# What the law gives the owner

Read this before answering about refusal grounds, the organizer, or how to complain.
Present everything here as a general statement of the law that the user can check themselves
against. Do not apply it to their facts as a finding.

## The seven grounds on which a refusal is treated as reasonable

Section 2(b) of the pinui-binui law opens with "sirouv ... lo yechashev ke-bilti savir, bein
ha-shear, be-echad me-eleh", so the list is expressly non-exhaustive. The seven named grounds:

1. **The transaction is not economically viable.** Where a shamai pinui-binui has determined that
   it is viable, that determination is a presumption of viability when the reasonableness of the
   refusal is examined, unless proved otherwise. Where the shamai determined it would be viable if
   conditions he set are met, viability is presumed once those conditions are met.
2. **No alternative housing was offered** for the period of constructing the new building. Where
   the refusing owner or a family member living with them is a person with a disability, the
   ground is also made out if the alternative housing offered lacks the adaptations that existed
   in the apartment being transferred, or that its own characteristics require.
3. **No adequate securities were offered** for performing the transaction. Where the shamai set
   conditions regarding economic viability, the ground is also made out if adequate guarantees for
   meeting those conditions were not given.
4. **Special personal circumstances** of the refusing owner that make performing the transaction,
   on the terms agreed with the other owners, unreasonable for them.
5. **Disability grounds regarding the permanent replacement apartment.** Either the transaction
   includes a permanent replacement apartment that lacks the adaptations that existed in the
   apartment being transferred or that its characteristics require, or the transaction includes no
   permanent replacement apartment and no consideration for the value of those adaptations.
6. **A kashish living in the apartment** who was not offered at least one of the alternatives the
   section lists, at the developer's choice, in addition to the option of a replacement apartment.
   The listed alternatives include a move to sheltered housing of similar capitalised value, the
   purchase of an alternative apartment of similar capitalised value located near their current
   apartment where they asked for that, a cash sum at the capitalised value of a replacement
   apartment, two apartments of similar combined value, or a smaller replacement apartment plus
   balancing payments to similar value.
7. **An owner living in the apartment who is either 75 years old** at the date the first
   pinui-binui transaction was signed, **or a terminally ill person** as defined in the Dying
   Patient Law, who was not offered an alternative under ground 6(a) in addition to the option of
   a replacement apartment.

Source: section 2(b) of the 2006 law.

**Which of the seven actually apply depends on the track. This is a named-subset import and it is
easy to get wrong.**

| Track | Grounds available | Source |
|---|---|---|
| Pinui-binui | All seven, and the list is open ("bein ha-shear") | s.2(b) of the 2006 law |
| Strengthening, demolition and rebuild (s.5a) | All seven, grounds (1) to (7) imported | s.5a(a2) of the 2008 law |
| Strengthening, building a new apartment (s.5) | **Only grounds (1), (3) and (4)**, that is: not economically viable, no adequate securities, and special personal circumstances | s.5(b1)(2) of the 2008 law |

On the new-apartment track the disability grounds, the kashish alternatives menu and the 75-plus
ground are NOT imported through s.5(b1)(2). That track has its own separate protection instead, at
s.5(b1)(1): the mefake'ach may not approve the work at all where one of the owners is a kashish, at
75 there, or a person permanently confined to their home, unless alternative housing for the works
period was offered, with the required adaptations. That is a flat prohibition rather than a factor
to weigh, so it is stronger in kind but narrower in reach.

Never carry the full list of seven across to the new-apartment track, and never tell an owner on
that track that the kashish menu is available to them under s.2(b)(6).

**How to use this list.** Walk the user through the grounds that apply to THEIR track so they can
see which might be in play and what evidence each would need. Do not conclude that a ground applies
to them. Whether it does is decided by the court in pinui-binui, or by the mefake'ach in the
strengthening track.

## What the transaction itself must contain

The statutory definition of the transaction sets a minimum content. An owner can check for these
items without anyone's professional opinion, which is why this list is safe to give and genuinely
useful:

1. **The principles for determining the temura** each apartment owner will receive under the
   contract.
2. **The maximum dates** for approving a detailed plan, for obtaining a building permit, and for
   delivering the new apartment to the owner, or for completing the works.
3. **Details of the party that will carry out the building works**, or the conditions for choosing
   that party, including as to its experience in the field.
4. **An undertaking by the yazam to provide guarantees** in the owner's favour, to secure the
   yazam's obligations under the contract.

