Comprehensive Guide to Purchasing a Duplex in a Shared Building

What is a Duplex in a Shared Building and Why Is It So Important?

A duplex is a residential unit consisting of two apartments connected to each other within a shared building. Unlike a regular apartment, a duplex allows a buyer to hold two separate units in the land registry (Tabu), with each apartment potentially having separate ownership or joint ownership by two owners. This arrangement has become particularly popular in urban renewal projects and new construction, as it allows flexibility in ownership, use, and planning.

Purchasing a duplex in a shared building involves more complex legal steps than purchasing a regular apartment. It is necessary to understand the dynamics of dual ownership, the requirements for connecting the apartments, the registration process in the land registry, and the implications for shared rights in the building. All of these require professional and thorough legal counsel.

Mendelbaum, Gor, Witzman-Gor and Partners law firm, specializing in real estate law since 2008, guides buyers through every stage of the process — from examining legal rights, through negotiating terms, to completing registration at the Land Registry. In this section, we will review all the important aspects you need to know before signing a sales agreement.

What is Apartment Connection and What Are Its Legal Implications?

Apartment connection is a legal process in which two separate apartments are physically connected (usually through an opening in a shared wall) and registered as a single unit in the land registry. This differs from a duplex, in which two apartments are maintained as separate units in the land registry but under joint ownership or separate ownerships within the same property.

In apartment connection, the local authority (municipality) must approve the connection as part of the construction or renovation process. Additionally, the building plan in the land registry must be updated to reflect the new connection. This involves submitting a request for registration with the Land Registry, verification of the new topographical data, and coordination with the local authority.

Care must be taken to ensure that the connection is made in accordance with building regulations and safety rules. If the connection is not performed properly, it may be difficult or impossible to update the land registry, creating significant legal issues when selling the property in the future.

What Are the Basic Steps in the Duplex Purchase Process?

• Initial Legal Review: Examination of the land registry, review of the plan, verification of shared rights in the shared building, and examination of the legal status of the property.
• Negotiation of Terms: Agreement on price, mortgage conditions (if applicable), terms of sale, and timing of deal closing.
• Sales Agreement: Signing a sales agreement that specifies all terms, obligations, and arrangements between the buyer and seller.
• Examination of Joint Ownership Legal Status: If the duplex involves joint ownership by two owners, ensure that the agreements between the owners are clear and valid.
• Submission for Land Registry Registration: Filing a request to register the transaction with the Land Registry, with all required documents.
• Payment of Taxes and Fees: Payment of appreciation tax, purchase tax (in certain cases), and registration fees.
• Receipt of New Land Registry Certificate: Registration of the buyer as owner in the new land registry certificate.

Each step requires careful attention to legal details and accuracy in documentation. Errors in early stages can lead to delays, additional costs, or even inability to complete the transaction.

Legal Requirements and Real Estate Law for Duplex

A duplex in a shared building is subject to Israeli real estate laws, particularly the Law of Ownership of Housing (Apartment). This law establishes rules for apartment ownership in a shared building, shared rights, and responsibilities towards the building and other residents.

When purchasing a duplex, the buyer becomes the owner of two housing units within a shared building. This means the buyer must bear the building's shared expenses (common electricity, roof repairs, general maintenance, etc.), like any other resident. Additionally, if the duplex involves connecting apartments, it is necessary to ensure that the connection was made in accordance with building regulations and local authority ordinances.

Shared Ownership vs. Separate Ownership

In a duplex in a shared building, there are two main ownership models:

• Shared ownership by two owners: Both owners are joint owners of both apartments. Each owner is responsible for half of the rights and obligations. This requires a clear agreement between the owners regarding use, maintenance, future sale, and cost sharing.
• Separate ownership: Each apartment is registered in the Land Registry under a separate owner's name. Each owner is responsible only for their own apartment, but must still contribute to the shared expenses of the building.

The choice of model depends on the buyer's specific circumstances. If it is shared ownership (for example, owners who are spouses), a clear legal agreement is required to protect the rights of both owners. If it is separate ownership, each owner can act independently, but an agreement regarding shared maintenance and cost sharing is necessary.

The Role of the Land Registry in Duplex Registration

The Land Registry (Property Registry) is the principal legal document that proves ownership of a property. When purchasing a duplex, the Land Registry must reflect the new ownership, the connection of apartments (if it exists), and all rights and obligations associated with the property.

In the Land Registry registration process, the registration office reviews all required documents: the purchase contract, local authority approval (if required), updated building plan, and proof of tax and fee payments. If there is any discrepancy or documentation issue, the registration office may reject the request or require additional documents.

It is important to note that Land Registry registration is a process that can take several months, depending on the registration office's workload and review of submitted documents. Therefore, it is important to plan accordingly and be prepared for possible delays.

Expected Costs in Purchasing a Duplex in a Multi-Unit Building

Purchasing a duplex involves various costs that are important to understand in advance. These include taxes, registration fees, legal costs, and shared building expenses. Below is an overview of the main costs:

Capital Gains Tax

Capital gains tax is a tax on the profit from an increase in the value of a property. When purchasing a duplex, capital gains tax is paid by the seller at the time of sale. However, if the duplex was recently built or renovated, there may be no significant appreciation, in which case the capital gains tax will be low or even zero. It is important to check with a tax calculator or tax advisor the expected amount of capital gains tax under the specific circumstances of the purchase.

