(Tel Aviv) 1728/22 Sheinman Nava v. Agmon Israela - part 4

Climbing on uneven floors

100. In accordance with the agreement, the owner's consideration apartments will be located two floors above their current location. In accordance with the consideration schedule, the consideration apartments of Poliker and Sheinman do not maintain the mechanism of increasing the floors as determined in the agreement, as detailed in the table below:
101. As indicated by the data in the table, one of the 2 apartments owned by Sheinman enjoys an increase of 3 floors (an increase of 5 floors instead of 2 floors). As for Poliker, one of the 5 apartments he owns is affected by an increase of less than one floor (instead of 2 floors),
     and 3 other apartments that are consolidated into one apartment (the roof apartment) benefit from the surplus as follows: 6 floors in relation to the basement apartment (an increase of 8 floors instead of 2 floors), 3 floors in relation to an apartment on the second floor (an increase of 5 floors instead of 2 floors), and 2 floors in relation to an apartment on the third floor (an increase of 4 floors instead of 2 floors).
102. With regard to the Poliker apartment on the basement floor (a 'heating room' according to the building permit that is actually used as a 'salt room'), I am of the opinion that there is no increase in the floors due to the displacement of this area (18 square meters) from the basement floor in favor of the total area of a residential apartment that constitutes a Poliker consideration apartment, because of the excess consideration.

I will explain this conclusion:

103. There is no dispute that the one-room apartment in the basement owned by Poliker differs in its characteristics from the residential apartments in the condominium, as stated above. For this reason, and in accordance with the agreement, Poliker is not entitled to the parking and storage considerations to which the owners are entitled in relation to each of the residential apartments in the condominium.
104. Moreover, Poliker cannot benefit from a relative increase in the area of the one-room apartment in the basement as an independent and separate unit in accordance with the increase in the area of the residential apartments (the consideration apartments), even though all the apartments in the condominium have a relative (different) share in the building rights and in accordance with the plans that apply to the condominium. This is due to a limitation in the plan that applies to the condominium.  As the expert put it in the opinion, "In the A/1 plan for the basements, there is a limit of 12 square meters per storage room, adjacent to the apartment, without the possibility of an independent warehouse as a separate unit that can be registered as a sub-plot in the future" (paragraph 2.11.12 on pages 9-10 of the expert opinion; see also: expert testimony, minutes of the hearing of September 18, 2024, page 3, lines 21-25).
105. In view of such planning limitations with regard to the addition of space for a one-room apartment on the basement floor, which were not contradicted by the defendants, the customary considerations for a one-room apartment on the basement floor that is not a residential apartment, as part of the implementation of a TAMA 38 project, are financial compensation that reflects the potential for an increase in accordance with the relative share of the building rights or an upgrade of the owner's rights to a residential apartment above the ground that calculates the value of the apartment on the basement floor as a financial credit with respect to the value of the residential apartment (expert opinion, ibid.; paragraph 4.1 on page 7 of the expert's response to clarification questions; expert testimony, minutes of the hearing dated July 25, 2024, page 5, lines 38-41; minutes of the hearing of September 18, 2024, page 8, lines 31-39). See also: Miscellaneous Appeal - Civil (Tel Aviv District) 5233-11-22 Dermer v.  Bronfman, paragraph 27 of the judgment, published in Nevo (3.  2023) (hereinafter - the Bronfman case); Land Registry Supervisor Case (Tel Aviv) 5/645/2022 Bar Israel v.  Estate of the late Terem Michael, published in "Nevo" (September 24, 2024) (hereinafter - the Bar Israel case); regarding the difference between the consideration to which the owner of a storage unit on the basement floor of a condominium is entitled and the consideration to which the owners of residential apartments in the condominium are entitled - Miscellaneous Appeal - Civil (Tel Aviv District) 48996-10-18 Kaleb v.  Ben Uri (1973) Public Works and Building Company Ltd., paragraph 19 of the judgment, published in Nevo (December 9, 2018).
106. Therefore, in the absence of planning feasibility for the allocation of an independent and separate unit in respect of a one-room apartment in the basement owned by Poliker (which includes an addition of an area that reflects the apartment's relative share of the building rights in accordance with the plans that apply to the condominium), in addition to the lack of entitlement to 'additional space' consideration for parking and storage in respect of this apartment, I am of the opinion that the transfer of the rights of the basement apartment owned by Poliker in favor of a residential consideration apartment in respect of another apartment he owns in the condominium - in accordance with the accepted alternatives established in case law regarding the rights of the owner of a warehouse unit on the basement floor of a condominium in the framework of the execution of a TAMA 38 project - constitutes an excess consideration for the purpose of raising the floors (see also: the expert's testimony, minutes of the hearing of September 18, 2024, page 10, lines 37-41 and page 11, lines 1-3).
107. Interim Summary: With respect to the considerations for 'other additions' of the type of increase in floors, Scheinman has excess consideration due to an increase of 3 floors in relation to one of the two apartments it owns in the condominium. Poliker has less consideration for a decrease in one floor, as well as an excess consideration due to an increase of 3 floors and an increase of 2 floors in relation to the apartments he owns in the condominium.  The value of the damage will be discussed below in the chapter "The Amount of Financial Compensation".