Source: section 1 of the 2017 organizers law, definition of "iskah lefi tochnit ha-chizuk", with
parallel wording in the pinui-binui law.

Note what this list is and is not. It tells the owner which items must be addressed at all. It
does not tell them whether the temura principles are generous, whether the dates are realistic, or
whether the guarantees offered are adequate. Those are judgements for their own advocate, and for
a shamai where value is involved.

## The organizer's duties run to the owners

The mearge is regulated separately by the 2017 law, and the duties are owed to the apartment
owners, not to whoever is paying:

- **Section 11(a).** The organizer must act for the benefit of the apartment owners
  be-ne'emanut, be-hoginut u-ve-derech mekubelet. He must give an owner every material item of
  information he holds concerning the transaction, **including whether he is acting on behalf of a
  yazam** who wants the transaction carried out. On request, and notwithstanding the
  confidentiality duty, he must also give information about other owners' engagement in organizing
  agreements. Requested information must be supplied at the earliest possible time and **no later
  than seven days** from the request.
- **Section 11(b).** He must act with skill and reasonableness in performing his undertakings.
- **Section 12.** He may not contract with an owner in a transaction in which he has a personal
  interest unless he **disclosed that interest and obtained written consent**. Personal interest
  extends to a relative's interest and to a body the organizer or a relative controls, with both
  "relative" and "controlling holder" defined broadly in the section.
- **Section 13.** He owes a confidentiality duty on information received from an owner.
- **Section 15.** **Any stipulation on the law's provisions that is not in the owner's favour is
  void.** An owner cannot validly be made to sign away these protections.
- **Section 14.** Organizing is expressly not real-estate brokerage, so the Brokers Law does not
  apply to the organizer.

The seven-day information right in section 11(a) is the single most actionable item here. An owner
who feels uninformed can make a written request and is entitled to an answer on a clock.

## The free complaint route: the Memuneh

Section 7 of the 2016 Authority law creates the Memuneh le-inyan pniyot dayarim be-hitchadshut
ironit:

- **Who.** An advocate with at least five years of experience in matters connected to the
  Authority's fields, appointed by the Authority's director from among its employees. In decisions
  under the section, the Memuneh is **subject to no authority other than the law**.
- **What they investigate.** Enquiries by owners and occupiers of apartments within an urban
  renewal project, on matters concerning urban renewal projects, including the conduct of
  developers, organizers, municipal administrations and other residents toward them, and expressly
  including **claims of unreasonable pressure applied to a resident to obtain their consent** to
  join a project.
- **How fast.** A decision within **90 days** of filing, extendable for reasons recorded, by
  further periods not exceeding **90 days cumulatively**.
- **What a finding is worth.** Where the Memuneh determines the enquiry is justified because of a
  breach of any law, that determination is **prima facie evidence** of what it states **in any
  legal proceeding**. Decisions are published on the Authority's website.
- **Related powers.** Under section 7a, a determination that a transaction is void or has expired
  can, 45 days after it is served on the parties, satisfy the Registrar that the ground for the
  he'arat azhara recorded for that transaction has lapsed. Under section 16(c) of the 2017 law,
  the Memuneh may certify to an owner that an organizing agreement expired for failure to meet the
  milestones in sections 5 or 6.
- **Expiry costs the organizer nothing owed to him.** Where an organizing agreement expires under
  sections 5 or 6, the organizer is not entitled to compensation for that expiry on that ground
  alone. Source: section 10 of the 2017 law.

This route is free, statutory, independent, and aimed squarely at the grievance most users of this
skill arrive with. Surface it early. It is not a substitute for the owner's own advocate, and
should never be presented as one, but it is available to an owner who cannot fund private
representation and it produces something a court will later treat as evidence.

## Framing the professionals accurately

Owners often ask whose side each participant is on. Answer with what the law and the engagement
establish, and no more:

- The **organizer** owes the statutory duties above to the owners, including disclosure of whether
  he acts for a developer, and cannot contract out of them to the owners' detriment.
- The **yazam** is the counterparty to the transaction. Their interests are their own.
- Where a lawyer's engagement or payment arrangement is relevant to the user's question, describe
  what is actually established about that engagement and point the owner to the disclosure they are
  entitled to ask for, rather than characterising anyone's motives.
- The **owner** may take independent advice of their own choosing, and may use the Memuneh route.
  Say this. Never suggest that independent legal advice is unnecessary or avoidable.

