The quarrel continues over the amendment to the Sale Law. Following the complaints filed by developers about land tenders as part of a price per occupant, which explicitly stated that the linkages to the construction input index would be 100% of the apartment price, the Ministry of Housing issued a firm letter stating that their apartments would not be exempted from the law. . However, there are those in the Ministry of Justice who believe that although these apartments should not be exempted from the law, it is likely that the state will be forced to compensate the developers.
■ Competition Authority examines: Did the contractors coordinate prices?
■ Ministry of Justice against the historic change in the construction input index
Under the amendment to the Sale of Apartments Act that went into effect last week, developers can attach only 40% of the price of the apartment to the construction input index, and not 100% as it has been so far. This means that at the current rate of increase in the construction input index (about 6% per year), this could detract from the developers’ revenues of millions of shekels.
However, developers complained to the Ministries of Housing and Justice that the amendment to the law does not apply to price-per-tenant tenders published in the past and contained specific conditions for linking the price of dwellings to the construction input index. According to them, their profit margins on these lands are very low, while the state, Rami and the municipalities have caused construction delays in the area for several years.
In light of this, a number of developers have sought to exclude these projects from the new law, which should apply in the future and not retroactively. In a letter written by the director of senior marketing at the Ministry of Housing, Ariel Rosenberg to the Association of Builders of the Country, he rejects their claims. “Although, within the terms of the tender and the construction contracts, in the various housing marketing routes within reach, provisions were established that comply with the provisions of the law on the eve of the amendment, but with the entry into force of the amendment, the provisions of these laws prevail. In his letter.
He rejects the developers’ claims about retroactivity and the request to exclude the apartments and writes in the letter that “we would like to emphasize that according to the law, the available housing auctions on all marketing routes can not be excluded, and that in any case, the seller is required to comply with the law.” It should be noted that the determining date in relation to the applicability of the law is the date of signing the contract between seller and buyer of apartment, and the provisions of the law apply to all sales contracts signed after its entry into force. the apartment”.
Not to deviate from the law, but to compensate
However, not everyone is in agreement on this matter and the Ministry of Justice has a different opinion. Even before Rosenberg’s letter, Dr. Efi Tzemach wrote on the very same subject that this was an “important issue,” and that soon all the relevant factors in the Ministry of Justice and Housing would be discussed regarding the exception.
Globes has learned that one of the options emerging in the ministry to solve the problem is not to exclude the apartments, but to compensate the developers for changing the linkage mechanism.
The Ministry of Justice issued the following announcement on Tuesday: “Following inquiries to the Deputy Attorney General, Carmit Ulysses, regarding the Sale of Apartments Law and the linkage to the construction input index, this morning the Deputy held a legal hearing in which it was clarified that A contract that will be recognized after the law enters into force.
“Regarding the inquiries raised by the contractors regarding contracts signed between them and the Israel Land Authority before the law came into force, the issue will be discussed by the Ministry of Construction, Housing and the Israel Land Authority and the legal recommendation will be formulated by the Ministry of Justice.
“It was further clarified that this issue does not establish any reason to postpone the date of signing the contracts, or to claim that the Sale Law will not apply in relation to contracts to be signed with buyers in price-per-tenant or discount-price tenders.
Entrepreneurs are already delaying projects
The Ministry of Housing, as stated, takes a firm line, and denies the possibility of reaching one or another arrangement with the developers, other than the observance of the law as it stands. Following the approval of the law, the office received letters from entrepreneurs operating under the “price per occupant” framework, who acted unilaterally to delay signing purchase contracts with the buyers and tried, among other things, to hold on to Tzemach’s letter to wait for the contracts to be promoted. An entrepreneurial company operating in the periphery, for example, suddenly informed the ministry that it is not a project entrepreneur, but a “construction services provider”, and therefore it is not subject to the new provisions of the law. It was, of course, rejected outright, but the office is furious at the general line the entrepreneurs are taking. It is currently unclear whether the meeting on which Plant wrote will take place.
The ministry also rejects the contractors’ claims about the harm that the change in the linkage mechanism will cause them: ” Violation of the contract of sale, in order to continue to charge buyers an index of construction inputs after the contractual delivery date, “Rosenberg wrote, thus aiming for a significant lag in a number of price-per-tenant projects that have stalled. Contractors respond to this, that most of the projects got stuck through the fault of the state and local authorities, and not through their fault.
The big beneficiaries of the new arrangement
The big beneficiaries of the new arrangement are those who will benefit from discounted apartments in these projects. Entrepreneurs today own land as part of a “price per occupant” marketed by Remi on the condition of indexation from the date of receipt of a building permit. Those who win an apartment in these projects will receive particularly low prices, May their apartment become more expensive, because the index has not applied to them to date, and in addition they will receive the linkage benefit included in the amendment to the law.