Great news for apartment owners caught in a never-ending urban renewal project: a recent legislative amendment now enables apartment owners in all types of urban renewal deals to cancel agreements if the project fails to progress according to the legally established timeline.
Whether it's a building clearance or a building renewal (TMA 38 and its alternatives), apartment owners will no longer be tied to transactions that experience unreasonable delays. According to the amendment, a majority of apartment owners in a building, even those who haven't signed a transaction, can vote to cancel agreements with developers who fail to meet specific deadlines set by law.
These deadlines include signing transactions with a certain majority of apartment owners within the timeframes specified by law, progressing the project according to schedule, submitting a construction evacuation plan to planning authorities, or obtaining a building permit within the legally mandated timeframe.
This amendment allows apartment owners to cancel TMA 38 transactions if the developer fails to reach a majority of 50% of apartment owners within 18 months from the initial transaction's signing date, or a majority of 67% within 36 months. Additionally, apartment owners can cancel a transaction if the developer fails to submit a permit application to the planning institution within 42 months of the initial transaction.
For eviction transactions, cancellation is possible if the developer doesn't achieve a majority of 50% among apartment owners within 24 months from the initial transaction's signing date, or a majority of 60% within 48 months.
Furthermore, the apartment owner can cancel the deal if the developer fails to submit a building evacuation plan to the planning institution within 54 months from the initial deal's signing date.
If an apartment owner cancels their contract under these circumstances, with the majority of apartment owners' decision in a general meeting and proper notification to the developer, they will not be considered in breach of the agreement. However, the developer is entitled to receive a payment determined by the Minister of Justice.
Are you dealing with a stagnant project that shows no signs of progress?
The Governmental Urban Renewal Authority urges apartment owners who are entangled in long-stalled projects and wish to exercise their right to cancel under the law to seek guidance and assistance from municipal administrations or the Governmental Authority itself.
Elazar Bamberger, director-general of the Governmental Urban Renewal Authority, stated, "As part of the legislative package presented to the Knesset for approval in the Arrangements Law, we have established a unique arrangement to provide a solution for apartment owners trapped in binding contractual agreements with developers who have failed to progress the project over the years, and in some cases haven't even made an effort to do so. The ability to cancel such engagements allows apartment owners to explore other developers for their urban renewal needs. We encourage those facing such predicaments to take advantage of this legislation, which is now in full effect, and to seek assistance from us and municipal administrations if necessary."