Purchasing property especially in Israel is not an easy task. Along the way a purchaser is faced with many challenges, practices and dilemmas. One of those could be a building violation. A building violation is any part of the property which differs from the approved planning permission received. The most common form of building violation will be the closing in of a balcony or changing the car parking or storeroom into bedrooms (with an explanation that the whole building has done it). Some units have unused spaces behind apartments accessible only to one person, that person inevitably opens up the area and uses it for living space. This article aims to explain the consequences of purchasing property in Israel with building violations.
So what are the consequences of purchasing property with building violations?
1. Your Mortgage Appraisal.
The first practical consequence you may find is when you apply for a mortgage. When the banks appraiser evaluates the apartment he will not include any area in the property which does not have planning permission. For example a 100 sqm property with 20sqm building violation will be thought of as an 80 sqm property for the purposes of the appraisal. The mortgage bank will only grant you a percentage based on the value of an 80 sqm apartment. If you are flexible with the percentage of mortgage or are only taking a low percentage of mortgage this may not be such an important consequence for you.
2. Court- demolition order and fine.
The local municipality can file an indictment against an owner of a property with a building violation- whether built by the owner or a previous owner. The local municipality file an indictment as a result of a complaint received by a neighbour or they may initiate proceedings without having received any complaint. The result is a summons to the local court. The structure of such proceedings are similar to criminal cases. If it is proved a specific part of the building is illegal, the Judge may give a demolition order. Alternatively the Judge may be persuaded to give a suspended demolition order. This means the Judge will allow a set amount of time for the person to submit to the municipality a request for retroactive planning permission, which if granted and presented to the court will cancel the demolition order. In addition to a demolition or suspended demolition order the Judge in most cases will include a fine. In most cases the fine will be based on a square meter. In some cases the fine can be negotiable (this is Israel!!!)
So what is the role of the attorney?
An experienced attorney will know how to play the system properly, which can lead to an extension of demolition orders, a reduction of the fine. Needless to say there are numerous defences that may be cited in order to mitigate circumstances or prevent a demolition order.