Nir v.  Sasson, paragraph 6 of the judgment, published in Nevo (June 23, 2024); Miscellaneous Appeal - Civil (Tel Aviv) 50506-09-19 Yael v.  Baumleshspiner, published in Nevo (January 15, 2020); Miscellaneous Appeal - Civil (Tel Aviv) 37151-01-22 Audrey v.  Atar, published in Nevo (June 2, 2022); Nir, paragraph 19 of the judgment).
  4. As the Honorable Justice L. Bibi further clarified in the judgment in the Zelinger case, which was given recently, with reference to the burden on an apartment owner who opposes the implementation of a TAMA 38 project to prove the existence of a 'concrete alternative plan', that "the intention is that the tenant who refuses to present another possible alternative in any area and matter that is in dispute - that is, to support the existence of an alternative that is compatible with his approach and objection" (ibid., paragraph 22 of the judgment).
  5. As further established in case law, when the Supervisor of Land Registration is required to examine the reasons for the objection of the minority among the apartment owners in the condominium, he must take into account the fact that in the framework of the Reinforcement Law, the legislature sought to soften the 'property protection' available to apartment owners in a condominium and to give place to the 'liability defense' that denies the right of veto of the minority to the extent that it is likely to prevent the benefit of all apartment owners in the condominium.
  6. This was discussed by the Honorable Justice Y. Cohen in the judgment Other Municipal Applications (Haifa District) 899-03-09 Kalchuk v.  Oron, paragraph 18 of the judgment, published in Nevo (April 29, 2010) (hereinafter - the Kalchuk case), in which he stated: "When we come to implement the 'Reinforcement Law', we must change from the usual approach that guides us in protecting the property rights of apartment owners in common property, and instead of acting according to the general protection concept in real estate law, we must adopt the concept that was the basis of the Zodler judgment.  ...  When the building permit is granted, and the minority still insists on its refusal to give its consent, the majority will appear before the Supervisor of Land Registry, and the Supervisor will examine whether equality has been violated, and whether the majority is acting in good faith, and whether the 'depreciation' of the property rights of the minority is null and void in comparison to the enjoyment that accrues to it from the reinforcement work carried out in the house.  Above all, if the Supervisor finds room for this, he will certainly be authorized to condition the execution of the works on monetary compensation.  The Supervisor of the Land Registry will not be permitted to prevent the execution of the works solely [on the basis of] the minority's claims regarding the infringement of its property rights.  These rights will be diluted and will cause them to be 'depreciated,' but these violations will not have the power to prevent the reinforcement work.  The supervisor's authority to intervene to accept the minority claims and not to approve the execution of the reinforcement work will therefore be very limited" (see also: the Zelinger case, paragraph 23 of the judgment; the Eisen District case, paragraph 23 of the judgment; Miscellaneous Appeal - Civil (Tel Aviv District) 32926-01-22 Israel v.  Yahav, paragraph 17 of the judgment, published in Nevo (June 15, 2022); Miscellaneous Appeal - Civil (Tel Aviv District) 13039-12-20 Nissani v.  Habib, published in Nevo (April 26, 2021) (hereinafter - the Nissani case)).