Technical specifications of owners' apartments

108. In accordance with the agreement, the existing condominium built in the early 1960s will be demolished and a new building will be built in its place, including new apartments that will be allocated to the owner and the entrepreneurial company. In accordance with the provisions of clause 5.6 of the agreement, "the level of the technical specifications of the owner's apartments will be in accordance with the attached technical specifications (Appendix G) and in any case its level will not be less than the level of the standard technical specifications of the developer's apartments (not including garden apartments and roof apartments), but it is hereby clarified that if the developer improves any part of the standard technical specifications in the developer's apartments in accordance with the demand of unit buyers from the developer and in exchange for a separate payment that the developer will receive from the applicant for the change for the improvement in the standard specifications, then the owners will not be entitled to receive the same improved specifications from the developer." 1 of the agreement, that the apartment owners may request the developer company to make internal changes for them in the new apartments that are "feasible from an engineering point of view" (moving internal partitions and walls, canceling them, moving electricity, water, plumbing, communications, location of interior doors, location of circuit breakers), which do not include an addition in relation to the technical specifications that will be approved.  This is free of charge and within the time period set out in this section.  For the purpose of planning and ordering the changes, the apartment owners are entitled to consultation meetings with an interior designer on behalf of the developer company, as detailed in clause 11.2 of the agreement.
109. As for Poliker, which will receive 3 residential apartments instead of the 5 apartments it currently owns, it was stipulated in clause 9 of the Poliker Agreement, with reference to the united roof apartment, that it would be built "with the salt room that exists today in the owner's [Poliker's] current apartment, which is located in the perimeter of the building, a wet sauna and real wood parquet in all the rooms except the bathrooms. Notwithstanding what is stated in clause 11 of the agreement, it is clarified that with respect to the owner's roof apartment, the owner will be entitled to order changes free of charge as stated in clause 11.1 of the agreement until the date of the pouring of the aforementioned apartment [change of the date of the right to make the changes]."
110. According to the defendants, the financing of the entrepreneurial company, the construction of a salt room and a wet sauna in Poliker's roof apartment, and the covering of the floor of the apartment with wooden parquet, constitute an excess consideration given to Poliker, which amounts to a material violation of the equality of consideration.
111. The law with the defendants. As I noted above, the principle of equality of consideration must also be upheld in relation to 'other additional' considerations that relate to an economic benefit given to the apartment owners in the framework of the implementation of a TAMA 38 project in the condominium.  This includes providing uniform technical specifications for all the existing residential apartments in the condominium, in accordance with the mechanism set forth in our case in clauses 11.2-11.1 of the agreement.  A salt room, a sauna room and the floor covering in wooden parquet are not among the components of the technical specifications set out in the agreement, but rather constitute unique additions that deviate from it.  In the meantime, I am of the opinion that the owner of an apartment in a condominium, whose apartment has unique systems and facilities (which are not suitable for a person with disabilities), such as a sauna, a jacuzzi, a 'smart home' system, an acoustic study and a luxury kitchen with advanced integral appliances, is not entitled to finance their installation in his new apartment.  In my opinion, such financing, which is given individually to an apartment owner in a condominium, is not one of the acceptable considerations in the execution of a TAMA 38 project, since it is not required by the nature of the project, and therefore is considered an excess consideration that amounts to a violation of equality of consideration.
112. In the circumstances at hand, the undertaking of the entrepreneurial company to build a salt room and a wet sauna in Poliker's roof apartment and to cover the floor of the apartment with real wood parquet constitutes an excess consideration that amounts to a material violation of the equality of consideration. The value of the damage will be discussed below in the chapter 'The Amount of Financial Compensation'.

Architectural Consultancy Services

113. According to the defendants, Poliker enjoys excess consideration due to the receipt of architectural services that are not provided to the other apartment owners, which amounts to a violation of equality of consideration.
114. In accordance with clause 11.2 of the agreement, the apartment owners in the condominium are entitled to consultation meetings with an interior designer on behalf of the developer company, for the purpose of planning and ordering the interior changes to the apartments to which they are entitled under the agreement. In accordance with this clause, a limit was set on the scope of the consultation meetings "up to three hits of two hours each".  The Poliker agreement stipulates with reference to this clause: "It is clarified that for the purpose of planning, the developer will bear the costs of the services of architect Maoz Price."
115. As stated in the expert's opinion, which was not contradicted by the defendants, "the plaintiffs' claim that the architect Maoz Price is the interior designer on behalf of the developer ... is a clarification and not a special addition of the roof apartment" (paragraph 2.15.7 on page 20 of the opinion).  In the words of the expert, "As clarified in the response to the defendants' claims, the architect of Maoz Price is the architect of the project, so that he is not an architect external to the project, and the actual advice is usually given by the firm's employees and not necessarily by the firm's manager himself" (paragraph 4 on page 4 of the expert's response to clarification questions).
116. Therefore, I have not found support for the defendants' claim that in this matter Poliker enjoys excess consideration. I will add, more than necessary, that in circumstances in which Poliker has 5 apartments in the condominium that are about to become 3 residential apartments, the provision of additional architectural services to Poliker does not indicate a material violation of the equality of consideration.  This is in view of the substantial difference that exists in this matter between Poliker (the owner of 5 apartments in the condominium) and the other apartment owners.

Legal Consulting Services

117. As to the defendants' arguments that the entrepreneurial company bears the cost of legal advice given to Poliker only, which constitutes excess consideration, I reject it in the absence of support for what is stated in the agreement, including in the Poliker agreement (see also: section 2.15.6 on page 20 of the expert opinion; paragraph 3 on page 4 of the expert's response to clarification questions; the expert's testimony, minutes of the hearing of September 18, 2022, page 5, lines 32-36).
118. More than necessary, I would add that an undertaking by an entrepreneurial company to bear the cost of legal advice to the owner of more than one apartment in a condominium, for the purpose of giving his consent to the execution of a TAMA 38 project in a condominium, may be reasonable and acceptable in the circumstances of the case. This, in view of the material difference in his proprietary status and the scope of his rights in the condominium compared to the other apartment owners, has implications for the scope of the risks and complexity of the engagement in the agreement, and its legal and economic implications, in a manner that justifies an individual examination of the agreement in his case.

