Tel Aviv Court Rules Excess Building Rights Must Be Shared After Property Partnership Ends
A Tel Aviv Magistrate's Court recently addressed a unique legal dispute involving the dissolution of a joint property ownership in Ramat Gan, valued at approximately 12 million shekels. The land is co-owned equally by two partners, but the exact division of their shares is undefined. Decades ago, the defendants' predecessors built a 120-square-meter single-family home on the land. Due to a new urban plan, this house is slated for demolition, which would grant a planning "bonus" of two additional housing units valued at around 2.6 million shekels.
The legal question centered on how to allocate these excess building rights: whether the partner who constructed the house is entitled to all the additional rights or if they should be divided equally. The plaintiffs, represented by attorneys Yoram Hagbi Hagai and Meir Fox, argued that since the land is held in undivided shares and the building was erected without their consent, all building rights, including the bonus units, must be shared equally.
The defendants contended that the house was built publicly and with permits, served as their family home for 70 years without objection from the plaintiffs, and that this established an implicit agreement on usage rights. They claimed the bonus rights are uniquely tied to the existing building and thus belong solely to them to prevent the non-acting partner from receiving a financial windfall.
The court rejected the defendants' main argument, ruling that long-term exclusive use does not confer ownership rights but at most a personal license. The court emphasized that registered ownership rights in the land registry take precedence over claims based on construction. It concluded that no evidence showed a division of building rights beyond the partners' relative shares. Therefore, both the value of the existing building and the additional building rights from the demolition incentive must be split equally. The builder is entitled only to reimbursement of construction costs from the sale proceeds.
In response, attorney Aviahu Ben Moshe, representing the defendants, criticized the ruling as unfair, noting the family had legally built and maintained the home since 1954, while the co-owners living abroad had been inactive. He called the outcome absurd, as the property was undervalued compared to the construction costs, and vowed to continue legal efforts to overturn the decision.