From the general to the individual

  1. First, I reject the claim of defendant 2 in its summary of a violation of due process since it was not possible, as alleged, to add evidence and to cross-examine the plaintiffs to prove its claims regarding a discriminatory agreement that grants Poliker excess and extreme considerations, the result of bad faith conduct by the entrepreneurial company and while concealing documents.
  2. This is because a procedural agreement was reached between the parties, according to which an expert real estate appraiser will be appointed by the Supervisor of Land Registration (the expert) to clarify the disputes that are the subject of the lawsuit, by way of providing an opinion on the question of whether the principle of equality of consideration in relation to the defendants' consideration apartments has been violated in comparison to all the considerations given to the other apartment owners in the condominium under the agreement, including the agreement signed with Poliker, as detailed in the decision of March 19, 2023, which was given at the time of the hearing. Since the parties were unable to agree on the identity of the expert, I instructed at their request in a decision of April 2, 2023, the appointment of the expert, the real estate appraiser, the economist and the attorney Shlomi Maaravi, to give an opinion on the question of whether, in accordance with the agreement, which includes, as aforesaid, the additions to it, including the addition signed with Poliker, the equality of consideration was violated.  This was done by comparing the consideration given to each of the defendants' apartments with the considerations given to the owners of the other apartments in the condominium, as detailed in detail in the decision, while clarifying that the examination of the violation of the consideration would be in relation to all the components of the consideration given to the apartment owners in accordance with the agreement.  In accordance with the agreed decision regarding the appointment of the expert, the parties may refer clarification questions to the expert and question him about the opinion, as they did in the framework of the investigation of the claim in this case.
  3. Without derogating from the aforesaid, I will clarify that defendant No. 2's claim regarding the lack of good faith of the entrepreneurial company relates to the concealment of the agreement signed with Poliker, which, as claimed, constitutes a discriminatory agreement that grants it excess and exceptional considerations in a manner that violates the equality of consideration. However, there is no dispute that this agreement was brought to the attention of the defendant, at the latest, on the date of filing the claim in question (an appendix to the statement of claim).  There is also no dispute that the defendant did not sign the agreement for the execution of a TAMA 38 project in the condominium.  In these circumstances, the claim of concealing the agreement signed with Poliker prior to the filing of the lawsuit, in and of itself, does not infringe the defendant's rights while this agreement is at the core of the investigation of the claim at hand.  This is in contrast to circumstances in which an apartment owner in a condominium enters into an agreement for the execution of a TAMA 38 project, while concealing from him a specific agreement signed between an entrepreneurial company and another apartment owner in the condominium.  In the examination of material information whose failure to disclose may amount to a material violation of the rights of the apartment owner.

Harm to the equality of consideration

  1. A dispute arose between the parties as to whether the agreement, which includes an addendum signed between Poliker and the developer company (hereinafter - the "Poliker Agreement"), amounts to a material violation of the equality of consideration between the apartment owners in the condominium. In the meantime, the parties disagreed on the following sub-questions: what is the determining test for examining the violation of equality of consideration; whether the equality of consideration was impaired due to the granting of excess considerations to Poliker and Sheinman, including the components of the considerations that should be considered excess consideration; What is the remedy for a violation of equality of consideration - is the rejection of the claim for approval of the execution of the project in accordance with the agreement or whether it is a monetary compensation award or compensation in kind (between the plaintiffs and defendant 1 an agreement in this regard, the subject of the partial judgment, according to which the repair of the damage will be by way of monetary compensation); What is the amount of compensation, including the determining date for assessing the value of the damage?

I will address these disputes in order.

