Tel Aviv Ruling Sparks Debate Over Whether Bigger Flats Deserve Better Terms in Eviction-Construction Deals

A recent Tel Aviv District Court ruling by Judge Gilad Hess has stirred Israel’s urban renewal sector, with some calling it a breakthrough and others warning it could undermine the long-standing principle of equal compensation in evacuation and rebuilding projects. The dispute centers on a familiar question for apartment owners, whether a larger flat automatically entitles its owner to a larger replacement apartment or better terms.

Attorney Avraham Babjanov, who has represented apartment owners, representatives and developers in urban renewal projects for about 20 years, says the answer is not that simple. He argues that the ruling did not establish a blanket rule that bigger apartments always receive bigger compensation, and it did not abolish equal treatment. The key distinction, he says, is between the physical size of a unit and the property rights registered to it, especially its share in the common property. A larger apartment can exist without larger ownership rights, while in other cases a unit was originally built larger and does carry a bigger share.

Babjanov says the court’s case involved significant and relevant differences in property rights, where a uniform bonus for all owners could amount to formal equality rather than substantive equality. Even so, the court did not cancel the deal. Instead, it approved the transaction and ordered balancing payments to the owner who was found to be disadvantaged.

Babjanov criticizes the ruling itself as mistaken, saying it did not sufficiently account for existing industry tools that already address differences among owners, such as higher appraisal-based points that let owners of larger flats choose earlier. But he says the bigger problem is how the ruling is being interpreted. His advice to owners and developers is to avoid drawing conclusions from headlines and to examine the building’s property records, bylaws, land registry extract, and original construction before deciding whether unequal compensation is justified.