New law gives homebuyers more leverage with builders

A new consumer protection law for the housing industry passed today in the Knesset. Contractors must publish a detailed price list of the main fixtures and specifications in apartments under construction. The law, an amendment to sale laws, states homebuyers will now be able to request changes to the specification during a period of up to six months after the end of the foundation stage. Buyers who would want to install other items or less electric points etc will receive refunds based on the contractors' price lists. Up to now, the pricing of kitchens, floors, bathroom fixtures and others worth hundreds of thousands of shekels was vague, and solely in the hands of developers and contractors as 'gifts' to lure buyers, after this law takes effect buyers can now put a price tag on those extras, sometimes made compulsory by the developer to increase profits from deals with his suppliers.

Earthquake retrofit regulation to accelerate renovation

It will now be possible to add 2.5 additional floors to buildings as part of National Outline Plan 38 or Tama 38 (allowing retrofitting of existing structures to make them earthquake-proof in exchange for additional building rights), after the ministerial committee for internal affairs and services today approved the third amendment to the plan. The National Planning and Building Commission approved the amendment three weeks ago.

Under the amendment, it will be possible to add up to 2.5 floors to existing buildings retrofitted to withstand earthquakes, and obtain building rights to another lot in exchange for the retrofit. The amendment originally allowed the addition of 2.5 floors to buildings in poor areas only, and 1.5 floors in wealthy neighborhoods. But following the recommendation of the investigator who heard the objections to the amendment, the government decided to apply the new rules uniformly nationwide.

The Ministry of Interior says that the amendment will further encourage the renovation of old buildings.

Source Globes

Housing Reform approved by the Knesset

The Israeli cabinet this past week unanimously approved the housing chapter of the Trajtenberg Report, eight months after the recommendations were submitted. The recommendations seek to respond to demands for affordable housing in last summer's social protest.

The reforms which were passed by the Knesset will basically seek to get more housing stock into the marketplace by doubling the property taxes on a variety of properties that sit vacant for extended periods of time. The social protests of last summer, brought to light the fact that there are a lot of vacant apartments and abandoned buildings in Israel's large cities. Some of these properties are vacant because foreign owners only use the apartments a few weeks per year. These apartments have been referred to as "ghost apartments".

To bring "ghost apartments" on to the market, the property tax ceiling on apartments that stand empty for over six months a year will be doubled. The government estimates that this measure will add to the market 15,000 apartments a year in high demand areas.As for apartments deemed unfit to live in, the exemption on the property will be valid for only nine months, after which the double property tax will be levied on apartments that are not renovated. Hopefully, this will provide some incentive for building and apartment owners to "get busy" with renovations and get the property to market.

Lastly, to prevent contractors who win tenders from delaying in building, a levy of up to 10% of the price of the apartments built will be imposed for not completing construction projects within two years from the receipt of the building permit.

Source Globes