Moving services of the contents of the owners' apartments

119. According to the defendants, Poliker enjoys excess consideration due to the receipt of moving services that are not provided to the other apartment owners, which also amounts to a material violation of the equality of the considerations.
120. In accordance with the provisions of clause 8.5 of the agreement, the entrepreneurial company undertakes to contract with a moving company, "which will pack, transport and unpack the contents of the apartments, of the owners, who live in the building or of the owners who do not live in the building, but whose current apartment contains contents that require evacuation, from the current apartment to the alternative apartment and from there to the new apartment. Alternatively, "in accordance with the sole discretion of the developer", the entrepreneurial company undertakes to bear the costs of the transportation, "up to a total of ILS 8,000 + from a tax appeal (ILS 4,000 per direction of transportation)...  against a lawful tax invoice issued in the name of the developer".  In accordance with the provisions of clause 8.6 of the agreement, "to the extent that at the time of ordering the move, any of the owners of furniture items of real monetary value, connected to the existing apartment, the developer shall finance their dismantling and reassembling in the new apartment."
121. In clause 6 of the Poliker Agreement, it was stipulated in this regard that "with respect to clause 8.5 of the agreement - it is clarified that the developer will bear the transportation costs of all the equipment in the owner's [Poliker] apartments, including the removal of Sub Zero refrigerators and studio equipment by means of a crane, if required. If the developer chooses to bear the transportation costs that the owner will have in lieu of his direct engagement with a moving company, it is clarified that in relation to the owner's apartments, the amount of transportation expenses borne by the developer will not be restricted, provided that a tax invoice is duly produced in the name of the developer."
122. I hereby reject the defendants' argument for the provision of excess consideration in this matter, since in accordance with the agreement, all apartment owners are entitled to financing transportation services, including "the removal of furniture of real monetary value". As to the undertaking of the entrepreneurial company to finance the transportation services of the contents of the Poliker apartments without a limit of amount (to the extent that the entrepreneurial company prefers the alternative of bearing the cost of the moving services instead of the transportation being carried out by a moving company on its behalf), I do not believe that this is an excess consideration that amounts to a material violation of the equality of the considerations.  This is from the outset that Poliker owns 5 apartments in the condominium (of which 4 are residential apartments), and taking into account that it is also required to produce a tax invoice, a condition for the entrepreneurial company to finance its expenses as aforesaid.  In the words of the expert in his opinion, "In my estimation, given that Mr. Poliker has 5 subplots, for which he receives 3 residential apartments, even if there is a special addition in respect of clauses 11.1 and 11.2 of the TAMA agreement, it is not an exception and/or has a substantial economic value in the entirety of Poliker's rights", which was not contradicted by the defendants.

Rent during the construction period

123. According to the defendants, Poliker enjoys excess consideration due to entitlement to rent for the one-room apartment on the basement floor, which amounts to a material violation of the equality of the consideration.
124. In accordance with the provisions of clause 8.1 of the agreement, during the construction period as defined in this clause "the developer shall bear the expenses of rent for the rental of alternative apartments for each of the individual owners, in a monthly sum to be determined by the appraiser [defined in clause 2 of the agreement, "a certified real estate appraiser who shall be appointed by agreement by the parties' attorney and shall appear on the list of recognized appraisers ..."] immediately after the eviction notice... and who shall be appointed to estimate the value of the rent that would have been received in respect of each of the current apartments in accordance with its condition, under free market conditions and neutralizing the effects of the project and/or of projects being built in the vicinity of the building.  The developer will bear the appraiser's fees."
125. In clause 7 of the Poliker Agreement, it was stipulated, with reference to clause 8.1 of the agreement, that "for the avoidance of doubt, the developer will bear such rent for each of the owner's current apartments."
126. I hereby reject the defendants' argument for the provision of excess consideration in this matter, since the provisions of the agreement and the Poliker Agreement as aforesaid are consistent with the principle of equality of consideration. To the extent that within the framework of an agreement for the execution of a TAMA 38 project in a condominium, an entrepreneurial company is willing to pay the apartment owners rent during the construction period, this economic benefit will be available to all apartment owners in accordance with the purpose of the apartment (residential, office, commercial, storage) and its size.  As stipulated in the agreement, a certified real estate appraiser appointed with the consent of the owners will estimate the amount of rent for all the apartments in the condominium, in accordance with accepted appraisal rules and agreed variables (the current condition of the apartment and free market conditions excluding the impact of the project and projects being built in the vicinity), which are reasonable and acceptable variables in the circumstances of the case.
127. Interim Summary: With regard to the considerations for 'other additions' that concern upgraded technical specifications for Poliker's roof apartment (the construction of a salt room and a wet sauna and the covering of the floor of the apartment with real wood parquet), this is an excess consideration that amounts to a material violation of equality of consideration. On the other hand, the provisions of the agreement and the Poliker Agreement regarding the financing of architectural consulting services, financing packaging and transportation services, and the payment of rent for all the apartments in the condominium, do not indicate that Poliker was given excess consideration and that there is a material violation of the equality of consideration.  In addition, it has not been proven that the financing of legal advice to Poliker has been proven.

President of the Entrepreneurial Company in Tax Payments

128. In accordance with the provisions of clause 17.2.7 of the agreement, "Subject to the provisions of clause 3.12 above [regulating the use of the exemption available to any of the owners in accordance with the provisions of the Real Estate Taxation Law (Appreciation and Purchase), 5723-1963], the developer will pay the full betterment tax, at the time of a criminal appeal of any law, and without derogating from any legal right to file an objection and/or appeal against the charge, in respect of the transaction that is the subject of this agreement, the obligation to pay, the criminal appeal of the law, applies to the owner. For the avoidance of doubt, subject to the provisions of clause 3.12 above, and without derogating from the rest of its obligations, the developer undertakes to pay exclusively and without exception the full amounts of the betterment tax that will apply in respect of each of the subplots specified in clause 4.24 above."
129. In accordance with the provisions of clause 4.24 of the agreement, the developer declared "that he is aware that in accordance with the registration text attached to Appendix A to this agreement, H.H. Yehuda Poliker is the owner of subplots 1, 2, 3, 10 and 13 in the existing building, and that Ms. Nava Sheinman is the owner of subplots 4 and 7 in the existing building, and therefore they are not entitled to an exemption from betterment tax and/or tax appeal for construction services and/or any other tax to which the other apartment owners are entitled.  However, and notwithstanding the provisions of this agreement and as a growing provision, the developer undertakes to bear exclusively all tax payments, without exception, that will apply in respect of all the aforementioned subplots within the framework of the project."
130. In clause 5 of the Poliker Agreement, it was stipulated that "notwithstanding the provisions of clause 4.24 and/or clause 17.2.7 of the agreement and/or anywhere else in the agreement, the developer shall bear the costs of all taxes that will apply to the owner [Poliker] in connection with the project, up to the sum of ILS 1.25 million. If the amount of taxes exceeds the aforementioned amount, the owner will bear the difference in the dates according to the law and in a manner that will not delay the execution of the project."
131. According to the defendants, since Poliker and Scheinman are separate owners of a number of apartments in the condominium, they are destined to be liable for tax payments as part of the execution of a TAMA 38 project in the condominium. Therefore, the undertaking of the entrepreneurial company to bear the costs of all the taxes that will apply to the owners in the framework of the execution of a TAMA 38 project in the condominium, amounts to additional consideration for Poliker and Scheinman, at the expense of all the other apartment owners in the condominium, who could instead receive a greater consideration from the entrepreneurial company.

