Caselaw

Civil Case (Tel Aviv) 25510-11-24 Cohen Naftali v. Israel Hazemi - part 30

October 29, 2026
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In addition, the defendants did not show the source of the demand to receive a larger area due to an error that applied in the agreement to all the apartment owners in the same manner.  I note that in this context, the defendants claimed in their summaries that the area of the apartment as recorded in the agreement, which originated in error, was the one that served as the basis for the negotiations that took place on the basis of the original area of the apartment + the addition of space.  This argument is based on arguments made by the plaintiffs in the statement of claim on their behalf, in paragraphs 61,73 and 74.  In the framework of these sections, it was explicitly stated that the starting point for determining the addition of the main area for each apartment was made according to a distinction between two types of existing apartments in the building - small apartments with an area of 60 square meters and large apartments with an area of 86 square meters, with the small apartments receiving an addition of a main area of 18 square meters and the large apartments of 12 square meters.  These sections also state that the addition of the main area proposed in the framework of the project takes into account the existing area of the apartment according to the original permit, on which an addition of 12 square meters of main area is granted for the large apartments and 18 square meters for the small apartments.

On the face of it, what is stated in the statement of claim is sufficient to support the defendants' arguments that in the framework of the negotiations, the basis for determining the consideration was the area of the apartment as recorded in the Pinui-Binui agreement.  However, despite this, I do not believe that the said mistake has any effect on the defendants' alleged right to receive additional area over the area of the consideration apartment set out in the Pinui-Binui agreement.  This is first of all, taking into account that the rule set out in the framework of the agreement is a "fix" rule and not a rule according to which an additional area will be added to the area of the apartments in the permit.  In other words, at the end of the day, the agreement embodied a consideration rule that does not arise from a computational point of departure.  Moreover, from the circumstances in the case, I am of the opinion that even if the mistake had become apparent at the negotiation stage, it would not have led to an increase in the consideration apartments.  This is in view of the fact that in the end, the determination of the consideration area is the result of negotiations in which the developer examines what inputs he invests in the project versus the return that will accrue to him.  In this case, the court's expert determined that - as of the relevant dates (and even more so now) - the project's profitability is borderline for the developer.  In these circumstances, in which in any case the area of the consideration apartments embodies the maximum possible from the developer's point of view, it is clear that even if it had become clear that the area of the original apartments was larger, the area of the consideration apartments would not have changed, since this would have made the project economically unprofitable.  Support for this determination can be found in the testimony of the expert on behalf of the court on page 16, lines 23-27 of the transcript:

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