  1. Criteria for Examining the Violation of Equality of Consideration
  2. A material violation of the equality of the considerations given to apartment owners in a condominium in the framework of the execution of a TAMA 38 project amounts to a reasonable reason for opposition to the execution of the project. A guiding principle for examining a violation of equality of consideration is that the comparison will be made between equals and not between those who have a material difference between them (Civil Appeals Authority 5108/23 Eisen v.  Bernard, published in Nevo (November 16, 2023) (hereinafter - the Supreme Eisen case).
  3. In doing so, the court will take into account the unique characteristics of a transaction for the execution of a TAMA 38 project in the condominium, which in essence is a combination transaction between the owners of apartments in a condominium and an entrepreneurial company. This transaction embodies a set of balances between the various requirements of the parties, including due to economic constraints and planning constraints for the execution of the project in the condominium, given various variables that include, inter alia, the scope of the building rights and the manner of their exploitation in accordance with valid plans under the Planning and Building Law that apply to the condominium, the location of the property, the costs of executing the works, levies, financing expenses and guarantees.
  4. The test that was adopted in case law to examine the objection of an apartment owner to the execution of a TAMA 38 project in a condominium due to an agreement signed with the majority of the apartment owners that discriminates against him in the absence of equality of consideration, is the 'quantitative-substantial' test. In accordance with this test, it is necessary to examine whether each apartment in the condominium receives an addition of substantially similar area.  This is while clarifying that the preference for this test over the 'economic' test, according to which it is necessary to examine whether each apartment is expected to receive identical consideration in terms of economic value, is "not free of difficulties" and deserves to be examined by the Supreme Court when the appropriate case is presented to it (Eisen Supreme Court, ; Civil Appeal Authority 4443/22 Peretz v.  Shohat, published in Nevo (August 7, 2022)).
  5. Moreover, as was argued in the case law, the determination that the consideration will be equal does not mean that all apartment owners will receive the same quantitative consideration (additional area). In the words of the Honorable Justice L.  Bibi, "The addition must be equal, i.e., that the equals have been amended with an identical addition.  My determination that the relevant equality is quantitative equality does not negate the rule as established from time immemorial and in accordance with it, equality must be applied between equals, and that there is no discrimination except where different treatment is taken to equals.  In order for a claim of discrimination to be accepted, the person claiming discrimination must show that he is equal to the comparison group, and despite this, he was treated differently" (Eisen District Court, paragraph 25 of the judgment; Miscellaneous Appeal - Civil (Tel Aviv District) 14413-02-22 Shochat v.  Peretz, paragraph 34 of the judgment, published in Nevo (April 26, 2022); Nisani case, paragraph 60 of the judgment).  In the words of the Honorable Justice Y.  Kasher, "the fact that owners of different apartments of origin are given compensation apartments with a different addition of square footage does not establish a claim of discrimination according to any of the aforementioned tests" (Eisen Supreme Court, paragraph 13 of the decision; High Court of Justice 8904/23 Eisen v.  Supreme Court sitting as the Court of Civil Appeals, published in Nevo (December 19, 2023)).
  6. In the framework of examining the claim of infringement of consideration equality, it is also necessary to examine the relativity of considerations between the different groups. In other words, alongside the claim of an apartment owner in a condominium that he is equal to the comparison group and despite this a different attitude was taken towards him, his argument that the consideration ratio between the different groups was not maintained will also be accepted.  This is in order to ensure that relative equality is maintained between the considerations of the equal groups, taking into account their relative share in the common property and building rights in the condominium of the apartment owners who belong to each equal group (Supervisor of Land Registration (Tel Aviv) 5/482/2022 Gan Nordau in Tax Appeal v.  Bar Kama, published in Nevo (June 6, 2025); Land Registry Supervisor Case (Tel Aviv) 5/1507/2021 Ezra v.  Stein, published in Nevo (August 25, 2025) (hereinafter - the Stein case)).
  7. I will add this as well. With regard to the considerations that are the addition of space to an existing apartment (main area, safe room, balcony, yard, warehouse and parking), I am of the opinion that the quantitative-material test is the correct test, for the reasons as stated in the case law, and as it is an applicable test that enables the execution of a TAMA 38 project in a condominium.  In my opinion, the application of an economic test, according to which the relative value of the apartments in the condominium in the existing situation should be preserved in comparison to the value of the consideration apartments, is not feasible, given the planning limitations in the construction of the new condominium.  Avar: In accordance with accepted appraisal rules, the value of apartments in a certain condominium will be determined by taking into account variables that are mainly the area of the apartment, floor, air directions, view, elevator, maintenance condition and renovation of the apartment.  In accordance with the economic test, the value of all the existing apartments in the condominium must be assessed and it must be ensured that the value ratios between the consideration apartments will be maintained.  In addition to the many disputes that will arise between the apartment owners on the question of assessing the value of their apartments (the starting apartments and the consideration apartments), it is also not possible from a planning perspective to build the new house in a way that will include apartments that reflect the relative equality required by the economic test, in the sense of 'personalized' apartments.