I am unable to accept the argument.

132. In accordance with the provisions of clause 5.11 of the agreement, "it is clarified and agreed that the owners will not be required to bear any payment for their engagement with the developer in this agreement, unless expressly stated otherwise in this agreement." Accepted and common wording in agreements of this type, given the undertaking of developers in projects executed by virtue of TAMA 38 to finance all the costs involved in the execution of the project. This is in the spirit of the provisions of TAMA 38, which provides apartment owners in a condominium and the developer with economic incentives in order to encourage apartment owners to strengthen the condominium against earthquakes in accordance with TAMA 38 without being required to bear financial responsibility for doing so.  A provision in the agreement, according to which the owners are exempt from any payment in the framework of the execution of a TAMA 38 project in the condominium, which is accompanied by an undertaking by the entrepreneurial company to bear all tax payments to the extent that they will apply in the framework of the execution of the project, including the tax liability of any of the apartment owners, corresponds with this rationale, the purpose of which is to ensure the execution of the project.  Requiring the owner of a number of apartments in a condominium to bear tax payments deriving from his ownership in the framework of the execution of a TAMA 38 project means imposing financial liability on him, unlike the other apartment owners in the condominium who are exempt from any payment in the framework of the execution of the project.  In the sense of a lesser consideration for this owner, which amounts to a violation of the equality of the consideration in his case.
133. The Honorable Senior Supervisor D. Katzir Brin, in her determination on this matter in the dispute before her, stated: "This is a project in which the apartment owners pay nothing (i.e., to the extent that there is a tax liability, it is paid by the developer), and therefore plaintiff 2 is entitled to this benefit in relation to her 2 apartments.  The consideration in the agreement, in my opinion, is expressed in the fact that none of the apartment owners in the house is required to pay taxes for the realization of the project, including plaintiff 2, and therefore it is not a 'excess consideration'" (Supervisor of Land Registration (Tel Aviv) 5/849/2020 Bronfman v.  Dermer, paragraph 88 of the judgment, published in Nevo (September 13, 2022)).  An appeal in this matter was rejected by the Court of Appeal, the Honorable Justice L.  Bibi, in which it held: "The appellants, each of whom has one apartment, are not equal to respondent 2 in whose name two apartments are registered, and therefore there is no basis for the claim that they were discriminated against against her.  Similarly, I did not find it necessary to intervene in the Supervisor's determination that the developer's wife did not pay the tax on behalf of respondent 2, as well as in the possibility that she was given the assistance of architectural advice - in order to constitute surplus consideration for respondent 2.  This is because the appellants did not contradict the Supervisor's determinations that this is an equal decree, which was taken against all the tenants who, in accordance with the provisions of the TAMA agreement, do not bear any costs in respect of the project and were given the opportunity to be assisted by architectural advice" (Bronfman case, paragraph 27 of the judgment).
134. In view of the aforesaid, I am of the opinion that the provision of clause 5 of the Poliker Agreement actually worsens his situation in relation to the agreement and constitutes a material violation of the equality of consideration in his case.
135. The Remedy for Infringement of Equality of Consideration
136. An agreement was reached between the plaintiffs and defendant 1, the subject of the partial judgment, according to which to the extent that it is determined that in the framework of the execution of a TAMA 38 project in the condominium in accordance with the agreement, the equality of consideration in the defendant's case has been violated, the remedy (the remedy for the injury) will be in the form of monetary compensation to be paid to the defendant by the entrepreneurial company.
137. I hereby apply the monetary compensation mechanism in the case of defendant 2 as well, since I am of the opinion that the remedy for the granting of excess consideration, as in our case, is by way of payment of monetary compensation. This is both since defendant 2 did not argue (in the statement of defense and in general) for any other possible concrete alternative for the execution of a TAMA 38 project in the condominium that corresponds to its objection (the Zelinger case, paragraph 22 of the judgment), and in the case of the execution of a TAMA 38 project in the condominium according to the agreement, instead of rejecting the claim and returning the apartment owners to the 'starting point'.
138. As I noted in the Stein case, a claim for approval of a TAMA 38 project in a condominium due to the refusal of a minority of apartment owners to carry it out, comes to the Supervisor of Land Registry after many years of bumpy roads that the apartment owners go through in their request to promote the execution of the project in the condominium. It begins with the initiation of the project, recruiting all the apartment owners, hiring the services of professionals to carry out tests related to the feasibility of executing the project with all its implications, including a developers' tender, moving on to negotiations with a selected development company, ending with the signing of an agreement regulating the rights and obligations of the parties, and ending with the submission of an application for a building permit that complies with the requirements of the planning institution, and the receipt of a building permit under conditions that constitute a prerequisite for clarifying the claim before the supervisor.  All this, given the purpose underlying TAMA 38 and the public interest protected by it, is to ensure the resilience of condominiums in Israel against earthquakes in order to prepare for an earthquake scenario, and not to maximize the profits of the apartment owners (ibid., paragraph 84 of the judgment).  As the court further held in the Dorfberger case, "the interest of the apartment owners in improving their situation, by granting the economic incentives to the developer, is not part of the purpose of TAMA 38, but rather is a result of the public interest in strengthening the buildings, and it is only a means to achieve this goal" (ibid., paragraph 31 of the judgment).
139. I will therefore turn to an assessment of the value of the financial damage caused to the defendants in respect of excess considerations and lesser considerations that were given in accordance with the agreement.
140. The amount of monetary compensation
141. Within the framework of the agreement, excess considerations given to Sheinman and Poliker in comparison to considerations given to each of the defendants, alongside lesser considerations given to Poliker, as detailed in detail above. I will discuss below the valuation of the financial damage caused to the defendants, with respect to each of these matters.

