Moreover, and in the examination of more than necessary, the plaintiffs further argue that even on the legal level, the defendants do not have a vested right to add land or to the independent realization of the alleged building rights, in a manner that in any case nullifies their claims regarding the right to additional consideration in respect of them. In this regard, it was specified that a condition for the realization of the building rights is the obtaining of the consent of 75% of the apartment owners in the condominium (in accordance with the provision of section 71B of the Land Law). According to the plaintiffs, with regard to the majority required as aforesaid, even if the owners of the extended apartments can be seen as being silent from objecting to the addition of building that would have been requested by the defendants, in any case the defendants would not have reached the majority of 75%, given that 13 of the owners of the small apartments (who are part of the plaintiffs) refuse to exercise the building rights by the defendants. In light of this, it was argued that in the absence of legal consent - there is no possibility of exercising these rights, and in accordance with this, it is not possible to rely on a theoretical claim of unused rights in order to justify the refusal to sign the Pinui-Binui agreement.
- The plaintiffs further point out that the project in its current form presents a reasonable entrepreneurial profit rate of 16.2%, in accordance with the economic examination conducted in accordance with Standard 21. Taking into account the above, the plaintiffs emphasize that any further increase in the consideration for the defendants or for all the original apartments will severely harm the viability of the project and frustrate it. Moreover, based on the answers to the clarification questions addressed to the expert, the plaintiffs claim that market conditions have even changed for the worse since the date of the economic feasibility study of the project, a fact that further narrowed the margin for economic error.
- In the summaries of the reply on their behalf and in response to the defendants' arguments that at the time the claim was filed, the Pinui-Binui agreement was not signed by the attributable majority as required by the Pinui-Binui Law, the plaintiffs claim that the defendants' claims have no substance. This is because at the time the claim was filed, the agreement was signed by the owners of 28 apartments out of 32 apartments in the complex. It was further argued that the defendants' claims in this context constitute an expansion of the façade and are nothing more than an attempt by the defendants to withdraw from the procedural arrangement, in which they waived these claims and agreed that the matter would be decided on the basis of the expert's opinion. Moreover, according to the plaintiffs, these claims of defendants 1-6 were rejected by a final administrative decision of the District Committee of October 23,2023, and they should not be allowed to indirectly attack this decision. With regard to this latter claim, the plaintiffs further argued with respect to defendants 7-10 (who are the heirs of the late Gila Schorr) that the claims of the latter in this context should be rejected, since they did not exhaust the administrative proceedings lawfully.
- In light of all of the above, the plaintiffs claim that there is room to accept the claim and to order the granting of the relief of an injunction instructing the defendants to sign the evacuation-construction agreement.
- As stated, the plaintiffs continued to demand alternative monetary remedy, but this remedy was continued by them.
- The plaintiffs further claim that in ruling on the costs of the proceeding, consideration should be given to the fact that the defendants persisted in their refusal to sign the Pinui-Binui agreement even after the court's expert opinion was submitted, in which all of their arguments were rejected and it became clear that their refusal was unreasonable and that the considerations offered to them were fair, reasonable and equitable.
the defendants' claims;
- The defendants, on the other hand, claim that the lawsuit should be dismissed, since their refusal to sign the evacuation-reconstruction agreement is reasonable and justified. This is in essence because the agreement is based on an incorrect area figure, which omits about 8 square meters of the legal and proprietary area of their apartments (67.6 square meters in the original permit from 1974, instead of the 60 square meters recorded in the agreement) and does not provide adequate consideration for their unused building rights. According to the defendants, this dispute causes an economic loss of about ILS 500,000 per apartment and reduces the profitability of the project to an unprofitable level of 9.2%.