  8. This is all the more true in view of the purpose underlying TAMA 38, to ensure the resilience of buildings and condominiums against earthquakes. By virtue of it, apartment owners in a condominium and the developer are provided with economic incentives, the main of which are in relation to the apartment owners, future property rights (considerations), which are at the core of the reasons for the minority refusal to carry out a TAMA 38 project in the condominium, taking into account that the apartment owners are not required to bear any payment in the framework of the execution of the project, as in our case (clause 5.11 of the agreement).  This is distinct from the judgment given in the case of 'Ofer Tenders', to which defendant 1 referred in its summaries.  Within its framework, the 'value index' was determined with respect to the distribution of the consideration between the owners of apartments in a condominium that was burned down and completely destroyed, as part of the process of dissolving the partnership by way of sale.  It was determined that the distribution of the proceeds between the apartment owners from the sale of the plot on which the demolished condominium was built would be made in view of the various characteristics of the apartments in the condition that preceded the demolition of the condominium, i.e., given the existing property rights of the apartment owners in the condominium prior to its demolition (Civil Appeal Authority 6898/16 Estate of the late Shlomo Aharoni v.  Ofer Tenders Ltd., published in Nevo (December 28, 2017)).
  9. With regard to the alternative of providing a consideration apartment of approximate relative value while making balance payments between the apartment owners, I am of the opinion that this will be sufficient to thwart the execution of projects by virtue of TAMA 38 in condominiums, since such a mechanism may add to and multiply disputes on the question of who will be entitled to receive a consideration apartment that reflects full relative value and who but a consideration apartment that reflects approximate relative value plus balance payments. This, with due caution, since I have seen in the many cases that arise before me in disputes under the Reinforcement Law, the refusal of apartment owners to receive consideration except in kind (additional area and not monetary compensation).
  10. Considerations that are another addition, which is not an addition to the existing apartment, relate to the economic benefits provided to apartment owners in a condominium as part of an agreement for the execution of a TAMA 38 project in the condominium, which accompany and derive from the execution of construction work in the condominium. These include, inter alia, financing rent for alternative housing during the construction period, financing transportation services for the contents of the apartment to and from the alternative housing back to the apartment, the scope of the technical specifications for the apartment and the level of finish and quality, financing of architectural services, and financing of engineering, appraisal and legal advice, to the extent that they are provided in accordance with the agreement.  Even with regard to these considerations , the principle of equality of consideration, as stated above, must be upheld, and identical considerations must be ensured for the equal groups while maintaining the proportionality of the value of the considerations between the different groups.  In the meantime, to the extent that a condominium includes different groups of apartments - residential apartments, offices, shops (commerce), and warehouses - an apartment owner in each group of apartments is entitled to receive these economic benefits equally (in his group), which correspond to the different and unique characteristics of the apartments in each group, and in accordance with the size of the apartment.  For example, to the extent that the agreement establishes an economic benefit that concerns the financing of rent for alternative housing during the construction period, the owners of all the apartments in the condominium are entitled to this benefit, while the amount of rent will be in accordance with the size of the apartment.  Another economic benefit in the agreement that deals with the provision of various technical specifications for apartments in accordance with their designation (residential, offices, commerce, storage) is not, in itself, a violation of equality of consideration.  This is insofar as the distinction derives substantively from the inherent variation between the designations, and reflects the functional adaptation of the technical specifications to the needs of the apartments in each group.
  11. In accordance with these criteria and guiding principles, I will turn to examine the alleged infringement of the equality of consideration that is the subject of the agreement, including the Poliker Agreement.
  12. Has the equality of consideration in accordance with the agreement been violated?
  13. In accordance with the decision of April 2, 2023, as stated, the expert was appointed "to give an opinion on the question of whether, in accordance with the agreement [defined the agreement and its additions, including the Poliker Agreement], the principle of equality of consideration was violated by comparing the consideration given to each of the defendants with the consideration 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 apartments in building rights in the condominium in accordance with the condominium registration order, which is their relative share of the common property in the absence of an agreed bylaws and other provision that applies to the parties in this matter.  To the extent that any of the parties took advantage of 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 plaintiff 4 [Poliker], these building rights will be taken into account in the calculation of his relative share of the building rights for the execution of a TAMA 38 project in the condominium.  For the avoidance of doubt, the examination of the violation of the principle 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."
  14. On March 24, 2024, the expert opinion was submitted to the file (hereinafter - the "expert opinion"). On May 30, 2024, the expert responded to clarification questions on behalf of defendant 1 and defendant 2, and on July 25, 2024 and September 18, 2024, meetings were held to question the expert on the opinion.
  15. In the framework of the discussion on the question of whether the equality of consideration has been violated, I will distinguish between considerations that are related to 'additional area' and considerations that are related to 'other addition'.

