Tel Aviv Magistrate’s Court recently ordered developers behind an urban renewal project in southern Tel Aviv to pay roughly NIS 650,000 to the man who organized it. Judge Ronen Ilan enforced an agreement calling for a fee equal to 2% of the project’s expected revenues, and rejected the developers’ claim that the deal was signed under threats.
The plaintiff, who provides business development services to real estate developers, said he organized the demolition-and-reconstruction project on Y.L. Peretz Street beginning in 2018. He said he connected the various apartment owners with the developers, worked for four years to persuade residents to join, and effectively made the project happen. He claimed the parties agreed he would receive 2% of expected revenues, but that he was paid only NIS 100,000.
The developers argued that he was really seeking broker’s fees even though he was not a licensed broker and did not qualify as the “efficient cause” of the deal. They also claimed any agreement to pay him arose only after he threatened to spread “lies and falsehoods,” making the consent invalid.
Judge Ilan rejected that version. He found the plaintiff acted as an “organizer,” not a broker, so the Real Estate Brokers Law did not apply. He also ruled that the parties knowingly reached a valid agreement for 2% of expected revenues, and that no threatening campaign was proven. A key piece of evidence was a text message in which the plaintiff asked the defendant to confirm his fee for “Y.L. Peretz 24-26” at “2% of the project’s sales,” and the reply was, “Approved.”
The court noted this was not the first business relationship between the sides, and said prior payments on earlier projects supported the claim that both understood he was entitled to compensation. The judge awarded him NIS 610,707 for his role in advancing a project whose value was estimated at tens of millions of shekels, plus NIS 41,669 in legal costs and attorney’s fees.