Consideration 'Extra space'

140. With regard to the 'addition of space' of the consideration apartments in the new condominium that will be built in accordance with the agreement, I ordered, as stated, that 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 each of the defendants is entitled, given their relative share of the building rights.
141. According to the expert's opinion, the value of 1 square meter built equivalently in the condominium is ILS 57,500, taking into account the significant slowdown and downward trend in prices at the time the opinion was issued and the location of the condominium, and based on transaction reports in the vicinity of the condominium (paragraphs 11.2-11.1 on pages 112-114 of the expert opinion). In response to clarification questions, the expert added that the value set for 1 square meter built equivalently "did not take into account the war in the breach on October 7, 2023, as its long-term impact is unclear.  The trend of a slowdown in the market began even before the outbreak of the war" (paragraph 1.2 on page 1 of the expert's response to clarification questions).
142. According to the plaintiffs and defendant 1, the 'date of the preparation of the expert opinion' (December 2023) should not be adopted as the determining date for the preparation of the assessment. According to the plaintiffs, the determining date for the preparation of the assessment is the 'date of signing the agreement', and therefore a rate of 18%-20% of the value of 1 built square meter determined by the expert in his opinion should be deducted.  On the other hand, defendant 1 argued that the determining date for making the assessment should be set at the 'date of payment', alternatively, 'the date of submission of the expert opinion on behalf of defendant 1' (attached to the statement of defense), and alternatively, 'the date of filing the claim'.  This is done without explicitly stating the value of 1 square meter built in accordance with each of the alternatives, but with reference to the errors that occurred as claimed by the expert in conducting the assessment, for which the value of 1 square meter built must be determined in the sum of ILS 75,000 for a penthouse apartment and ILS 67,400 for a regular apartment.
143. I hereby reject the arguments of the parties in this matter. A basic rule is that in the absence of any other determination, the date of the preparation of an opinion concerning a real estate appraisal is the determining date for the preparation of the assessment (see also: the expert's testimony, minutes of the hearing of September 18, 2024, page 7, lines 12-13).  In the parties' agreement to the appointment of the expert, there was no reservation regarding the date of the assessment.  Insofar as there was one, it should have been clarified prior to the appointment of the expert, and in any case it had not yet begun the work of writing the opinion and preparing the assessment.  I am of the opinion that there should be no appropriate course of action whereby after the expert opinion has been given, a party to the proceeding seeks to change retroactively the criterion underlying its drafting, but because the result of the opinion does not satisfy him.  I will add, without derogating from the aforesaid, that the arguments of the parties in this matter should be rejected even on their merits in the absence of any basis and support for the claim, including in the absence of the expert's investigation in this matter.
144. Defendant 1 further argued that even on the date of the assessment (December 2023), the expert erred in determining the value of 1 square meter built equivalently in the condominium at a value of ILS 57,500, in comparison to similar transactions in the vicinity. After examining the claim, I reject it because I did not find that there was a mistake in the opinion, which was also prepared in this matter in an objective and professional manner, as a result of the expert's rich experience.  As the expert explained in his interrogation, in the reports of transactions in the vicinity of the property that he brought in the opinion and which were presented to him in his cross-examination, the value of 1 built square meter does not include the areas attached to the apartments (balcony, parking, storage), which, after being added in accordance with the reduction factors in relation to the built-up area compared to the total sale price, and neutralizing the increase in floors, the value of 1 square meter is reduced.  This is in contrast to the manner in which the expert determined in his opinion the value of 1 square meter in the condominium in question, which includes areas attached to the apartments according to the factors of reduction and neutrality of its increase in floors.
145. In the words of the expert in his testimony, "The apartments that are here have a balcony of 12-14 square meters, in addition to the reported area, new apartments, so when I refer to the equivalent area, I also take into account the balcony that is not located here, and the balcony that in this case gets 0.4, as I think, is another 4-5 square meters. Take these 4-5 square meters and add them to the meters, and you get that the area [the value] is smaller." Later on, "In my transactions on page 114.  There is a transaction in Remez 21 of 101 square meters, 6,350,000 shekels on the fifth floor.  If I go and translate the equivalent meter I have to take the 62,000 ILS, after that add the balcony, apartment 101 is no longer 101 is 106 square meters, if I neutralize the addition to the fifth floor floor I subtract 5% for this purpose.  I reach a square meter value of 57,000 NIS" (Minutes of the hearing of September 18, 2024, page 18, lines 7-37).  In the meantime, as the expert added and clarified in response to clarification questions, "market conditions, as stated, regardless of the war and even before it, are of benefits in the terms of purchase and benefits in the specifications of the apartment, which in practice lead to the existence of a hidden price assumption that is not reflected in the price of the apartment in the betterment tax report, so that the price per square meter should be even lower" (paragraph 1.4 on pages 1-2 of the expert's response to clarification questions).
146. In view of the above, I adopt the expert's determination in the opinion that the value of 1 square meter built equivalently in the condominium is ILS 57,500.
147. Therefore, the amount of monetary compensation to which each of the defendants is entitled, for infringement of the equality of consideration with respect to the reduction in each defendant's share of the 'additional area' consideration (paragraph 89 above), amounts to ILS 156,400 (2.72 square meters X 57,500 NIS).
148. With respect to the excess consideration given to Sheinman, the value of the excess consideration is ILS 872,275 (15.17 square meters X 57,500 NIS). With respect to the excess consideration given to Poliker, the value of the excess consideration is ILS 62,675 (1.09 square meters X 57,500 NIS).

Consideration 'Additional Space' - Parking and Storage

149. With regard to the 'additional space' considerations 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, I found, as stated, that the equality of the consideration in relation to Poliker was impaired when it received less consideration of 1 parking space and 3 warehouses.
150. According to the expert's opinion, the value of parking in the new condominium to be built is ILS 400,000 (section 2.16 on page 22 of the expert opinion). The parties did not dispute this determination.
151. In addition, according to the expert opinion, the value of a warehouse in the new condominium to be built, which is given in a uniform area for all the owners (5 square meters), is ILS 115,000 (5 square meters x 23,000 NIS) (paragraph 2.16 on page 22 of the expert opinion). The parties did not dispute this determination.
152. In these circumstances, and having found the expert's determinations to be reasonable and in accordance with accepted appraisal rules, I hereby adopt and determine the value of Poliker's lesser considerations as follows: ILS 400,000 for the reduction of 1 parking space, and ILS 345,000 for the reduction of 3 warehouses.