Area Addition Considerations

  1. In accordance with the letter of appointment of the expert, the violation of equality of consideration will be examined given the relative share of the apartments in the building rights in the condominium in accordance with the condominium registration order, which is their relative share of the common property. In accordance with the letter of appointment, if any of the parties took advantage of 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, these building rights will be taken into account in the calculation of his relative share of the building rights for the execution of a TAMA 38 project in the condominium.  This, inter alia, is in the absence of a dispute between the parties in their pleadings regarding Poliker's rights in addition to the construction for his apartment (room and balcony) that is in accordance with the lawful building permit.
  2. Accordingly, for the purpose of examining the question of the infringement of equality of consideration with respect to 'additional space', in accordance with the quantitative-material test, the following must be determined: what is the area of the apartments in their current state (origin apartments); what is the relative share of each apartment in the building rights; what are the considerations for 'additional space' that each apartment owner receives in accordance with the agreement; whether the consideration apartments of Poliker and Scheinman exceed their relative share of the building rights and whether the defendants' consideration apartments retain their relative share of these rights; The scope of the infringement. The considerations for 'additional space' relating to parking and storage will be discussed separately below.
  3. The area of the apartments in their current condition - the area of the apartments in their current condition (the origin apartments) will be determined in accordance with the building permits issued by law for construction in the condominium, in accordance with the letter of appointment of the expert.
  4. In accordance with the expert's opinion, there is no dispute that in 1961 a building permit was granted for the construction of the condominium, which includes 12 residential apartments and a heating room in the basement. In accordance with the expert's opinion, the building area in the 1961 building permit includes the addition of building rights to balconies, which were granted in the past as a practice in addition to the building rights (the main building area).  In the words of the expert, "the balconies that were added in the condominium in question, beyond the building rights, were granted in accordance with the practice and exist in all the subplots.  The instructions of the legal advisor of the Tel Aviv Municipality from 1989 regarding the balconies are that they should be regarded as if they were given according to an approved plan" (paragraph 12.2 on pages 117-118 of the expert opinion).  For this reason, the gap between the areas of the apartments in the building permit (licensing) is also explained, which is usually larger than their area in the condominium registration order issued later in 1963 (see also: expert testimony, minutes of the hearing of July 25, 2024, page 3, lines 1-2).
  5. There is also no dispute that in 2001 a building permit was lawfully granted for the expansion of a Poliker apartment located on the third floor of the condominium (subplot 13), which includes the addition of an exit room to the roof of an area of 22.8 square meters and a sun terrace of 38.7 square meters. The application for a building permit was submitted with the consent of the apartment owners in the condominium, which is not in dispute (section 2.7.2 on page 4 of the expert opinion; expert testimony, minutes of the hearing dated July 25, 2024, page 7, lines 15-17, 31-34 and page 8, lines 6-19).  The condominium registration order was not amended in accordance with the expansion of the apartment.  However, it was agreed in the letter of appointment of the expert that any construction in accordance with the lawful building permit in the condominium will be taken into account for the purpose of calculating the relative share of the apartment owners in the condominium in the building rights.
  6. The following is a table that summarizes the areas of the apartments in the condominium in accordance with the condominium registration order, and the areas of the apartments in accordance with the building permits in accordance with the law:
  7. In view of the aforesaid, I am not required to address the claims of defendant 2 regarding the erroneous measurement of the Poliker apartments as carried out by the developer, since such a measurement is not relevant to the examination of the violation of equality of consideration in accordance with the letter of appointment of the expert. Needless to say, in this context, in accordance with the measurement of the entrepreneurial company, the areas of the apartments overlap with their areas in accordance with the building permits, with the exception of 3 Poliker apartments in the basement and on the ground floor, whose area according to the measurement has increased (paragraph 2.8 of the expert's opinion).
  8. The relative share of each apartment in the building rights - in accordance with the agreement of the subject of the expert's letter of appointment, the relative share of each apartment in the building rights is in accordance with the registration of the 'share of the common property' in the condominium registration order. To the extent that after the construction of the condominium, an apartment owner exploited building rights for the purpose of expanding his apartment and attaching parts of the common property to the apartment, these building rights will be taken into account in the calculation of his relative share in the building rights.

There is no dispute regarding the relative share of the apartments in the building rights in accordance with the condominium registration order.  There is also no dispute that after the construction of the condominium, Poliker took advantage of the building rights for the purpose of expanding his apartment on the top floor of the condominium, which includes the addition of a room on the roof floor with an area of 22.8 square meters and a sun terrace of 38.7 square meters, in accordance with the lawful building permit.

