Guide to Purchasing a Garden Apartment with Courtyard Rights

What is a Garden Apartment with Courtyard Rights?

A garden apartment is a residential unit directly connected to land, with direct access to a shared or private courtyard. The right to a shared courtyard is a substantive right in the ownership of a garden apartment, and includes the right to use the courtyard, maintain it, and make decisions regarding future use of the space. Unlike units in high-rise buildings, garden apartment residents have shared responsibility for the outdoor space they use directly.

When purchasing a garden apartment, it is essential to understand exactly what is included in the courtyard right: whether it is open space only, whether it includes space for vegetation, whether there are restrictions on renovations or additions, and who is responsible for maintenance. These details affect the property value, future maintenance costs, and your level of enjoyment of the apartment over the years.

Differences Between a Garden Apartment and a Regular Apartment

A regular high-rise apartment grants you the right to use common areas such as stairs, utility rooms, and roofs, but you do not have direct and practical access to open space. A garden apartment, on the other hand, grants you direct use of a shared or private courtyard, which adds a dimension of freedom and privacy. However, the right to a shared courtyard entails greater legal and financial responsibilities.

• Direct Access: In a garden apartment, you have a door opening directly to the courtyard without needing to pass through other common areas.
• Shared Responsibility: Your share of courtyard maintenance costs (lawn care, security, lighting, drainage, and sewage) is greater than in a regular apartment.
• Restrictions on Changes: There are often statutory or contractual restrictions on adding structures, fences, or other modifications to the courtyard.
• Property Value: Garden apartments have higher value due to access to open space, but maintenance costs may be higher.

Seller's Rights and Your Rights as a Buyer

When signing a sales contract for a garden apartment, it is essential to understand exactly which rights you are purchasing and which obligations you are assuming. The sales contract should clearly refer to the courtyard right: whether it is a right of full ownership, a right of use only, or a limited right for a certain period.

Full Ownership Rights in the Courtyard

Full ownership right in a shared courtyard means that you own your share of the space, not merely use it. This affects your ability to sell the apartment, rent it, use it as collateral for a loan, and your ability to influence decisions about the space. In the sales contract, it should be clear what percentage of the courtyard belongs to you, and how these percentages are calculated.

Right of Use Only

Sometimes, the right to the courtyard is a right of use only, meaning you are permitted to use it, but ownership remains with the original property owner or a mortgaged company. This can lead to legal risks: if the owner decides to sell the property or rent it to others, your right may be limited or even cancelled. Check this carefully in the contract and in the property registration document.

Obligations Regarding the Courtyard

As an owner or user with rights to the courtyard, you must contribute to the costs of maintenance, insurance, and repair of the space. These are annual costs that can change depending on the property's needs. Additionally, you must refrain from breaching the purchase contract or the rules of the shared building—for example, you cannot add structures, change the appearance of the courtyard, or use it in unapproved ways.

Common Risks When Purchasing a Garden Apartment with Courtyard Rights

Purchasing a garden apartment involves unique risks that do not exist in standard apartments. Understanding these risks can help you avoid costly mistakes.

Risk 1: Confusion Between Ownership Rights and Usage Rights

Some contracts are unclear about the legal nature of courtyard rights. If the contract states you have only "usage rights," you may find yourself without legal ownership of the area. This could harm the property's value, your mortgage, and future sales. To avoid this, ensure the contract clearly states that the courtyard right is an ownership right and that it will be registered in the Land Registry.

Risk 2: Unexpected Maintenance Costs

Courtyard maintenance costs can vary annually depending on needs. If major repairs are required—for example, replacing a sewage system, repairing fences, or upgrading lighting—these costs can be substantial. Before purchase, check average expenses from previous years and inquire about future maintenance plans.

Risk 3: Disputes with Neighbors

If the courtyard is shared among multiple apartments, disputes may arise regarding courtyard use, maintenance, or expenses. Before purchasing, check whether previous disputes occurred in the property and how they were resolved. Also review the building regulations to understand the rules governing courtyard use.

