A claim for compensation for a decrease in the value of real estate is a legal procedure that protects the individual's property right (a fundamental right in Israel) against expected damage to the property's value resulting from the approval of a plan
The social justification for legislation that protects the value of real estate is that real estate reflects a main investment in the life of the average person, which includes most of the capital and the center of his life (for example - a residential apartment). For this reason, a decrease in value can significantly damage the average person's life. Hence, there is a social need to protect such damage
Another social justification, derived from a social principle known as 'distributive justice'. According to the principle, the individual should not bear alone the decrease in the value of a program that contributes to the general public, therefore it is appropriate to compensate him. The purpose of the compensation arrangement is to balance the benefit of the individual with the benefit of the public. The assumption that the compensation arrangement will cause the authorities to consider whether the public benefit of approving a planning action outweighs the harm to the individual's property rights and the payment of compensation, and if the benefit increases then the planning action will be approved and this will result in aggregate well-being
However, in order to avoid excessive deterrence of the planning authorities from initiating plans in the area (due to fear that they will not be able to meet the payment of the compensation that will be imposed on them due to the approval of plans) and in order to promote planning and development procedures, the law establishes conditions for exemption from compensation
The exemption clause has 3 cumulative conditions. FirstThe exemption clause has 3 cumulative conditions. First, that the provision that harms the plan is included with the provisions that are stipulated in the law as granting exemption from the obligation to pay compensation (for example, a provision on limiting the number of buildings in a certain area). Second, the damage is reasonable. Third, that is unjust to pay compensation שני שהפגיעה סבירה. שלישי שלא צודק לשלם פיצויים בנסיבות אותו המקרה
Another way to deal with the excessive reluctance of the planning authorities to pay compensations caused by planning procedures, is when the initiators of the plan or the building permit applicants (according to TMA 38) are private entities, then they are asked to deposit a letter of indemnity against claims for compensation that will be filed against the planning authorities. So, if submitted A claim for a decrease in value by owners of damaged properties, the compensation obligation will apply to the developers
The claim for a decrease in value must be filed within 3 years from the date of the approval of the plan or in the case of TAMA 38 from the date of the permit, which one will expire
In reality, claims for a decrease in the value of real estate are not accepted easily and it seems that the trend of the authorities and legal courts is to act cautiously in this type of claims. מקרה שכיח לתביעה לפיצויים בגין ירידת ערך כתוצאה מפרוייקט תמ"א 38
Imagine the following situation - you are the owner of a penthouse in a 3-4 floors building. For years you have been used to an open view overlooking the sea and open spaces. In the adjacent building, the TMA 38 project is being carried out, and instead of 3-4 floors building, an 8 floors building is planned to be built, which blocks the view, one of the reasons you purchased the apartment in the first place
Landscape is only one element to damage. Additional damage can be caused by the TMA 38 project; - load on infrastructure, parking shortage due to the addition of massive housing units, construction outside building lines and adjacent to your building, blocking of wind, light and shade, damage to protected trees and more
Does such a situation cause a decrease in the value of your apartment? What happens if the TMA 38 project cannot be carried out in your building?
Is a penthouse without a view of the sea or open spaces not worth less than a penthouse with a view of the sea and an open view?
In my opinion, the answer to all questions is that there is damage to the value of the assets, which causes a decrease in value
So what, after all, leads to the fact that claims for a decrease in value are not accepted frequently?
The projects of TMA 38 great social importance to the general public and therefore there is a desire to promote projects of this type. Among the reasons; - strengthening buildings against earthquakes, urban renewal of entire residential neighborhoods, dealing with the housing crisis by increasing the supply of apartments and lowering prices
In the past, due to the concern of the municipalities and project developers of TMA 38, a wave of claims for value decrease that would harm TMA 38 projects, attempts were made to cancel the procedure in the law for submitting claims for compensation for value decrease. The attempt was unsuccessful, and claims can be made for a decrease in value. Despite this, the path to receiving compensation is not easy and the tendency is to act cautiously and reduce acceptance of claims
to illustrate; Recently (06.03.2020) the Haifa District Appeal Committee decided (in the context of an appeal: 19-07-9016 Zuckerman Alexander v. The Local Committee for Planning and Construction of the Baron cities), to reject a claim for decrease in value without deciding the fundamental question of whether or not it is possible to file a claim for decrease in value against a violation of TAMA 38. The decision emphasizes the uncertainties and problematic issues raised by the issue
The good news is that the arrangement for filing claims for a decrease in value caused by the TMA 38 project was not canceled either by legislation or by the rulings of the courts. Therefore, if the value of your property is damaged as a result of a TMA 38 project or plan, it is recommended to consult with an attorney who is knowledgeable in the field and file a claim. The value of the compensation may amount to high amounts designed to maintain your condition from before the injury
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