  1. As part of the opinion, the expert made a calculation regarding the relative share of the apartment owners in the building rights given the expansion of the Poliker apartment. In accordance with the calculation, the area of the expansion and the area of the sun terrace were calculated, for the purpose of adjusting to the areas of the apartments in the registration, at a reduction of 10% compared to the area in the permit.  In addition, the area of the sun terrace was calculated according to an equivalent reduction factor for a built-up area of 0.3.  Accordingly, and in this regard, the area of the expanded Poliker apartment is 61 square meters (61.64 square meters + (22.8 square meters + 38.7 x 0.3) x 0.9) (section 2.9.4 on page 6 of the expert opinion).  The parties did not dispute the expert's calculation, which I found to be within the range of equivalent reduction coefficients according to accepted appraisal rules.
  2. The following is a table that summarizes the relative share of the apartment owners in the building rights in accordance with the condominium registration order, and their relative share in the building rights in accordance with the amendment after the expansion of the Poliker apartment as required by the expert's letter of appointment:
  3. Considerations for 'additional space' of the owners in accordance with the agreement - With regard to considerations relating to 'additional space', the agreement stipulates that the owners will have 12 apartments in consideration. Each consideration apartment will have an additional main area of 20 square meters (a deviation of 3% of the apartment's area is permitted if it is actually approved in the building permit), including an apartment protected space (Mamad), as well as a sun terrace with an area of no less than 12 square meters, regular underground parking, and a storage room, if there are warehouses (clauses 2, 5 and 7.10 of the agreement).  In accordance with the addendum to the agreement (no date), a uniform reduction of 2 square meters of all the apartments in the new house to be built (owner's apartments and developer's apartments) was carried out in favor of the installation of a second elevator that would include a Shabbat control mechanism, so that each owner's apartment has a uniform main area addition of 18 square meters (clause 10 of the addendum to the agreement, clause 2.12.1 on page 10 of the expert opinion).
  4. In accordance with the agreement, Poliker has 3 apartments in consideration (in addition to the 5 apartments it currently owns), as follows: an apartment on the first floor with a main area of 45 square meters, with a sun terrace of 12 square meters; an apartment on the second floor with a main area of 45 square meters, with a sun terrace of 12 square meters; a penthouse apartment with a main area of 257.5 square meters, with a sun terrace of 34 square meters. Three parking spaces will be attached to Poliker's consideration apartments.  In accordance with the Poliker Agreement, the penthouse apartment "will be kosher and attached to the highest roof, above the aforementioned apartment, a balcony of 40 square meters, with access to the aforementioned balcony from the apartment itself.  If, for any reason, the Local Planning and Building Committee refuses to approve the construction of the balcony as aforesaid, this will not constitute a breach of the agreement on the part of the developer, but in such a case, the developer will compensate the owner in the sum of ILS 1 (one) million gross, and apart from this amount, the developer will not bear any other payment in connection with the aforesaid." In this regard, the expert clarified in his opinion and in response to clarification questions that "this component of attaching the upper roof is acceptable in Plan 3729A, which applies to the property and in the vicinity of the property" (section 5 on page 4 and section 5.4 on page 8 for the expert's response to clarification questions), by virtue of which the building permit was granted.
  5. 00As part of the opinion, the expert calculated all the areas of the consideration apartments in accordance with the agreement, while the areas of the balconies were calculated according to the equivalent reduction coefficients for the built-up area, as follows: a sun terrace on a regular floor - 0.4, a roof sun terrace - 0.3 (in accordance with the equivalent reduction factor of the sun terrace in a Poliker apartment in an existing condition, as stated above), an upper roof sun terrace - 0.15. According to this calculation, the area of Poliker's penthouse apartment is 7 square meters (257.5 square meters + (34 square meters x 0.3) + (40 square meters x 0.15) (section 2.14.2 on page 15 of the expert opinion).  I hereby adopt the expert's calculation, which was also made within the range of equivalent reduction factors according to accepted appraisal rules (see also: the expert's reliable and professional testimony in this matter, minutes of the hearing of September 18, 2024, page 16, lines 13-27).
  6. The following is a table that summarizes the relative share of the apartment owners in the building rights in the starting apartments (existing situation), and their relative share of the building rights according to the consideration apartments 'additional area' in accordance with the agreement (exit status):
  7. It follows from the aforesaid that Poliker's cumulative relative share of the 'additional area' considerations in accordance with the agreement - 30.16%, and Scheinman's cumulative relative share in these considerations - 15.12%, exceeds its relative share in the building rights in the current situation, 30.07% and 13.90%, respectively. In addition, the relative share of each of the defendants in the considerations for 'additional area' in the outgoing situation in accordance with the agreement (9.12%) is lower than their relative share in the building rights in the current situation, 9.34%.
  8. The scope of the infringement - the total consideration for the 'additional area' of the owners in accordance with the agreement is 350.71 square meters (1,237.9 square meters (the total area of the apartments is equivalent in the outgoing state) minus 887.19 square meters (the total area of the apartments in the existing state)).
  9. With respect to the Poliker apartments, the total area of the equivalent consideration apartments is 3 square meters (49.8 + 49.8 + 273.7 square meters). In accordance with the cumulative relative share of the building rights in the current situation (30.07%), Poliker is entitled to consideration apartments with a total area of 372.21 square meters (350.71 square meters x 30.07% = 105.46 square meters + 266.75 square meters (the total area of its apartments in its current condition: 15.64 + 48.43 + 48.43 + 61.64 + 92.61 square meters).  Therefore, Poliker's excess consideration with respect to the 'additional area' consideration in accordance with the agreement is 1.09 square meters.
  10. With respect to the Sheinman apartments, the total area of the equivalent consideration apartments is 2 square meters (93.6 + 93.6 square meters). In accordance with its cumulative relative share of the building rights in the current situation (13.90%), Sheinman is entitled to consideration apartments with a total area of 172.03 square meters (350.71 square meters x 13.90% = 48.75 square meters + 123.28 square meters (the total area of its apartments in its current condition: 61.64 + 61.64 square meters).  Therefore, Sheinman's excess consideration with respect to the 'additional area' consideration in accordance with the agreement is 15.17 square meters.
  11. With respect to the defendants' apartments, the area of each equivalent consideration apartment is 9 square meters. In accordance with the relative share of each of the defendants in the building rights in the current situation (9.34%), each of them is entitled to a consideration apartment with an equivalent area of 115.62 square meters (350.71 square meters x 9.34% = 32.76 square meters + 82.86 square meters (the area of each apartment in its current state).  Therefore, each defendant was deducted from each defendant's share of the 'additional area' consideration, which stands at 2.72 square meters.
  12. Interim Summary: With regard to the 'addition of space' of the consideration apartments in the new condominium that will be built, the equality of the consideration was violated, both in relation to the excess considerations given to Sheinman and Poliker, and in relation to the considerations to which the defendants are entitled, given their proportional share of the building rights. The value of the damage will be discussed below in the chapter 'The Amount of Financial Compensation'.

