6 key issues for Israeli real estate lawyers

Israeli real estate law is a complex and dynamic field that requires attorneys to be well-versed in various issues. It is well known that the largest single cause of legal malpractice is due to miscalculation of Israeli real estate taxes.

From land ownership and acquisition to zoning regulations and contractual obligations, attorneys must stay updated and knowledgeable to effectively represent their clients. In this article, we will explore six important issues for attorneys to know in Israeli real estate law.

1. Land ownership and acquisition:

Understanding the Israeli land ownership system is crucial for attorneys practicing real estate law. In Israel, most of the land is either owned by the state or administered by the Jewish National Fund (JNF). Private land ownership also exists but is subject to certain restrictions and regulations. There are church leases that can run for 99 years and affect all kinds of residents without their being fully aware. The Israel Land Registry (TABU) contains all kinds of liens and riders to land registration. Attorneys must navigate these complexities to ensure their clients have proper ownership rights, whether it be through lease agreements, property transactions, or joining housing cooperatives.

2. Zoning and planning regulations:

Zoning and planning regulations have a significant impact on real estate development projects. Attorneys need to be familiar with local and national zoning laws, as well as continual changes in zoning as new land is opened for development, and regulations to guide clients through obtaining building permits and complying with planning requirements. Changes in zoning laws can have a profound effect on the feasibility and profitability of a real estate project, making it essential for attorneys to stay updated on the latest developments.

3. Construction contracts and liabilities:

Attorneys handling real estate matters must have a thorough understanding of construction contracts and liabilities. They need to ensure that contracts are drafted to protect their clients’ interests and address issues such as project delays, defective construction, and disputes with contractors. Attorneys must also be knowledgeable about the legal framework surrounding construction defects, warranties, and the potential liabilities that may arise during the construction process.

4. Lease agreements and tenancy laws:

Lease agreements are a common aspect of real estate transactions, and attorneys must have a comprehensive understanding of tenancy laws in Israel. The relationship between a landlord and tenant is governed by specific regulations, including rent control laws that limit the increase in rental prices. Attorneys should provide legal advice to both landlords and tenants regarding their rights, obligations, and potential disputes that may arise during a lease term.

5. Real estate taxes, real estate finance and mortgages:

There are several types of real-estate related taxes that require expert calculation and negotiation with the Israel Tax Authority, including acquisition tax (Mas Rechisha), appreciation tax (Mas Shevach), and land improvement tax (Hetel Hashbacha). There are also discounts for new Olim and transfers between relatives.

In addition, attorneys practicing real estate law must be well-versed in the intricacies of real estate finance and mortgage transactions. They should understand the requirements for obtaining financing, structuring mortgage agreements, and advising clients on the implications of default or foreclosure. Additionally, attorneys need to ensure compliance with Israeli banking and securities regulations that govern real estate financing transactions.

6. Antiquities, historic preservation, and environmental regulations and due diligence:

Many sites in Israel are designated “antiquities” sites, possibly containing historical artifacts from before the year 1700, and such land must be registered as such. In addition, many buildings that predate the State of Israel require historic preservation permitting to preserve their distinctive character.

Environmental regulations play an increasingly significant role in real estate law, and attorneys must be aware of the potential environmental risks associated with a property. Conducting thorough due diligence to identify any environmental contamination issues is crucial to protect clients from potential liabilities. Attorneys should also assist clients in navigating the regulatory landscape and ensuring compliance with environmental laws and regulations.

In conclusion, attorneys practicing in Israeli real estate law face various challenges and need to stay updated on the latest developments in the field. Understanding land ownership, zoning regulations, construction contracts, tenancy laws, real estate finance, and environmental regulations are essential aspects for attorneys to effectively represent their clients in real estate transactions. By staying knowledgeable in these areas, attorneys can provide comprehensive and valuable legal advice to navigate the intricacies of Israeli real estate law.