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Legal Aspects of Property Ownership in Israel

Historic Background:

The Land of Israel was an integral part of the Ottoman Empire, which ruled over southern Europe and most of the eastern Mediterranean Basin. During the second half of the 19th century the "Majelah al Askioum al adlaya" ("the file of the Laws of Justice") was published, consolidating the various Ottoman laws existing at that time including various laws relating to property. Other laws relating to property were published during the same period, and in particular the Ottoman Land Law of 1858, which constituted the basis for Israeli land law up to its cancellation by the Land Law 5729(1969), which was legislated by the Knesset.

Ottoman legislation classified land into five types. Perhaps the most colourful was the "Moat" land, which was defined by section 6 of the Ottoman Land Law of 1859 as "...remote from any village or town to the extent that the loud voice of a man standing at the far end of a town or village cannot be heard from it..."

In 1918, at the end of WWI, the British Empire conquered Palestine. In their retreat, the Ottoman authorities closed all land registration offices in the Country (these were called "Tabu" - which is the term commonly used to this day when one refers to the modern Israeli Land Registry) and took with them most of the land registration books and documents, leaving the land registration system in complete chaos. In order to be able to overcome this chaotic state, the British initially prohibited, as of 18th of November 1918, all land transactions, and declared that any transaction made in violation of the said prohibition would be rendered void. Two years later, land transactions were permitted albeit subject to the approval of the authorities, thus allowing the British authorities to keep the land registration system "on a short leash" in order to prevent irregularities in registration. The procedures of land registration were largely based upon those laid down by the Ottoman authorities and it was only in 1969, by virtue of the Land Law 5729 (1969), that all Ottoman land legislation, including the classification of land into the five types mentioned above, was abolished.

Various Legal Aspects of Israeli Land Law:

The Land Law 5729-(1969) defines a closed list of real estate rights recognised by Israeli law. These are: Ownership, Lease Mortgage, Easement and Preemption. The nature of these rights are similar to those existing under English Law.

In Israel, private ownership of land is available for approximately 7% of the Country's land, since approximately 93% of the land is owned by the State by virtue of Basic Law: Israel Lands, which prohibits any transfer of ownership rights from the State to another party (there are some exceptions to this limitation which will not be discussed within the scope of this article). Thus, State land is most commonly leased for long periods rather then sold.

The limitation upon conveying ownership from the State to another party reflects the principles of the Jewish National Fund, which were adopted in the spirit of the 5th Zionist Congress held in 1905.

The Israeli government and the Knesset adopted this principle, in the belief that maintaining national ownership of the land would facilitate the absorption of immigration ("Aliyah"), enable a more efficient application of planning principles and prevent the transfer of the land to "undesirable" parties.

The organ entrusted with managing state-owned land is the Israel Lands Administration (in Hebrew "Minhal Mekarkai Israel"). In general terms, the Israel Lands Administration distinguishes between urban land and agricultural land: the former is commonly leased for periods of 49 years with an option to extend the lease for an additional period of 49 years.

It should be noted, that transactions of State-owned land involving foreign lessees require the approval of the Israel Lands Administration. A foreigner, within this context, is anyone who is not an Israeli citizen, or a new immigrant, a person who has not declared his intention to immigrate to Israel in accordance with the Law of Return, or a corporation controlled by foreigners.

The above-mentioned legislation of the Land Law 5729(1969), also effectively "revolutionised" the land registration system.

Property is identified by a system set up during the British Mandate although not fully completed during that period. With the passage of time however most of the land in Israel has been meticulously mapped and surveyed. The country was divided into sections each with its own unique number and each section is divided into numbered plots. These divisions are referred to as Gush (Section) and Helka (Plot).

In built up areas where, for instance, an apartment building has been erected on a Helka, then each apartment is identified as a Tat Helka (sub plot) and given an identifying number. The rights and obligations of the owner of each unit are specified by Bayit Hameshutaf (Condominium) documents that include plans identifying each owner's property and are registered.

Property is registered with various authorities

  1. The Land Registry (Tabu): this is the government lands registry office. This is open and accessible to the public - anybody can check the ownership of property and offers vital information regarding each and every plot or subplot. A quick query will reveal all information registered in the Registry, including the owner of the land, its registered size, rights relating to the land, and all pledges, mortgages and encumbrances relating to the land registered in this office.
  2. Minhal Mekarkai Yisrael: The Israel Lands Administration - as explained above the holding company for most of the land in the country. The owner of a property must give permission before details of ownership are made available.
  3. Hevra Meshakemet: This is a body that is authorized to register property until, for instance, a building project is completed and the entire project is registered with the Tabu Office or Minhal.

Similar to the U.K. in Israel all conveyancing of real estate rights (except for leases not exceeding a period of 5 years) must be made in writing, and without registration of the transaction in the Registry, the right in question is not transferred from the seller to the purchaser (with the exception of certain types of leases), thus leaving the latter only with contractual rights vis-à-vis the seller.

The Israeli Land Registry also resembles its British counterpart by allowing a purchaser of land to register a Caution (" He' arat Azhara "). In order to protect himself the purchaser can register a Caution in the Registry, indicating that a contract relating to the land was made, and prohibiting the registration of any conflicting transaction.

The information contained on this page is a general guide. Prospective purchasers must obtain specific legal and professional advice from qualified Israeli legal counsel or tax advisors. Information provided courtesy of Capital Property Consultants: http://www.property.co.il
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