Parking and storage room 'extra space' considerations

  1. According to the agreement, the owners will have 12 residential apartments.
  2. In the meantime, in accordance with the addendum to the agreement, instead of the 5 apartments currently owned by Poliker (the current situation), Poliker will receive 3 apartments in consideration for the new house that will be built: a roof apartment (penthouse), which includes the consolidation of the apartment area on the basement floor, the area of the apartment on the second floor and the area of the apartment on the third floor (today), an apartment on the first floor, and an apartment on the second floor. Accordingly, the number of apartments owned by the owner in the new home will be 11 residential apartments.
  3. With regard to parking, the agreement stipulates that "each of the owners' apartments will be attached to one independent conventional parking (not part of sequential parking), covered, underground, without the use of an automatic device and/or a mechanical device (multiplier, etc.) or another parking facility" (clause 7.7 of the agreement).
  4. As for the warehouse, the agreement stipulates that "to the extent that it is feasible from a planning point of view to build warehouses on the basement floors of the building, the developer will build warehouses and after allocating two warehouses to the developer's apartments, he will allocate them to the owners of each of the owners' apartments, until one warehouse is attached to each of the new owners' apartments. All the other warehouses that will be built will belong to the developer.  It is clarified that if warehouses are built, they will be as equal as possible in their area (in any case, the owners' warehouses will not be smaller than the developer's warehouses) and not less than 4 square meters for each warehouse area that will be attached to the new owners' apartments" (clause 5.9 of the agreement).
  5. In accordance with the condominium registration order, the house is 5 floors long and includes "13 apartments".
  6. In accordance with the agreement, the apartment owned by Poliker on the basement floor, which is a 'room' with a floor area of 15.64 square meters according to the registration order (18 square meters in accordance with the building permit), does not entitle it to parking and storage (without detracting from its relative share in the building rights in the condominium). This, given its different characteristics compared to the residential apartments in the condominium, since in accordance with the agreement its designation is to serve as a heating room on the basement floor and in view of its size.  As the expert noted in his opinion, "The basement plans that apply to the property as well as Plan 3729A for Quarter 4 do not permit the use for the main purpose of a separate unit on the basement level, unless such a unit already exists in a building permit that was duly granted." In the circumstances at hand, there is no dispute that "the property is actually used as a salt room and is not used for residence" (paragraphs 2.11.5
    and 2.11.7 of the opinion).
  7. Poliker has 4 residential apartments in the condominium and is therefore entitled to 4 parking spaces and 4 warehouses that will be attached to the consideration apartments in the new building that will be built. However, there is no dispute that in accordance with the additions to the agreement, Poliker's consideration apartments include the attachment of 3 parking spaces and only one storage room, while Poliker will be allowed to choose the warehouse first (see also, clause 5 of the addendum to the agreement of August 8, 2021).  As the expert clarified in response to clarification questions, Poliker's waiver of 3 warehouses to which it is entitled in accordance with the consideration mechanism under the agreement was made in order to enable all the other apartment owners in the condominium to receive a storage room.  In the words of the expert, "an examination of the application for a permit shows that with regard to the warehouses in the basement, there is no material economic advantage in the first choice of the warehouse, when [Poliker] waiving the warehouses that each existing apartment receives, in relation to three existing apartments, allows the rest of the existing apartments in the condominium to receive a storage room each" (paragraph 5.7 on page 9 of the expert's response to clarification questions).  According to the statement of the representative of the entrepreneurial company at the time of the hearing, in practice "there is a warehouse for each apartment" (minutes of the hearing of September 18, 2024, page 20, line 14).
  8. Interim Summary: With regard to the considerations for the 'additional space' of the type of parking and storage that will be attached to the owner's consideration apartments in the new condominium that will be built, Poliker has a lesser consideration of 1 parking space and 3 warehouses. I am aware that Poliker waives these considerations in accordance with the agreement.  However, in the framework of examining the defendants' claim that the equality of the consideration due to excess consideration to Poliker is violated, it is clear that the entirety of the considerations to which he is entitled in accordance with the agreement must be examined according to the criteria that apply to all apartment owners in the condominium.  The value of the damage will be discussed below in the chapter 'The Amount of Monetary Compensation'.

