Guide to Building Rights in Taboo Format

What is a Building Right in Taboo Format?

A building right in taboo format is a legal right documented in the taboo format (the official registry of the property at the Land Registry) that grants the property owner the right to add additional building area to their apartment or property. This right is registered as part of the official documentation of the property and is highly significant when selling, purchasing, or planning building additions.

In Israel, building rights are an asset with significant economic value. A property owner registered with building rights may use them themselves or sell them to another property owner. In some cases, building rights are created as a result of new urban planning or as part of building laws that permit adding stories or expanding residential units.

A deep understanding of building rights in taboo format is essential for anyone interested in purchasing a property, selling an apartment, or conducting construction work. An error or misunderstanding in calculating or utilizing building rights can lead to legal costs, project delays, or significant loss of economic value.

What are Building Rights in an Apartment?

Building rights in an apartment refer to additional building area that can be added to an existing apartment in accordance with construction plans, building regulations, and local laws. Typically, these rights are calculated as a percentage of the apartment's existing area or as an area specified in the taboo format.

For example, in urban renewal projects or special building plans, building rights may be sold that permit adding an extra bedroom, enlarging a living room, or adding a balcony. Building rights in an apartment may be time-limited — meaning they must be used within a certain period, otherwise they may be forfeited.

When purchasing an apartment, it is very important to review the taboo format and clearly understand which building rights are included in the property. Unused building rights can add substantial value to a property, but only if the homeowner or buyer is aware of them and knows how to utilize them.

Building Addition — Definition and Calculation

A building addition is the additional area that may be constructed based on building rights registered in the taboo. Calculation of a building addition depends on several factors: the type of property (apartment, house, shop), the planning area, local building laws, and urban regulation.

Typically, a building addition is calculated as a percentage of the existing area. For example, in some areas, up to 25–30% of the existing apartment area may be added, while in other areas the limit may be smaller. Additionally, one must take into account local building provisions such as maximum building height, distances from property boundaries, mandatory parking areas, and more.

Before carrying out any building addition, it is mandatory to obtain approval from the municipality or the relevant planning authority. Without approval, illegal construction may result in financial penalties, a demolition order, or serious legal problems when selling the property.

How Are Building Rights Calculated?

Calculating building rights is a precise process that requires examination of several official documents and plans. The first step is to review the current title deed (Tabo) of the property, which records all rights and restrictions. In this deed, there should be a clear notation if building rights exist and the extent to which they are expressed.

The second step involves examining the building plan of the property. The plan indicates the current area of the apartment or property, and in accordance with future plans or building regulations, additional building rights become apparent. For example, if the plan permits an 8-story building but currently only 6 stories are built, there may be building rights for two additional floors.

The third step is to contact the municipality or local planning authority to obtain official approval of the amount of building rights. Local planning offices can provide a detailed report on available building rights, legal restrictions, and any additional requirements (such as contribution to public funds, mandatory parking spaces, etc.).

When calculating building rights, it is important to distinguish between several types: "gross" building rights (total permitted area) versus "net" building rights (after deducting areas for public use, stairs, etc.). Additionally, building rights may be time-limited, particularly in urban renewal projects.

Building Rights Under TMA 38 and Urban Renewal

TMA 38 (National Outline Plan) is a special building plan that enables urban renewal in old neighborhoods throughout Israel. In TMA 38 projects, building rights are a significant part of the contract between departing residents and developers implementing the project.

Typically, in TMA 38 projects, existing residents receive additional building rights in exchange for cooperation in demolition and reconstruction. These rights allow them to build larger apartments than the original unit or to sell the rights to a third party. The duration of building rights usage in TMA 38 is usually defined in the specific plan, and typically they must be used within 3-5 years from the project's completion.

Buyers and sellers of apartments in TMA 38 projects must understand precisely which building rights are included in the property, when they expire, and whether there is an option to transfer them to another property or sell them separately. Misunderstanding building rights in TMA 38 can lead to significant financial losses.

Advantages and Risks of Using Building Rights

Advantages: Building rights enable enlargement of an apartment or property without the need to purchase additional property, which can add significant value to the property. Additionally, a holder of building rights can sell them separately, providing an additional source of income. In the field of urban planning, building rights may be part of a government plan to improve housing and urban renewal.

Risks: Building rights may be time-limited, meaning that if not utilized within the defined period, they may be forfeited. Additionally, unauthorized construction or construction without prior approval may result in financial penalties or even demolition orders. There is also a risk that building rights will be economically limited—that is, construction costs may increase significantly, which could make the project economically unfeasible.

Step-by-Step Guide to Building with Building Rights

Step 1: Preliminary Review — Review the title deed and check if building rights are registered. Contact the municipality or planning authority to obtain an official report on available building rights.

Step 2: Planning and Building Plan — Work with an architect or civil engineer to prepare a building plan that suits your building rights. This plan must comply with all legal and planning requirements.

Step 3: Obtaining Municipal Approval — Submit a building permit application to the municipality or relevant planning authority. Usually, this process takes several weeks to months, depending on the project's complexity.

Step 4: Registering Construction in Title Deed — After construction completion, the title deed must be updated to reflect the new construction. This is essential for future sale of the property.

Step 5: Legal Consultation — It is advisable to consult with an attorney specializing in real estate and property law before beginning construction to avoid legal complications.

Comparative Table: Types of Building Rights and Usage Ranges

Note: The table presents typical examples only. Each case is reviewed individually in accordance with the local building plan, municipal regulations, and applicable building laws.