We often hear about an "opportunity" that came along for someone to purchase an apartment, which today is an apartment (with walls and windows and a water and electricity connection) but was once a warehouse. Sometimes "those in the know" even clarify that there is no concern in such a transaction, because the warehouse was converted into an apartment years ago. In any case, the new buyer of the "apartment" is not the one who carried out the illegal construction and conversion of the warehouse into an apartment, and therefore he has nothing to worry about.
Some will even explain that the warehouse is on the columned floor below the existing building, and after all, "everyone knows today that the authorities encourage building expansions within the framework of the "Tama 38" plans, so of course there is no problem with the apartment.".
However, "opportunity" has its thorn in it. Recently, the ruling of the Honorable Justice Haim Tovi of the Tel Aviv District Court was published, regarding an apartment that began its journey about 13 years ago when the owner of the apartment (in a condominium in the central area) converted warehouses and adjacent areas into residential apartments [T.A. 2113-04, Ashkenazi et al. v. Haggai].
From the very beginning, the residents of the other apartments tried to stop the neighbor's construction, to convert the warehouses into apartments, and even approached the municipality about the matter. When the latter did not stop the work, they approached the Magistrate's Court, which, by agreement, issued an order prohibiting the use of the warehouses for residential apartments ("the first lawsuit").
Subsequently, another lawsuit was filed against the neighbor, requiring the demolition of the apartment, disconnecting the storage rooms from the sewer network, and restoring the situation to its original state, along with a number of other remedies.
In parallel with his defense against the neighbors' lawsuit, the neighbor sold the apartments he owned to another person. He was the "opportunity" buyer, who thought he had made an excellent deal. However, after the plaintiffs learned of the sale, the lawsuit was amended and the new buyer was also added as a defendant to the lawsuit.
The Honorable Court reiterated that the construction work carried out does not constitute internal changes that do not require a permit, and that construction that changes the purpose of the property, from a warehouse to a residence, is not a purely internal change and therefore requires obtaining a building permit. It was further ruled that this is an external change and an infringement of the building percentages belonging to all the tenants of the condominium. The judge issued an order addressed to the defendants (the original neighbor and the buyer who purchased the ready-made apartment from him), and ordered that the situation be restored to its former state.
The buyer "on the spur of the moment" claimed that he purchased the warehouses in good faith, without knowing and without needing to know the legal and administrative status of the warehouses prior to their purchase. The buyer also claimed against the tenants of the condominium as well as against the seller that they deliberately concealed from him the existence of the first lawsuit, as well as the existence of the judgment. In addition, the buyer claimed that if he had known that there was a legal problem with the property, he would not have purchased it at all.
The Honorable Court ruled that since it was clearly proven that the warehouses were converted, illegally and without a permit, into residences, thereby damaging the common property of the house, then the ruling also applies to the person who purchased the apartment and the warehouses in which the construction was carried out. This is despite the fact that not A warning note was recorded regarding the enforcement of the judgment in the first lawsuit. A property buyer steps into the seller's shoes in this matter, and must check at the time of the transaction that there is no illegal construction..
In this matter, Honorable Justice Toby expanded and ruled that, even if the buyer did not know and could not have known that the warehouses had been illegally converted into residences, it is clear that he is not entitled to continue to use them in a manner not in accordance with their original purpose, i.e. for storage only.
Although there are often real opportunities in the apartment market, the attractive price of which is determined on the basis of missing rights that can be arranged. However, this requires proper planning of the transactions by suitable professionals and a thorough examination of the risks in these transactions, in comparison with the ability to resolve them. Attempting to "cheat instead of plan" and running to tell everyone about the "opportunity" that we managed to seize may lead to disappointment and the loss of a lot of money.
Attorney Yigal Weinstein, is a managing partner at a law firm Wolfson Weinstein & Co.'.
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