'Other Add-on' Considerations

  1. In accordance with the agreed upon letter of appointment of the expert, the examination of the harm to the equality of the consideration will be in relation to all the components of the consideration given to the apartment owners in accordance with the agreement. Alongside the considerations for the 'additional area' for the owners, the agreement stipulates considerations that are 'other additions'.  According to the defendants, Poliker and Scheinman benefit from 'other additional' considerations (the entrepreneurial company bears their ownership) in the following matters, which amount to a violation of equality of consideration: an increase in floors beyond the location of their current apartments, financing upgraded technical specifications in the penthouse apartment (Poliker), financing architectural consulting and legal consulting services (Poliker), financing packing and transportation services (Poliker), financing rent during the construction period for the one-room apartment on the basement floor (Poliker), and bearing tax payments that apply to Sheinman and Poliker due to the fact that they own more than one apartment in the condominium.

I will relate to the disputes in these matters, in their order.

Previous part123
45Next part

Related articles

May 28, 2026
Purchasing Real Estate Abroad: A Good Investment or a Trap?
Real estate in Israel and around the world
An article regarding the purchase of real estate abroad, what to watch out for, and tax issues related to the topic. The article was written by Adv. Ronit Amir-Yaniv of Afik & Co. and CPA Eran Buchris.
March 28, 2026
Did You Sign? Did You Understand? On the Duty of Disclosure in Loans and Mortgages
Real estate in Israel and around the world
Commercial, Banking and Financial
Imagine the following situation: your spouse’s business needs a financial boost, and they ask you to join as a borrower or guarantor for a non-bank loan.  While they promise that everything is under control – leading you to arrive at a lawyer’s office, sign a stack of documents within minutes, and go on your way […]
December 22, 2025
Eviction of a licensee: Can the license become irrevocable?
Real estate in Israel and around the world
Dispute Resolution
An article discussing the ability of landowners to evict a licensee, even after decades, whether regarding private land or state land. The article was written by Adv. Yair Aloni of Afik & Co
July 16, 2025
The Options Following the Last Option – On Divorce and Options
High-Tech and Technology
Business, Corporate and Joint Ventures
Dispute Resolution
An article on the question of whether employee stock options granted to a married employee, or one who married before they were mature, are considered joint property of the employee and his or her spouse. The article was written by Attorney Gilad Bar-Ami of Afik & Co.

How can we help you?

We will be happy to assist over the phone or set a meeting. You can fill in details by clicking on "Get in touch" on the right and we will be happy to get back to you.

Get in touch