Consideration 'Other Addition' - Rise in Floors

153. With regard to the 'other addition' considerations of the type of increase in floors, Sheinman has excess consideration due to an increase of 3 floors in relation to one of the two apartments she owns in the condominium. Poliker has less consideration for a decrease in one floor, as well as excess consideration due to an increase of 3 floors and an increase of 2 floors in relation to the apartments he owns in the condominium.
154. According to the expert's opinion, the average value of an increase in the floor in the new condominium to be built is a total of ILS 90,448 (section 2.16 on page 22 of the expert opinion). According to defendant 1, a high coefficient should be added to this value that reflects the increase to the penthouse floor.  I hereby reject the argument that, as stated, the expert determined the average value of the floor increase in the condominium, taking into account the coefficients of increase of all the floors in the new condominium to be built, as detailed in paragraph 2.14.3 on page 16 of the expert's opinion (under 'floor coefficient' in the table), and at a value of 1 square meter built equivalently in the condominium.
155. Therefore, and since I have found the expert's determination to be reasonable and in accordance with accepted appraisal rules, I adopt and determine the value of Sheinman's excess consideration in the sum of ILS 271,344 (2 floors in Beitar X ILS 90,448), and the value of Poliker's excess consideration in the sum of ILS 361,792 (4 floors in Beitar X ILS 90,448).

Consideration 'Other Addition' - Technical Specifications

156. With regard to the 'other addition' considerations of the type of technical specifications, Poliker has extra value due to an upgraded technical specification for the roof apartment, which includes the construction of a salt room and a wet sauna and the covering of the floor of the apartment with real wood parquet.
157. According to the expert's opinion, the cost of dismantling, storing and reassembling the salt room is ILS 100,000 (section 2.15.8 on page 21 of the expert opinion). In his interrogation regarding the salt room, in light of defendant 1's claim that the cost of installing the salt room is ILS 700,000, the expert added and clarified: "It means taking a room, from the room I am building on the floor anyway, and closing it, it's like a bathroom.  I gave 100,000 ILS a total cost with the storage of it.  If it's new, then the addition is another 20,000 ILS.  You have to take into account that I'm building the room itself.  I'm not building a new room, I'm building wall cladding for it.  A salt room in general is a room he had, I think I attached his picture, a salt room is basically a room with a covering.  I show my lady what it looks like.  There is nothing special about it" (Minutes of the hearing of September 18, 2024, page 20, lines 26-35).
158. Therefore, since defendant 1 has not been able to contradict the expert's determination regarding the value of installing the salt room in the Polyker roof apartment, and since I have found it reasonable and acceptable, I adopt it.
159. According to the expert's opinion, the cost of installing a wet sauna is ILS 50,000, and the cost of covering the floor of the apartment with wooden parquet is ILS 50,000 (section 2.15.8 on page 21 of the expert opinion).
160. According to defendant 1, the expert underestimated the cost of installing the wooden parquet cladding and the cost of the sauna room, in comparison to the higher valuations of an expert on behalf of the defendants, real estate appraiser Assaf Levy, whose opinion was attached to the statement of defense. I hereby reject the argument, both since the expert was not questioned and confronted with these assessments within the framework of his cross-examination, as required in order to undermine his conclusions, and since the eight expert opinions, with the consent of the parties, an expert opinion submitted by the parties will be considered as if they were not accepted as evidence (Regulation 88(d) of the Civil Procedure Regulations), as explicitly stated in the decision of April 2, 2023 regarding the appointment of the expert.  All this, taking into account that the expert was appointed with the consent of the parties and was required to give an opinion regarding the violation of equality of consideration with respect to all the components of the consideration given to the apartment owners in accordance with the agreement.
161. Therefore, I adopt the expert's determinations regarding the value of installing a wet sauna and the value of wooden parquet cladding in a Polyker roof apartment.

Balancing the surplus and the lesser returns

162. The following is a table summarizing all the excess and lesser considerations that were given in relation to Poliker and Scheinman:
163. It follows from the aforesaid, with respect to all the components of the consideration in accordance with the agreement, that Poliker is entitled to a lesser consideration in the total amount of ILS 120,533. Once he signs the agreement and applies this consideration, I am not required to award compensation in respect of it.
164. On the other hand, with respect to all the components of the consideration in accordance with the agreement, Sheinman has an excess consideration in the total amount of ILS 1,143,619.
165. The defendants are entitled only to their proportional share of the excess considerations given to Sheinman. This is because the other apartment owners (the plaintiffs) gave their consent to the full consideration under the agreement, and in the process waived their relative share of the excess considerations upon signing the agreement (see also: the Stein case, paragraph 87 of the judgment).
166. The relative share of each defendant in the surplus considerations is in accordance with its relative share in the building rights, which stands at 9.34%. Accordingly, the value of the damage in relation to each defendant is ILS 106,814 (9.34% X ILS 1,143,619).
167. In light of the above, the total amount of compensation to which each defendant is entitled is ILS 236,214 (ILS 156,400 + ILS 106,814). To this sum must be added linkage differences according to the Consumer Price Index, an official index reflecting the change in the cost of living (inflation) in Israel, in order to maintain the real value of the amount of compensation from the date of the expert opinion (December 2023) until the date of payment.
168. Conclusion - Violation of equality of consideration
169. It emerges from the aggregate that an examination of the disputes that were made between the parties regarding a violation of the principle of equality of consideration with respect to all the components of the consideration given to the apartment owners in the condominium in accordance with the agreement and its additions (including the Poliker Agreement), both considerations of the type of 'additional area' and considerations of the type of 'other addition', revealed that Poliker was not given excess consideration; Sheinman was given excess consideration, for which the defendants are entitled to their relative share of this consideration; the defendants were entitled to a deduction from their relative share of the building rights with respect to the addition of the area of the consideration apartments. Accordingly, each defendant is entitled to monetary compensation in the sum of ILS 263,214, as aforesaid.