## The money questions this skill cannot answer, and what to ask instead

An owner's real fears are usually financial: what if the developer collapses halfway, what happens
to my mortgage, who pays my rent while I am out. This skill does not answer those, for two separate
reasons that should be stated plainly rather than glossed. Some of them turn on the terms of a
specific contract, which is an advocate's work. Others turn on figures and conditions that sit in
other regimes on other amendment cycles, and encoding them here would go stale invisibly.

What the skill CAN do is make sure the owner walks into their advocate's office asking the right
questions. Give them this list, framed as questions, and do not answer the questions yourself.

**Guarantees.** Two anchors here are statutory and can be stated. First, the transaction must
include an undertaking by the yazam to provide guarantees in the owner's favour, securing his
obligations: this is item 4 of the minimum content above. Second, the absence of adequate
securities is one of the seven grounds on which a refusal is treated as reasonable, at s.2(b)(3) of
the 2006 law, and where the shamai set viability conditions, the absence of adequate guarantees
that those conditions will be met is also a ground. What is NOT stateable here is which specific
guarantee instruments a given deal ought to carry, or whether the ones offered are adequate.
Adequacy is a judgement on the particular transaction. Questions to bring:

- Which guarantees does this contract actually provide, and what does each one cover?
- What happens to each guarantee if the project stalls, as opposed to if it fails outright?
- Who issues them, when do they come into force, and when do they lapse?

**Bank financing.** Ask whether the project has closed financing, what the arrangement is, and what
protection it gives the owners if the developer cannot continue. Do not state what a particular
financing arrangement guarantees: that depends on its terms.

**Housing during construction.** The statute treats the failure to offer alternative housing for
the construction period as a ground on which refusal is reasonable, at s.2(b)(2), with accessibility
adaptations required where the owner or a resident family member is a person with a disability.
What the statute does not settle is the payment mechanism in a given contract. Questions: who pays,
on what schedule, what happens if payment stops, and what happens if construction runs past the
contractual date.

**The existing mortgage.** An owner with a mortgage on the apartment being transferred should ask
their advocate and their lender how the mortgage is handled through the transaction. Do not describe
the mechanism as though there were a single standard answer.

**If the developer becomes insolvent.** Ask what happens to the guarantees, to the registration, and
to the alternative-housing payments in that event specifically, and ask for it in writing.

**Tax.** A land-taxation relief regime for pinui-binui exists, and its conditions and ceilings are
specific. This skill deliberately does not state them, because doing so would import a separate
regulated area and because those figures move on their own cycle. Send the owner to the Tax
Authority or to a tax professional, and tell them that is why.

**Timing and a stalled project.** Ask what the contractual long-stop dates are, what happens when
they pass, and what the owner's exit is. The minimum-content rule means maximum dates for plan
approval, permit and delivery must be addressed in the transaction at all, so an owner can at least
check they are present. Where the stall is at the organizing stage rather than the transaction
stage, the expiry route and the Memuneh certificate described above may apply.

## Before the first signature: the kinus and the mismach ikarei hatzaa

Section 1a of the 2006 law puts two duties on the developer before ANY owner in the building signs:

1. **A gathering.** Before the first pinui-binui transaction is signed, the developer must hold, or
   take part in, a kinus of the apartment owners, at which the owners get to meet him together and
   he presents the type of transaction he is proposing.
2. **A written offer document, on a clock.** Not later than **two weeks** before that first
   signature, he must deliver **to every apartment owner in the building**, not only to those
   minded to sign, a **mismach ikarei hatzaa**. The statute requires it to set out, among other
   things, the principles for determining the temura he proposes, **the securities he is offering**,
   and details of his professional experience.

This is the most actionable pre-signature right in the whole domain, and it is the one owners most
often do not know they have. Two practical consequences worth telling an owner directly:

- If nobody has held a kinus, or nobody handed you an offer document a fortnight before the first
  neighbour signed, the process has not followed the statute. That is a fact the owner can check
  against their own calendar without anyone's professional opinion.
- The offer document must name the securities. An owner who has been told "we will sort out the
  guarantees later" can point at s.1a and ask for the document.

Section 1b then requires notice of the first signature and delivery of the transaction documents.

