Legal Updates

The Israel Lands Authority must compensate a lessee for damage caused due to a negligent delay in completing the transaction

September 3, 2023

The Israel Land Authority did not sign a leasehold agreement on time and as a result the lessee was required to pay an increased capitalization fee, at the rate of hundreds of thousands of shekels.

The Court accepted the claim and held that the Israel Lands Authority was negligent and must pay damages to the lessee. The Israel Lands Authority in its capacity as a public authority is responsible for the management of State lands, including execution of a leasehold agreements with the rights holders. The authority is required to inform the citizen who requested to lease a land, within a reasonable period of time, whether there is a possible delay in completing the transaction and if the delay may lead to a change in the terms of the transaction to the detriment of the lessee. Here, the Israel Land Authority delayed for about two years and did not inform the lessee that there is a need to vacate a container that was placed on the land, as a pre-condition for advancing the transaction. As a result of the delay the lessee suffered damage in the amount of the difference between the capitalized lease fees that he paid at the end of the day, according to a late and significantly higher assessment due to the increase in the price of the land and the lease fees that he would have been required to pay, had it not been for the delay. Therefore, the Israel Lands Authority is to pay damages to the lessee of hundreds of thousands of shekels.