What is a Multi-Unit Building in Ramat Gan?

What is a Multi-Unit Building? Legal and Practical Definition

A multi-unit building is a structure containing several residential units (apartments) or offices, where certain parts of the building are owned jointly by all residents. Unlike a purely private building, a multi-unit building has a legal division between private areas (each resident's apartment) and common areas such as staircases, building facade, roof, shared storage, and engineering systems.

According to Israeli Multi-Unit Building Law, a multi-unit building is a structure composed of residential or commercial units, where each unit has separate owners, but they share ownership of common areas under certain circumstances. The practical meaning is that each resident in a multi-unit building is not only the owner of their apartment but also an owner of a share in the entire building.

In Ramat Gan, as throughout the country, multi-unit buildings are registered in the National Registry of Lands as part of the property's official registry. This registration legally determines each resident's rights in common areas and their obligations for maintenance and payment of management fees.

Legal Structure: Private and Common Areas

Each multi-unit building is divided into two types of property: private areas and common areas. Private areas are the apartment itself—a space where only the resident and their household exist. Common areas include staircases, elevators, building facade, roof, storage units, parking spaces (if shared), water and electricity supply systems, sewage pipes, and all engineering systems serving the entire building.

Ownership of common areas is not individual ownership. Each resident holds a certain percentage of the common areas, usually according to the ratio of their apartment's area to the total area of all apartments in the building. This percentage also determines the resident's share of management fees, building insurance fees, and major repair expenses.

Multi-Unit Building Registration in Ramat Gan: Process and Requirements

Registration of a multi-unit building in Ramat Gan is conducted at the National Registry of Lands, similar to the registration of any other property. The process begins during the planning and construction phase, when the contractor or developer submits an application for multi-unit building registration. The application includes approved construction plans, apartment division diagrams, a list of prospective residents (if it is new construction), and additional documents.

After construction completion and occupancy commencement, formal registration of the multi-unit building in the land registry takes place. This registration includes details of each apartment, the percentage of ownership each resident holds in common areas, and details of the management committee (if one exists). Our firm, Mandelbaum, Gor, Witzman-Gor & Associates, with over 18 years of experience in real estate and property law, can assist with the registration process and answer legal questions related to establishing a multi-unit building in Ramat Gan.

Rights and Obligations of Residents in a Multi-Unit Building

Each resident in a multi-unit building holds clear rights and obligations. Rights include ownership of the private apartment, the right to use common areas (staircases, elevator, storage), the right to participate in decisions of the general residents' assembly, and the right to receive information about the management budget and fees. Obligations include timely payment of management fees, payment of insurance fees, maintaining order and cleanliness in common areas, and adherence to regulations established by the residents' committee.

Under the Multi-Unit Building Law, a resident cannot avoid paying management fees or insurance fees, even if they do not use certain common areas. This is because these fees cover mandatory expenses such as maintenance, insurance, and cleaning. Disputes between residents or between a resident and the committee regarding fees or other obligations may reach court, and in such cases, it is important to consult an attorney specializing in this field.

The Process of Establishing a Condominium: Steps and Legal Requirements

Establishing a condominium is a complex process that requires legal and bureaucratic approvals. The process begins with the planning phase, when the engineer and contractor prepare construction plans in compliance with the Condominium Law requirements. At this stage, the division of areas, ownership percentages of each apartment in common areas, and the location of storage units and parking spaces must be determined.

After approval of the plans by the Ramat Gan Municipality and the Safety Authority, construction begins. At this stage, it is important to establish an initial residents' committee (or on behalf of the developer), whose role is to oversee the process, address initial resident complaints, and prepare the foundation for establishing a permanent committee after construction is completed.

After construction is completed and residents move in, a permanent residents' committee must be established (at least 3 members, according to the Condominium Law). This committee is responsible for managing the building, making decisions on major repairs, setting maintenance fees, and resolving disputes between residents. The committee meets at least twice a year in a general assembly (all building residents).

Registration of the condominium in the Land Registry is a critical step. This registration legally confirms the existence of the condominium, the rights of each resident in common areas, and their obligations. Without this registration, an apartment cannot be sold, rented, or used as collateral for a loan. Our firm, Mandelboim, Gor, Witzman-Gor & Co., can assist in the registration process and handle any legal matter related to establishing a condominium in Ramat Gan.

Maintenance Fees and Upkeep: How Are They Determined?

Maintenance fees in a condominium are set by the residents' committee and are limited by law. These fees cover expenses such as cleaning common areas, lighting, elevator electricity, building insurance, safety inspections, and pest control. Each resident must contribute to these fees in accordance with their ownership percentage in common areas.

Generally, maintenance fees are calculated based on an annual budget prepared by the residents' committee. The budget includes fixed expenses (cleaning, lighting, insurance) and variable expenses (repairs, equipment replacement). These fees may change from year to year based on actual needs. Each resident is entitled to review the budget and raise questions about specific expenses to the committee.

