Jerusalem Jewelry Store Eviction Case Settled for Over $350,000
A Jerusalem court has ruled that the state must pay 1.37 million shekels (approximately $365,000) to evict a protected tenant from a jewelry store on Jaffa Road, ending a legal dispute that began in the 1970s. The case centered on a unique arrangement established by the original protected tenant, Eliyahu Dror, who was a victim of a terror attack. Dror had agreed with Hadassah, the hospital organization that then owned the building, to sublet the entire store to others and share the profits with the landlord. Since 1992, the Elbaz brothers have operated their long-standing "Moreia Jewelry" business from the premises.
The situation became complicated in 2023 when Dror passed away and ownership of the property transferred to the state following a recovery arrangement with Hadassah. Dror's widow, Sarah Dror, initially received written confirmation from Hadassah recognizing her as the successor protected tenant. However, Hadassah soon transferred its property management responsibilities to the state.
According to the court's findings, Sarah Dror made numerous attempts over 20 months to contact state representatives to arrange continued tenancy and payment details, but received no response. Meanwhile, the Elbaz brothers continued to deposit rent payments into a separate account designated for the state. In March 2024, the state finally contacted Sarah Dror, demanding she operate the business herself within 21 days or forfeit her protected tenant status.
In response, Sarah Dror initiated proceedings to transfer her protected tenancy rights to the Elbaz brothers for a key money payment of 3.4 million shekels, to be split with the state. The state rejected this, arguing Sarah Dror never held a valid protected tenancy and sued for the eviction of both Sarah Dror and the Elbaz brothers.
The court rejected the state's claim that the protected tenancy never existed, ruling that Sarah Dror legally inherited her husband's status by continuing the same subletting arrangement with the former landlord's consent. The judge determined the violation occurred on June 30, 2024, when she continued subletting the entire property without new permission from the state, thus breaching the contract and the Protected Tenancy Law.
However, the court acknowledged the state's "policy of non-response" and the social purpose of the Protected Tenancy Law. Instead of unconditional eviction, the court ordered a conditional eviction, requiring the state to pay Sarah Dror 1,373,175 shekels by November 1, 2024, calculated based on her expected lifetime earnings from the property. If payment is not made on time, the conditional eviction will be canceled, and an alternative will be approved: the transfer of rights to the Elbaz brothers for the agreed-upon 3.4 million shekels in key money. The court also set the protected monthly rent at 1,459 shekels, rejecting the Elbaz brothers' request for a significantly lower nominal rent. No court costs were awarded to any party.