- Thus, and in more detail, the defendants begin by arguing that since the area of their apartment according to the permit is about 68 square meters - as approved by an expert on behalf of the court - the gap of 8 square meters between this area and the area of their apartment specified in the Pinui-Binui agreement (60 square meters) should be added to the area of the consideration apartment to which they are entitled. The defendants further argue that due to the widening of the façade, the plaintiffs' argument in this matter in their summaries that no importance should be attributed to this area gap. This is because, in the framework of paragraphs 61 and 73-74 of their statement of claim, the plaintiffs admitted that the calculation of the existing area of the apartments and the proposed considerations were based exclusively and directly on the area of the original building permit for the building from 1974. Moreover, according to the defendants in the statement of claim, the plaintiffs even added and based their argument regarding the unreasonableness of the defendants' refusal on a factual assumption that the small apartments receive an addition of 18 square meters in the framework of the project, while the large-expanded apartments receive an addition of 12 square meters. However, according to the defendants, during the course of the proceeding, this basic assumption was proven to be incorrect, since the small apartments receive an additional 18 square meters only. This is because the court's expert categorically confirmed that the real and legal area of the original apartments is 67.6 square meters (and about 68 square meters in a rounded area), and not 60 square meters, as arbitrarily and unilaterally determined by the developer in the agreement. The defendants emphasize that this is not an area that was built without a permit in their apartment. Rather, it is part of an original, legal, approved and proprietary area of their apartment that was not taken into account. In these circumstances, the defendants claim that the deduction of approximately 8 square meters of lawfully built area from the basis for calculating the considerations constitutes a direct and disproportionate violation of their constitutional property right, which establishes a reasonable and justified ground for refusal under section 2(b)(1) of the Evacuation and Construction Law. According to the defendants, their arguments in this regard were already raised in the framework of negotiations that took place over the years, in which the defendants even proposed to appoint an agreed appraiser in this matter. However, the plaintiffs did not agree to this.
- The defendants further claim that in addition to this, they are entitled to consideration for the unused building rights in their apartments. As to this, it is argued that this is not a demand for a favor or an extortionate demand, but rather a demand that is a direct derivative of the actual economic and appraisal value of the proprietary property that the defendants give to the developer in the project's incoming state. Thus, according to the defendants, they bring with them to the project a valuable property in the form of unused building rights in the scope of about 25-26 square meters for each apartment (this is in contrast to most of the plaintiffs who have already realized their expansion potential over the years by virtue of the Gav/386 plan). It is claimed that these rights are transferred in full to the developer for the purpose of building a new residential tower that includes 96 housing units. According to the defendants, in the framework of the case law, it was determined that unused building rights are assets of great economic value that belong to the apartment owner. It was argued that this determination was even confirmed by the court's expert, who confirmed in his opinion and in his court interrogation (on page 21, lines 3-7 of the transcript) that these are rights of economic value and that the application of a coefficient of 0.44 in respect of these rights is reasonable and appraisally acceptable. It was argued that ignoring the economic value of these rights, or giving symbolic and inappropriate consideration for them, constitutes the dispossession of a significant part of their property by the defendants in favor of subsidizing the tenants who expanded their apartments or in favor of increasing the developer's profits, and it seriously harms the economic balance required in the current situation.
The defendants further argue in this regard that the plaintiffs' argument in their summaries that the unused building rights by virtue of the Gav/386 plan have expired and cannot be exercised independently and therefore have no economic value. It is argued that this is a claim that is unfounded from a planning and appraisal point of view, since these rights existed and were arbitrary on the eve of the project and were transferred in full to the developer for the purpose of increasing the new construction volume and marketing the developer's apartments in the new project. Therefore, it was argued that these are rights that the developer makes direct and commercial use in order to maximize his profits. In this context, the defendants emphasize that the very fact that the developer saw fit to grant the owners of the small apartments an additional 6 square meters for the unused building rights, constitutes a substantial and clear admission that these rights have independent economic value, which requires the provision of separate and appropriate consideration. Therefore, it was argued that the dispute between the parties does not revolve around the very existence of an economic value for the unused building rights, but only around the question of the proper scope of the consideration for these rights. It was argued that since the expert on behalf of the court confirmed that the reasonable and acceptable coefficient for the rights was 0.44, the professional basis on which the plaintiffs sought to rely in order to justify the discriminatory increase set out in the agreement was omitted. As for the opinion of the court's expert, the defendants argue that the expert's argument that the small apartments receive excess consideration should be rejected. This is because, in their approach to this determination, the expert ignores the fact that the gap in the percentage of physical expansion in the current project does not stem from an excess benefit given to the defendants, but rather is a direct result of the fact that the owners of the expanded apartments have already consumed, exercised and actually enjoyed their building rights in the past and expanded their apartments in accordance with the law on the eve of the project. This is while the defendants have preserved their rights as an unused proprietary asset - which they bring to the current project. In light of this, it was argued that comparing their physical addition to the addition of someone who has already exercised their rights in the past is a clear appraisal and economic distortion.