Mutual Benefit Relationship - Shared Underground Parking with a Neighboring Building

169. According to defendant 2, the execution of a TAMA 38 project in the condominium should not be approved in accordance with the agreement, since it was stipulated in the addendum to the agreement that the entrepreneurial company is entitled to build the underground parking lot in the new house that will be built jointly with the underground parking lot of a nearby building, the condominium at 9 Biltmore Street, with which the entrepreneurial company signed a similar agreement with its owner for the execution of a TAMA 38 project of the type of demolition and reconstruction. This, as claimed, involves the registration of mutual benefits that require the consent of all the apartment owners, and therefore amounts to a violation of defendant 2's rights in the condominium.  Except for this laconic statement, defendant 2 did not specify in the statement of defense the reasons for the violation of the construction of the shared parking lot.  The real estate appraiser's opinion that she attached to her statement of defense deals only with examining the violation of equality of consideration, as appears from its title and its objectives.  Even in its summary it does not detail the nature of the harm caused by the construction of the underground parking lot jointly.
170. In its decision of July 11, 2022, the Planning Authority approved the construction of an underground parking lot common to the condominium and the condominium at 9 Biltmore Street, pursuant to the developer's request for a building permit (pages 56-57 of the expert opinion).
171. I will preface by saying that I am of the opinion that the granting of a mutually beneficial relationship for the benefit of the apartment owners in the two condominiums, in relation to the use of a new common underground parking lot that will be built after the demolition of the existing houses, in and of itself, does not constitute a reasonable reason for refusing to carry out a TAMA 38 project in the condominium. This requires an apartment owner who refuses to carry out the project to explicitly present the reasons for the harm caused by the construction of the condominium parking lot.  All this, taking into account that from the outset, within the framework of the implementation of a TAMA 38 project in a condominium with the construction of additional new apartments, as in our case, there is a reduction in the property rights of the apartment owners in the condominium, inter alia, due to the dilution of their relative share in the common property and the voting power.  As stated in the judgment in the Kalchuk case, depreciations in the property rights of the apartment owners in the condominium are inherent to the execution of a TAMA 38 project in the house, which includes the addition of new apartments, along with many benefits that outweigh these devaluations.  This includes, in my opinion, the granting of a mutual benefit that enables the apartment owners in the two buildings to make mutual use of the underground ground for parking purposes, given the attaching of parking space in the parking lot to each apartment.  As stated in the Kalchuk case, it is necessary to examine whether this depreciation is negligible in comparison to the enjoyment that the apartment owners have from the execution of the project in the condominium as a whole (ibid.).
172. In our case, as stated, defendant 2 did not claim any concrete harm caused to it due to the granting of a mutual benefit of passage and use of the underground parking lot shared by the two buildings. On the contrary, within the framework of the clarification of the proceeding, it became clear that the construction of the joint parking lot would improve and improve the rights of the apartment owners in the condominium.  This is since, in accordance with the undertaking of the entrepreneurial company in the addendum to the agreement, the entrance and exit from the parking lot were planned so that one of the buildings would have the entrance ramp and the other building would have the exit ramp (clause 4 of the addendum to the agreement of August 8, 2021).  In the words of the expert in response to the question of clarification by defendant 2 in this matter: "As for the connection of the buildings, it is only the level of the basements, without a connection on the floors above the ground, which allows for an improvement in the accessibility of each of the buildings to the basement, in the descending ramp and common passageways in the basement, by way of a benefit relationship, which contributes to the improvement of the planning, and there is no depreciation in it, since otherwise each building would have been required, separately, to allocate more accessible areas for parking in the basement" (paragraph 5.7 on page 9 of the expert's response to clarification questions).
173. Moreover, within the framework of the expert's cross-examination, defendant 2 chose not to confront the expert with an allegation of any harm caused to her as a result of the construction of the shared parking lot, which, as stated, was not even claimed in the statement of defense. The defendant focused her questions on the expert, but on the lack of reference in the opinion, according to her, to the question of the existence of the shared parking lot.  As she put it in his interrogation: "Didn't you think to address the question of the existence of a shared parking lot, the impact of the shared parking lot? ...  When you see that there is a shared parking lot, how does that manifest itself?" To this, the expert responded: "The entire opinion is based on the request for a permit to have a shared parking lot.  I refer to page 57 of my opinion, which is a continuation of the protocol [of the planning institution], and there you see the building.  There is our building together with the building next door, and there are areas there that are in demand, and everything is based on the fact that this is a building that is not consolidated, built separately, but there is a connection in the basements." As noted, this is the conclusion of the expert's interrogation on this matter (minutes of the hearing of July 25, 2024, page 8, lines 26-41, and page 9, lines 1-13).
174. The aforesaid is sufficient to reject the argument of defendant 2.
175. In its summary statement, defendant 2 referred to the judgment in a different appeal - Civil (Tel Aviv District) 7187-10-19 Yellin v. Goren, published in Nevo (April 27, 2020), which was given in an appeal against the judgment of the Supervisor of Land Registration Y.  Antebi Sharon (Case 5/583/2017).  The core of the dispute is the construction of a joint automatic parking lot for two separate condominiums, as part of an agreement for the execution of a civil case 38 project of the type of reinforcement, which includes the expansion of the existing apartments and the construction of new apartments, while the parking lot will be available for the use of all apartment owners.  In her judgment, the Honorable Justice L.  Bibi ruled that the construction of the said parking lot, which requires the mutual purchase of interest interests, deviates from the provisions of the Reinforcement Law and therefore requires the consent of all the apartment owners.  This is in the distinction between arranging parking for existing apartments in the condominium (owners' apartments), to which the above determination will apply, and arranging parking for new apartments (the developer's apartments), to which the provisions of section 5 of the Reinforcement Law will apply.  With regard to the arrangement of parking for existing apartments in the condominium in an agreement for the execution of a TAMA 38 project in the condominium of a type of reinforcement that includes the construction of new apartments, it was determined that the objection of the recalcitrant minority should not be required within the scope of the provisions of section 5 of the Reinforcement Law (page 38 of the judgment).  It was determined that the applicability of section 3 of this law, which regulates the execution of reinforcement works in a condominium whose purpose is to change the common property (which does not include the expansion of existing apartments and the construction of new apartments), should be examined.  In accordance with the provisions of section 3 of the Reinforcement Law, the execution of such works requires only a prior decision by most apartment owners in the condominium.  Furthermore, in accordance with the judgment, section 3 will apply to the matter of arranging parking for existing apartments (in an agreement for the execution of a TAMA 38 project of the type of reinforcement that includes the construction of new apartments), provided that one of the following two conditions is met: the works for arranging parking for existing apartments are inherently connected to the reinforcement or these works do not materially alter the common property (page 37 of the judgment).  There, it was determined that the works for the construction of the parking lot for a use that is not distinct between the owners of the existing apartments and the owners of the new apartments (developer) are not works that are inherently related to the reinforcement with respect to the existing apartments (pages 38-39 of the judgment).  In addition, it was determined that the work on the construction of the parking lot significantly changes the common property and significantly detracts from the rights of the apartment owners (page 39 of the judgment).  Therefore, the consent of all the apartment owners is required by virtue of the provisions of the Land Law, which require that these works do not constitute 'normal and reasonable use' of the common property (pp.  23-33 of the judgment).
176. In contrast to the Yellin case, the dispute before me concerns the demolition of a condominium and the construction of a new house in its place by virtue of TAMA 38, which includes an underground parking lot shared by an underground parking lot in an adjacent building where parking areas adjacent to all the apartments are the owner's apartments and the developer's apartments. The relevant provision of the law (the normative residence) for the clarification of this dispute is the provisions of section 5A of the Reinforcement Law, which regulates the authority of the Supervisor of Land Registry to approve the project given a majority required for the filing of the claim, as in our case, after examining all the reasons for the objection of the minority that refuses to carry it out.  This includes a reason for refusal that concerns the construction of a joint underground parking lot with an adjacent building, while granting a mutually beneficial relationship to the two buildings in accordance with the agreement, as in our case.
177. As stated, defendant 2 did not claim any concrete harm caused to it due to the granting of a mutual benefit of passage and use of the underground parking lot shared by the two buildings. In the meantime, there is no contradiction in the expert's position that the construction of the common parking lot will actually improve and improve the rights of the apartment owners in the condominium, as detailed above.
178. Therefore, I reject the reason for defendant 2's objection to the execution of a TAMA 38 project in the condominium due to the construction of the underground parking lot in the new house jointly with an underground parking lot of the adjacent building, which is accompanied by a registration of mutual benefits.
179. Before concluding, when we are in the midst of the 'Lion's Roar' war, at a time when the residents of the country, including and in particular the residents of the city of Tel Aviv-Yafo, are forced to seek shelter and shelter from the missiles launched into our country from enemy countries, time after time, it seems that there is no need to elaborate on the great importance of carrying out a TAMA 38 project in condominiums in Israel. Within the framework of these projects, protected apartment spaces (mamad) are usually built in all condominium apartments, in a manner that contributes decisively to the personal security of the residents and to saving human lives, as we have seen even more intensely these days.  In these circumstances, an apartment owner in a condominium would do well to focus on the many benefits of executing the project, both economic and safety benefits, not only from the narrow personal aspect but also from the national aspect.  In doing so, it will help remove barriers to enable the realization of the purposes of TAMA 38, as in our case.