Risk 4: Legal Issues in Land Registry Documents

Sometimes the Land Registry contains unclear records, such as third-party rights or liens. If you do not examine the registry carefully, you may encounter an unpleasant surprise after purchase. Ask an attorney to thoroughly review the registry and confirm there are no liens, outstanding rights, or other issues.

Risk 5: Inability to Make Changes to the Courtyard

If you wish to add a structure, fence, or modify the courtyard's appearance, you may need approval from other owners or the building association. This can be a lengthy and complicated process, and often impossible altogether. Before purchasing, check the conditions that apply to courtyard modifications.

Costs Associated with Purchasing a Garden Apartment with Courtyard Rights

When planning to purchase a garden apartment, it is important to be aware of all associated costs. Beyond the purchase price itself, there are additional expenses that can significantly impact your budget.

Purchase Costs

Purchase costs include capital gains tax (on the property's appreciation since its last purchase), registration fees at the Land Registry, legal fees for an attorney, and engineering and legal inspections. Generally, these costs range from 5-10% of the property value, depending on the property's legal status and additional expenses.

Annual Maintenance Costs

Every garden apartment owner must contribute to the maintenance costs of the shared courtyard. These costs include lawn mowing, lighting, security, repairs, and insurance. Typically, these costs are collected by the building committee and divided among residents based on their ownership percentages. Review the property's financial reports to understand average expenses.

Emergency Repair Costs

From time to time, unexpected emergency expenses may arise—for example, sewage system repairs, fence replacement, or storm damage repairs. Frequently, these costs are divided among apartment owners, so you may be required to contribute a substantial sum suddenly. Ensure the property has a reserve fund to cover such expenses.

Legal and Insurance Costs

Owning a garden apartment may involve additional legal costs if disputes or legal issues arise. Additionally, apartment insurance may be more expensive due to the courtyard right and additional maintenance costs.

Tama 38 and Garden Apartments in Urban Renewal Projects

In recent years, urban renewal programs such as Tama 38 have led to the construction of new garden apartments in existing cities. These apartments offer comfortable living opportunities, but attention must be paid to the unique conditions of these programs.

What is Tama 38?

Tama 38 is a national program for urban renewal in Israel. It allows groups of apartment owners in old buildings to agree on a temporary evacuation arrangement — meaning residents are relocated from the old building, a new building is constructed in its place, and residents return to new apartments. In these programs, new garden apartments are often built that were not part of the original construction.

Rights in Garden Apartments under Tama 38

In garden apartments under Tama 38 programs, the right to a courtyard may be limited or different from that of "regular" garden apartments. For example, the courtyard may be shared among several apartments, or there may be restrictions on adding structures. Additionally, maintenance costs may be higher due to the newness of the property. Before purchase, carefully review the program conditions and the rights granted to you.

Risks in Urban Renewal Programs

Urban renewal programs can be legally and financially complex. Often, there are delays in implementation, changes to the original plan, or disputes between residents and developers. Additionally, construction costs may raise the apartment price beyond the original estimate. Before participating in such a program, obtain legal advice from an attorney experienced in urban renewal programs.

Professional Legal Consultation — Essential When Purchasing a Garden Apartment

Purchasing a garden apartment with courtyard rights is a significant decision that requires thorough legal review. You cannot rely on your own inspections alone — you need professional legal consultation from an attorney experienced in real estate and property law.

An experienced attorney will review the deed, the purchase agreement, the building's regulations, and identify risks you may not see on your own. He will also ensure that the courtyard right is properly registered in the land registry and will help you manage all procedures required to complete the transaction.

At Mendelbaum, Gor, Witzman-Gor and Associates, Law Offices, we specialize in property law and real estate, as well as tort law and civil-commercial law. We have over 18 years of experience representing clients in complex real estate transactions, including the purchase of garden apartments and disputes concerning courtyard rights. We are committed to protecting your interests and ensuring that the transaction is legally secure.