Purchase Tax

Generally, the purchase of a residential apartment is not subject to purchase tax. However, if you are purchasing a duplex for investment purposes or for a company, you may be liable for purchase tax. It is important to clarify with a tax advisor or real estate attorney what the situation is under your specific circumstances.

Land Registry Registration Fees

The Land Registry Office charges fees for registering the new property in the land registry. The amount of fees depends on the property value and type of registration. Typically, these fees range from several hundred to thousands of shekels, depending on the property value and registration complexity.

Legal Costs

Legal consultation in real estate law, preparation of a purchase agreement, management of the land registry registration process, and general consultation involve legal costs. Mendelboim, Gor, Witzman-Gor and Co. offers a free initial consultation meeting, and thereafter costs depend on the scope of consultation and transaction complexity.

Shared Building Expenses

As owners of a duplex in a multi-unit building, you are required to share the building's shared expenses. These include shared electricity, roof repairs, general maintenance, and building insurance. These expenses vary depending on the building size, age, and type of repairs required.

Unit Connection Costs (if applicable)

If the duplex involves connecting units, construction costs and permits from the local authority may arise. These depend on the type of connection, size of the opening, and local authority requirements. It is important to clarify in advance whether the duplex you are purchasing is already legally connected or if a new connection needs to be performed.

Typical Costs Table

Important Note: The above costs are typical only and may vary according to the specific circumstances of the purchase, property location, and value. It is important to obtain an accurate legal assessment before committing to a transaction.

Risks and Common Mistakes in Purchasing a Duplex

Purchasing a duplex in a shared building involves legal risks that are important to understand and avoid. Below is a review of the main risks and common mistakes:

Improper or Unapproved Connection of Units

One of the greatest risks in purchasing a duplex is that the connection between the units was not performed properly or did not receive approval from the local authority. This can lead to significant problems when registering the property at the Land Registry or when selling it in the future. If the local authority requires the connection to be demolished, this could result in considerable costs and significant delays.

To avoid this risk, it is important to verify in advance whether the connection received approval from the local authority and whether it complies with building regulations. If the connection was not approved, you should inquire with the local authority whether retroactive approval can be obtained or if repairs are necessary.

Issues with Joint Ownership

If the duplex involves joint ownership of two owners, the lack of a clear agreement between the owners can lead to legal disputes. For example, if one owner wants to sell the property and the other does not, or if there is disagreement about maintenance or expenses, this can be a significant problem.

To avoid this risk, it is important to have a clear legal agreement between the owners that defines their rights and obligations, the procedure for future sale, and the method of dispute resolution.

Failure to Check Joint Rights in the Building

Duplex owners in a shared building must share in the common expenses of the building. If you did not check the amount of common expenses or the condition of the building (for example, if significant building repairs are needed), you may face an unpleasant surprise after purchase.

To avoid this risk, it is important to check the building's common expense reports in advance, meet with the building committee (if one exists), and inquire whether there are plans for future building repairs.

Failure to Check the Legal Status of the Title Deed

Sometimes, a property may have legal issues not defined in the title deed, such as third-party rights, mortgages, or liens. If you did not examine the title deed carefully, you may face a significant legal problem after purchase.

To avoid this risk, it is important to carefully examine the title deed, inquire whether there are mortgages or liens on the property, and determine whether there are any third-party rights.

Delays in the Land Registry Registration Process

The Land Registry registration process can take several months, depending on the workload of the registration office and the processing of submitted documents. If there are problems with documentation or submitted requirements, there may be significant delays.

To avoid this risk, it is important to ensure that all required documents are in order before submission to the registration office, and to be prepared for possible questions and reviews from the authority.

Why Choose Mendelbaum, Gor, Witzman-Gor & Co. Attorneys at Law?

Purchasing a duplex in a shared building is a significant legal transaction that requires experience, precision, and deep knowledge of real estate law. Mendelbaum, Gor, Witzman-Gor & Co. has specialized in real estate and property law since 2008, accumulating extensive experience in handling similar transactions.

The firm, headed by Attorney Karen Mendelbaum, provides professional, precise, and dedicated legal advice to every buyer and seller of a property. We guide our clients through every stage of the purchase — from the initial legal review, through negotiating terms, preparing the sales contract, managing the registration process with the Land Registry, and advising on rights and obligations.

Advantages of choosing us:

• Extensive Experience: Over 18 years of experience in real estate and property law, with a significant number of successful transactions.
• Deep Knowledge: Thorough understanding of every legal aspect of duplex purchase, including joint ownership, apartment linking, and shared rights.
• Personal and Dedicated Service: Each client receives personalized attention and advice tailored to their unique circumstances.
• Free Initial Consultation: We offer a free initial consultation to discuss your needs and explain how we can assist you.
• Convenient Location: Our office is located in Ramat Gan, in the heart of the center, and is easily accessible to buyers and sellers from Petah Tikva, Ramat Gan, and surrounding areas.

If you are considering purchasing a duplex in a shared building, we invite you to contact Mendelbaum, Gor, Witzman-Gor & Co. for a free initial consultation. We are here to help you navigate all stages of the purchase with confidence, precision, and professionalism.