Conclusion

180. I hereby approve the execution of a TAMA 38 project in the condominium in accordance with the agreement and a building permit in accordance with the law.
181. Plaintiff 9 (the entrepreneurial company) will pay each of the defendants, separately, monetary compensation in the sum of ILS 263,214, plus linkage differentials according to the Consumer Price Index as of December 28, 2023 (the date of the expert opinion).
182. As stated in the agreed partial judgment, I also order with respect to defendant 2 that the payment will be made within 30 days from the date of the actual demolition (after the approval of the Tel Aviv-Yafo Municipality for the commencement of work in accordance with a building permit for the execution of a TAMA 38 project in the condominium). If the charge is not paid on time, the charge will bear linkage differentials and interest in accordance with the law from the date of the charge as stated in the preamble of this paragraph until the date of the full actual payment.
183. In addition, I order that the provisions of paragraph 11 of the partial judgment regarding the liability to pay betterment tax will also apply in relation to defendant 2.
184. In accordance with the partial judgment, defendant 1 signed the agreement.
185. Defendant 2 will sign the agreement, its appendices and all documents by virtue of it, within 10 days from the date of the judgment.
186. In the event that defendant 2 does not carry out the provisions of paragraph 185 above, I hereby appoint Attorneys Amit Nissim or Gil Brizada or Dolphin Minzer Carmon to sign on behalf of defendant 2 all the documents necessary for the execution and realization of a TAMA 38 project in the condominium, of any kind whatsoever, in accordance with the agreement and the building permit. This includes signing on behalf of defendant 2 the agreement, its appendices, a power of attorney, the agreements with the buyers of the new apartments, the requests to register warning notes in favor of the developer and his command on the registration unit and the new apartments, the requests and deeds for the transfer of ownership in the name of the purchasers, the applications and documents for the registration of a mortgage or a lien in favor of a bank or financial institution, the bank accompaniment documents, a disclosure document for the mortgagee, the applications and documents required for the purpose of amending the condominium registration order, the cancellation of the condominium registration order and the registration of a new condominium order that includes the registration of a mutual benefit for the adjacent building with respect to the basement floors, the documents required by the municipality, the planning institutions, the tax authority and any other relevant entity, as necessary.
187. With regard to legal expenses, the criteria outlined in this regard in the Civil Procedure Regulations and the case law, by virtue of which the award of legal expenses to the winning party will take into account the nature and complexity of the dispute, the procedural conduct of the parties, as well as the actual expenses required to conduct the proceeding, and the application of these in the present circumstances, the main purpose of which is to accept the defendants' claim regarding a violation of equality instructing in certain consideration components while rejecting their claims in relation to most of the consideration components set out in the agreement, as well as rejecting the defendant's claim for dismissal of the claim due to the granting of a mutual benefit of passage and use of the underground parking lot shared by the two buildings, and taking into account the resources required by the parties in the conduct of this lawsuit, I order that plaintiff 9 be obligated to pay each of the defendants legal expenses in the sum of 10,000,000 ILS. The payment will be made within 30 days from today.  If it is not paid on time, the charge will bear linkage differentials and interest as required by law from the date of the judgment until the date of the actual full payment.

The Secretariat will provide the judgment to the parties.