Real Property and Real Estate
Question:
What is a Real Property Registry Extract?
Answer:
A real property registry extract is an official document issued by the state which details all of the rights and obligations regarding a parcel of real property, or a part thereof, as part of the registration of real property rights with the Real Property Registry Offices, and includes, among others, the identity of the owner, the identity of the lessees, recorded mortgages and other notes such as attachments, liens and more.
Any person can receive a real property registry extract via the internet and in any Real Property Registry Office, subject to payment of the required fee.
Question:
How do I check the ownership of a particular piece of property?
Answer:
Be means of the issuance of a real property registry extract either via the internet or in any Real Property Registry Office, subject to payment of the required fee
Question:
What is the definition of the term “lease”?
Answer:
A lease is actually a rental the period of which exceeds five years, and a rental agreement for a period exceeding 25 years called a “perpetual lease”, so that in essence it is similar to ordinary ownership. The utilization of this right is very common with lands owned by the Israel Lands Administration.
Question:
What is the role of the Israel Lands Administration?
Answer:
The Israel Lands Administration is an entity which operates according to the Basic Law (which is a law of a higher status than an ordinary law) and its role is to manage state lands. The Administration manages the following types of land: Land owned by the State of Israel, the land owned by the Jewish National Fund and Development Authority lands. In practice, the Administration manages 93 percent of the State of Israel’s lands, constituting approximately 22 million acres.
Purchase of land from the Administration is accomplished in one of the following ways:
1. By signing a “Development Contract” with the Administration, whereby a person undertakes to build on and improve the land.
2. Way of signing a “lease contract”, which is the case with everyone who gets “ownership” of the property already built on Administration land.
Question:
What is a condominium?
Answer:
A building with two or more apartments which is registered in the Condominium Registry which is part of the Real Property Registry. The entity which manages the common property of the tenants (stairwells, elevators, gyms and pools) is condominium representatives, better known as “the condominium committee.” Each tenant is responsible for covering their share of the expenses, relative to their share of area of common property. Management of the condominium is governed by bylaws which constitute a kind of agreement between the owners of apartments in the condominium.
Question:
What is special about a gift contract for an apartment/lot/house?
Answer:
A gift agreement is a contract whereby X gives Y something without receiving any consideration in return. This is common especially amongst family members (i.e. the grandfather gives his grandchild an apartment as a gift, etc.). A gift contract must be in writing. There are significant tax benefits to be derived from gift agreements.
Question:
What are housing companies?
Answer:
A housing company is a contracting company which holds permits from the Housing Office to manager registration of rights in residential properties until the end of the parceling process (detailed listing of the apartments in the Real Property Registry).
Question:
What is capital gains tax?
Answer:
Capital gains tax is a tax on real property for the increase in value of the property which is the difference between the purchase price and the sale price. There are certain waivers of capital gains tax, the most common being: Single residential dwelling exemption credits, “4 years” exemptions and more. Bureau of Land Taxation forms involve many pitfalls and it is very important to complete forms with the help of an expert in the field. Note that the improperly filling out the form or selecting a particular exemption may cause great harm to the seller.
Question:
What is a betterment levy?
Answer:
A betterment levy is a charge levied on real property (both owned and leased in perpetuity) by the local authority (municipality) in respect of approval of a plan, relief authorization or permit for exceptional use (variance) by the Local Zoning Board which improved the property and raised its value. It is common practice in the course of a deal to sell property to negotiate between the buyer and the seller who will bear the costs of paying the levy. The levy equals half of the increase in value of the property. Note that there is a right to appeal the amount of the levy.
Question:
What is the purchase/acquisition tax?
Answer:
Purchase tax is a tax levied on real property according to statutorily set rates. The tax is fixed based on a sliding scale linked to set amounts, meaning that a certain tax rate will apply up to a certain amount, and a higher tax rate will apply to any part of the purchase price in excess of that amount. The tax rate is updated every year on January 16.
Question:
Do new immigrants enjoy any discounts on real property tax?
Answer:
Yes, a new immigrant purchasing real property in Israel is entitled to a tax discount according to the law for purchases below a certain amount. It is therefore recommended to discuss taking advantage of new immigrant benefits regarding purchase tax with an experience attorney [החלק הממורקר זו תוספת שלי – עמנואל].
Question:
What is a combination contract?
Answer:
A combination agreement is an agreement in which the owner of the land enters into a contract with a contractor. In practice, the contractor builds apartments at his expense after which each of the parties receives apartments, as agreed between them in the contract. The owner of the land receives building/contractor services and the contractor receives from the owner a section of the real property.
Question:
How is a real property partnership dissolved?
Answer:
Dissolution of a partnership in land is filed with the court wherein the land is located by one of the owners of the property. The court will order, usually, the dissolution of the partnership. Liquidation will be carried out by division in kind (which requires the consent of the local governmental authority). If the land cannot be divided by way of a distribution in kind or registering the property as a condominium, the court shall order the sale of the property and distribution of the proceeds. Note that there are many restrictions and conditions in the law relating to such dissolutions.
Question:
What is important to include in an agreement for the sale of an apartment?
Answer:
The most important question for the seller is whether the buyer can finance the deal? Many buyers are negotiating with landlords when they “think” the bank will give them a mortgage sufficient to purchase the apartment. An additional point that requires attention is the tax which will be imposed on the sale of the apartment. It is possible that a particular buyer will choose not to sell his apartment because of a high capital gains tax assessment. As such, the purchaser must examine to what capital gains tax exemption he or she is entitled, if at all. Likewise, the parties must give their opinions regarding the payment of betterment levy – if any.
Question:
What is important to include in an agreement for the purchase of an apartment?
Answer:
First, check whom the land belongs, of course, if it what is at stake is a new apartment from a contractor, check whether the contractor’s rights in the land.
However, you must check whether the land has been mortgaged to banks or other creditors. In the case of buying a new apartment from a contractor, the apartment and the building must be planned in accordance with the specifications (in case of purchase “on paper”), and its surroundings according to local zoning plans.
Regarding second hand apartments, one must note changes in the construction and possibly even check the building permit with the local governmental authority.
The agreements tax provisions must be clear and accurate regarding who pays what, whether money is to be held in trust and more.
However, the key delivery date is the most important date for the purchaser of the apartment and therefore it is necessary to ensure that the contractor/seller will be able to meet their obligations. With new apartments, it is necessary to check on the registration of the apartment in the Real Property Registry – parceling.
Question:
Why should I go to an attorney in order to draft a rental agreement for an apartment?
Answer:
Many tend to think that signing a standard lease agreement, which is often sold in stationery stores or distributed online, serves to insure all parties – but the reality is completely different. The landlord’s point of view is ensuring everything related to receipt of the rent in full and on time, maintenance of the property by the renter and the restoration of property as received as of the date of termination of the lease. At the same time, the person renting the apartment desires to use the apartment according to his needs and without interruption, enjoy the use of land and personal property and to ensure his rights with regard to any option. However, there are special arrangements between a tenant and a landlord in which the renter engages in remodeling, or a renter who wishes to sell the apartment together with the tenant, etc. Entering into an agreement to lease an apartment that is not clear and complete regarding all concerns of the parties may result in the sides being dragged into disputes and other unpleasantness such as legal claims, eviction from the apartment, and collection procedures. Before signing the apartment rental is recommended to consult with an expert in real estate law to avoid unpleasantness and legal proceedings.