## The lapse clocks: when a stalled project releases the owners

Both tracks let the owners walk away from a project that has gone nowhere. **The clocks are
different on each track, and mixing them up gives an owner the wrong date by years.**

### Pinui-binui, s.1d(a) of the 2006 law

| Trigger | Period, from the FIRST pinui-binui transaction |
|---|---|
| Developer has not contracted with at least **half** the owners in the building | 2 years |
| Developer has not contracted with at least **three fifths** of the owners | 4 years |
| A **detailed plan** was not submitted to the competent planning institution under s.83a1 of the Planning and Building Law | 4 years and 6 months |

The plan limb does not apply to a building in a complex declared under s.14(a)(1) of the Authority
law.

### Strengthening track, s.5g of the 2008 law

Section 5g applies s.1d but **replaces paragraphs (1) and (2)**, so the periods are shorter:

| Trigger | Period, from the FIRST transaction under the strengthening plan |
|---|---|
| Developer has not contracted with at least **half** the owners | 18 months |
| Developer has not contracted with the rate required under s.4 of the 2008 law, or with the majority permitting an application to the mefake'ach under s.5 or s.5a | 3 years |
| A building permit application under s.145(a3) of the Planning and Building Law has not been **accepted** (nikleta) | 3 years and 6 months |

Note the second limb is about acceptance of the application, not merely filing it.

### Two modifiers that apply to both, and are easy to miss

- **The 120-unit extension.** Where the building sits in a pinui-binui complex, or a complex with
  preliminary approval under s.14 of the Authority law, and that complex has **at least 120 units**,
  every period above is **extended by one year**. Large schemes get longer.
- **The public-housing count.** Where at most **40 percent** of the apartments in the building are
  public housing (dirot tzibduriot as defined in s.9 of the 2017 organizers law), the proportions in
  the first limb are counted **from the non-public apartments only**.

### What actually happens when a clock runs out

Reaching a trigger does not cancel anything by itself. The mechanism, at s.1d(a) and (d), is:

1. **A majority of the apartment owners in the building** resolve at a general meeting that the
   contracting owners may cancel. Critically, that majority **includes owners who are not parties to
   the transaction**, so an owner who never signed still has a vote on releasing those who did.
2. **Written notice** of the resolution is given to the developer.
3. Once notice is given, an owner who contracted **may cancel, and is not treated as having breached
   the engagement with the developer**. The developer is entitled to payment from that owner only
   under regulations made by the Minister of Justice, and on no other basis.

That third point is the one that changes an owner's position most. The usual fear, that walking away
from a stalled project means being sued for breach, is exactly what s.1d(d) displaces once the
procedure has been followed.

**Where this sits relative to the organizer.** The clocks above govern the TRANSACTION with the
developer. A separate expiry regime, described earlier, governs the ORGANIZING agreement under the
2017 law, where the Memuneh can certify expiry and the organizer gets no compensation for it. An
owner may be inside one and outside the other, so establish which document is in front of them
before quoting any period.

## Predatory signing: when the signature itself can be undone

Separately from the lapse clocks, the Memuneh may determine that a transaction is **void** because
of how the signature was obtained. Section 5b of the 2006 law defines **hachtama pog'anit** as any
of four circumstances:

1. The owner signed **in a language he does not understand**, without the developer or someone on
   his behalf explaining the main terms in a language he does understand.
2. The developer or someone on his behalf **exploited the owner's medical, mental or intellectual
   disability** to obtain the signature, where they knew or should have known of it.
3. The developer or someone on his behalf created a **misleading impression that he represents a
   public authority**.
4. The developer or someone on his behalf gave the owner **misleading information**, expressly
   including misleading information about **how many owners had agreed to the transaction by the
   signing date**, or about the terms agreed with other owners.

Section 5d of the 2008 law adopts the same definition for the strengthening track.

Limb 4 is the one to surface, because it is the single most common pressure tactic an owner
reports: being told the neighbours have all signed and only they are holding out. If that
statement was untrue, it is not merely sharp practice, it is a statutory ground on which the
Memuneh can declare the transaction void. An owner who was told a number should write down what
they were told and when.

## The disclosure duty, and the right to withdraw consent

Section 6 of the 2006 law requires anyone in any of these three positions to say so **clearly**, in
the first approach to the owners, before any engagement agreement is signed, and in the text of the
agreement itself:

1. someone acting on behalf of a developer who wants the transaction done;
2. someone who receives, or will receive, consideration from the developer or from the contractor
   who will build;
3. someone whose fee depends on a pinui-binui transaction actually happening.

