A breakthrough or a recipe for uncertainty? Attorney Ilan Glazer on the new eviction and building reforms

Attorney Ilan Glazer (Image courtesy of Ilan Glazer & Associates, Flash 90)

The importance of urban renewal projects in combating the worsening housing crisis, in the urgent need to protect old buildings from earthquakes and missiles, and in preparation for the expected population increase, is indisputable. However, there are significant gaps between the realization of the vision and the reality on the ground. Along with the Arrangements Law passed by the Knesset in the fall, which includes a chapter devoted to unlocking barriers to urban renewal, further reforms have been bolstered in recent weeks, with the goal of allowing more relationships and establishing clear demarcation lines for those active in the field.

Thus, last month, the Minister of Justice, Gideon Saar, signed new regulations aimed at raising the level of cooperation, transparency and trust between apartment owners and developers in eviction and construction projects. The regulations require the entrepreneurial companies, prior to signing the deal, to hold a meeting with all the apartment owners and update key aspects related to the project. This includes the project’s scope, related path, proposed changes, and funding method.

In addition, the entrepreneurial companies will need to inform the apartment owners of the project schedules and the effective date of the contract agreement between the two parties. If the apartment owners include the elderly or disabled, the entrepreneurial firms will be required to take care of their profits.. Entrepreneurial firms also have a responsibility to report whether someone on their behalf has a personal interest in the project – such as an apartment in a building, contacting a tenant, attorney, organizer, or other job involved with the project. It was also decided that entrepreneurial companies must disclose the administrative and legal measures taken against them – bankruptcy, receivership, liquidation or freezing.

The amendments to the legislation also deal with the resumes of entrepreneurial companies, with their duty to update the status of additional projects for which they are responsible. If a large percentage of apartment owners are Arab, Russian or Amharic (and do not speak Hebrew), the entrepreneurial companies should provide them with an interpreter. At the end of the meeting, an individual protocol will be sent to the apartment owners.

Construction and Housing Minister Ze’ev Elkin (right) and Justice Minister Gideon Sar (photos) Flash 90 / Jonathan Zindel)

“From the information received by us through the municipal departments responsible for tenant inquiries and other face-to-face meetings in urban renewal complexes, it has been found that many apartment owners enter into transactions without being allowed to study and understand the process,” says Iris Frenkel Cohen, legal advisor to the Governmental Authority for Urban Renewal. “Sometimes without meeting a businessman.” “Homeowners often find themselves bound by problems, with no possibility of getting rid of them. The regulations are designed to strengthen their position in the process, to allow them to enter into transactions with genuine understanding, choice, consent, and in any case greater confidence in the process.”

“These regulations are mandatory and necessary in many evictions and construction situations,” notes attorney Ilan Glazer, owner of the law firm Ilan Glazer & Associates, which accompanies apartment owners and developers on dozens of urban renewal projects. “However, I do not here admit an unusual streak of the leading companies in this field, because the regulations in general speak for themselves.”

“As someone who knows the area well, I can say that serious and experienced entrepreneurial firms have always been implementing regulations in a transparent, responsible and sensitive manner,” adds Adv. Glazer. , take care to protect the property, which is often only one, and they maintain their rights throughout the process. At the same time, there is a fear that over-regulation will sometimes create barriers and brakes, and will be abused by a minority of apartment owners striving to prevent projects from getting out of the way.”

Advocate Glazer hopes that the regulations will succeed in keeping shady agents out of the field, and those without the skill or financial support to lead projects. “These regulations will succeed in reducing the phenomenon, and the entire urban renewal will benefit.”

Expand the frame
Another step aimed at moving forward in this area is the framework agreements promoted by the Ministry of Construction and Housing and the Governmental Authority for Urban Renewal with 12 local authorities – Jerusalem, Haifa, Kiryat Yam, Netanya, Hadera, Ramat Gan, Givatayim, Bat Yam, Kiryat Ono, Lod , Beit Shemesh and Ashdod – Its purpose is to encourage evacuation and construction projects in their territories.

As part of the initiative, an amount of about half a billion shekels will be allocated to a municipal incentive that will launch urban renewal projects stuck in the pipeline and increase the volume of activity. Each additional apartment that is approved (other than the existing apartments) will receive a financial reward ranging from NIS 30,000 to NIS 25,000 to NIS 25,000. Framework agreements will be signed with the authorities, with plans to be approved by the end of December 2021 that include no less than 2,500 housing units, but these plans have not yet been implemented and no building permission was issued until last summer. ..

The significance that the Ministry of Construction and Housing sees in the framework agreements is evidenced by the fact that the responsible minister, Ze’ev Elkin, has already described them as a “breakthrough”. According to him, The future of the old towns and neighborhoods in which most residents live is in urban renewal. We are working to remove one of the major obstacles, by providing a budget for developing the infrastructure needed for construction. The agreements will lead to an exponential growth in the supply of apartments, as well as in demand areas, in favor of the elderly and young residents who want to buy an apartment.. “

An urban renewal project in Holon that accompanied the law firm of Ilan Glazer & Co. , which was completed and submitted in May 2021 (Image via law firm Ilan Glazer & Co.)

Advocate Glazer is a partner in optimism, asserting “This is a positive step.” It must be understood: every housing project generates significant costs for municipalities. Without state funding, they have no interest in promoting projects, and prefer to focus on developing areas of trade and employment, which generates high returns from real estate taxes. “Now that the government has a hand in its pocket, the ambition is for more eviction and construction projects to come to fruition.”

As for the list of selected cities, Advocate Glazer notes, “These are the authorities that are in the areas of demand and there is extensive urban renewal in them. As a complementary step, the state must also go to the periphery and craft incentives to renovate and protect the old buildings there as well. This is especially true of Settlements located on the Syrian-African rift, which are particularly exposed in the earthquake scenario.

zigzag transitions
Another issue on the agenda is the updating of Standard 21 by the appraiser – which was approved in 2012 and focuses on the economic feasibility study of evacuation and construction projects – and its adaptation to the decade-long developments in the field. Accordingly, the Department of Justice’s Evaluation Board has published a draft for public comment. Until recently, if it came to setting the threshold for consideration in evacuation and construction projects to 12 square meters and setting a minimum leading profit rate of 20%, then the now proposed standard does not specify absolute numbers, but the principles of calculation and direction of the appraiser for displaying profit in several consideration options.

Advocate Glazer explains: “The most important thing in urban renewal is certainty. When there are more question marks than exclamation points, it’s a recipe for problems. All the meandering on the topic of permutations is incomprehensible. In the past decade we’ve talked about 25 square metres, then about 12 square metres. , and today is not so clear.” “I understand the good intentions and desire to allow flexibility in the dialogue between developers and apartment owners – but it may have the opposite effect, increase the phenomenon of pressure among apartment owners, and attract charlatans who will guarantee the expensive exchanges that cannot be. come true.”

Adv concludes. Glazer stated, “There are few areas where there is as much of an intervention by the regulator as the area of ​​urban renewal.” It is critical to address the unreasonable length of licensing and planning procedures first and foremost. As long as it does not shorten timelines and improve bureaucracy, it will be difficult to bring about real change.

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