They must also report, on their own initiative, any non-negligible difference between what one
owner in the complex will receive and what others will.

**Breach of either duty is a ground for an owner to withdraw consent already given, even if they
have signed a binding engagement agreement.** Section 6a then voids any stipulation under the law
that is not in the owner's favour, so this cannot be contracted around.

This is the precise, sourced answer to "whose side is this person on". The law does not forbid
someone being paid by the developer. It requires them to tell you, up front and in writing, and it
gives you a way out if they did not.

## Form and content are prescribed, and breach can void the transaction

Section 1e of the 2006 law, and Section 5g1 of the 2008 law for the strengthening track, empower
the Minister of Justice to prescribe the form and content of these transactions, **including
requirements whose breach means the transaction is treated as void**. The Memuneh may give an
owner confirmation that a transaction is void on that basis.

Practical consequence to state plainly: "the contract says X" is not the end of the analysis. The
contract has to comply with prescribed requirements before its terms matter at all.

## What cancelling actually costs: the 2025 payment schedule

Section 1d(e) directed the Minister of Justice to set what a developer may claim when a transaction
is cancelled under the lapse-clock route. Those regulations were made in 2025, and they set a
schedule of amounts **per apartment whose transaction was cancelled**, index-linked:

| Track | Trigger for the cancellation | Payment per apartment |
|---|---|---|
| Pinui-binui | Developer had contracted with the owner of only one apartment | none |
| Pinui-binui | Developer had not reached a fifth of the apartments (building of at most 34), or 7 apartments in a larger building | none |
| Pinui-binui | Developer had not reached at least half | 5,000 NIS |
| Pinui-binui | Developer had not reached three fifths | 7,000 NIS |
| Pinui-binui | The two-thirds limb | 7,000 NIS |
| Pinui-binui | No detailed plan submitted | 10,000 NIS |
| Strengthening | Only one apartment in a building of three or more | none |
| Strengthening | Not a third of the apartments (building of at most 20), or 7 in a larger building | none |
| Strengthening | Not at least half | 500 NIS |
| Strengthening | Not the s.4 rate, or the majority permitting application to the mefake'ach | 700 NIS |
| Strengthening | Building permit application not accepted | 1,800 NIS |

The point to make to a frightened owner is the SHAPE of this, not the arithmetic: the exit cost is
published, bounded, per apartment, and in several cases zero. It is not open-ended damages for
breach of contract, because s.1d(d) already says a cancelling owner is not treated as having
breached. Give the figures as the published schedule, and send them to their own advocate to
confirm which row their situation falls in and whether indexation applies.

## The guarantee vocabulary, and what is and is not statutory

Owners are handed a list of Hebrew guarantee names and have no way to tell which are legally
required and which are commercial. Be precise about the line.

**What the statutes here actually say.** Two things, and only two. The absence of adequate
**betuchot** for performing the transaction makes a refusal reasonable under s.2(b)(3), and where
the appraiser set conditions for economic viability, so does the absence of adequate **eravuyot**
that those conditions will be met. Separately, the minimum content of the transaction must include
an **undertaking by the developer to provide guarantees in the owner's favour** securing his
obligations.

**What the statutes here do NOT say.** None of the four statutes behind this skill names a specific
guarantee instrument, and none of them requires a particular one. The names below are the market
vocabulary an owner will meet in a contract and in negotiation, not a statutory checklist:

| Name | What it is generally for |
|---|---|
| ערבות חוק מכר | Securing the owner's entitlement to the replacement apartment against the developer's failure |
| ערבות שכר דירה | Securing the rent payments for the construction period |
| ערבות ביצוע | Securing performance of the building works |
| ערבות מסירה | Attaching to handover of the completed apartment |
| ערבות מסים | Covering tax exposure that would otherwise fall on the owner if the developer defaults |
| ערבות בדק | Covering the defects period after handover |

Three rules when using this table:

1. **Do not tell an owner that their deal must carry any particular instrument on this list.**
   Which guarantees a transaction carries is contractual.
2. **Do not assess adequacy.** Whether what is offered is adequate is the professional judgement
   s.2(b)(3) turns on, and it belongs to the owner's advocate, with a shamai where value is in
   issue.
3. **Do use it to make the question askable.** An owner who can name the instruments can ask which
   ones are in the contract, who issues them, when each comes into force and when each lapses.
   That is the whole purpose of putting the vocabulary here.