Disputes over maintenance fees or non-payment of fees may reach court. Generally, the court will examine the committee's expenses and decide whether they are reasonable and lawful. If a resident does not pay fees, the committee can file a collection lawsuit and may also impose penalties such as restricting the resident's rights in common areas.

The Residents' Committee: Functions and Authority

The residents' committee is the governing body of a condominium. The committee is composed of residents elected by all residents through voting, or sometimes appointed by the developer during the establishment phase. The committee's functions include budget management, setting maintenance fees, resolving disputes between residents, overseeing maintenance and insurance, and making decisions on major building repairs.

The committee must operate in accordance with the Condominium Law and the bylaws established by the residents. All committee decisions must be documented and communicated to all residents. Residents are entitled to object to a decision or file an objection within a certain period (usually 30 days), and may also petition the court if they believe the decision is unlawful or unfair.

Disputes between committee members or between the committee and residents can be legally complex. Our firm has experience handling such conflicts and can represent residents or even committees in court proceedings.

Types of Shared Housing and Legal Divisions

Shared housing in Israel is divided into different types according to the form of ownership and management. The most common type is a traditional shared building, where each tenant is the owner of their apartment and a co-owner of the shared building components. This type is common in Ramat Gan and throughout the country.

A second type is shared housing with a mortgage company. In this model, tenants participate in a mortgage company that is the official owner of the building, and each tenant owns shares in the company. This model is sometimes used in large construction projects or in luxury properties.

A third type is shared housing with a professional manager. In this model, the tenants' committee employs a professional building manager who is responsible for all operational aspects. This model is common in large construction or properties with many tenants.

Tama 38 Shared Housing in Ramat Gan

Tama 38 (National Outline Plan 38) is a government plan for renovation and evacuation-construction of old buildings. In Tama 38 projects in Ramat Gan, old tenants are entitled to a new apartment in the new construction, sometimes with additional space or monetary compensation. New tenants participate in the costs of the new construction, usually according to the area of their new apartment.

In Tama 38 projects, it is very important to understand the rights of old tenants and the obligations of new tenants. These costs can be significant, and each tenant should carefully review the contractor's agreement and plans before signing. Our office can assist in reviewing and analyzing Tama 38 agreements in Ramat Gan.

Property Tax and Purchase Tax in Shared Housing

When a tenant sells their apartment in a shared building, they may be liable to pay capital gains tax to the tax authority. Capital gains tax is a tax on the profit created by an increase in the property's value from purchase to sale. The tax rate varies depending on the holding period and type of property.

Additionally, a buyer of an apartment in a shared building may be liable to pay purchase tax (transaction tax). The tax rate depends on the property's value and the type of buyer (whether it is a first apartment or an additional apartment). Understanding these tax obligations is very important when selling or purchasing an apartment.

Common Disputes in Shared Buildings and How to Handle Them

Disputes in shared buildings can arise from various sources and raise complex legal issues. The most common type is a dispute over management fees — when a resident believes these fees are too high, or the committee did not levy them lawfully. Such disputes can reach court, where the court will examine the committee's expenses and decide whether they are reasonable.

A second type of dispute is between residents — for example, over noise, odors, or violation of bylaws. Such disputes can be tense and difficult to resolve, since residents live in close proximity. Typically, the committee will attempt to resolve the dispute through mediation or by establishing new rules. If unsuccessful, the affected resident can file a lawsuit in court.

A third type is a dispute over major building repairs. When a building requires significant repair (for example, roof repair, pipe replacement, or facade renovation), the committee must decide on the repair and how to divide the costs among residents. If residents disagree about the need for the repair or its cost, a dispute may arise.

In any case of a dispute in a shared building, it is important to consult with an attorney experienced in this field. Our firm, Mendelbaum, Gor, Witzman-Gor and Partners, has extensive experience handling such disputes and can represent residents in court.

Residents' Rights Before the Committee and Court

Every resident in a shared building holds important legal rights. First, every resident has the right to participate in decisions of the general assembly (residents' meeting). In this general assembly, every resident can voice their opinion, ask questions, and also vote on important decisions. Decisions in the general assembly are typically determined by simple majority vote, but certain decisions (such as major repairs) require a qualified majority.

Second, every resident has the right to receive information about the management budget, management fees, and financial reports of the committee. This information must be made available to every resident upon request, and cannot be withheld. If the committee does not provide this information, a resident can file a lawsuit in court.

Third, every resident has the right to object to a committee decision if they believe it is illegal or unfair. Such objection can be made in writing, before the committee, and also in court. The court will examine the decision and determine whether it is lawful.

Fourth, if a resident suffers damage due to the committee's negligence (for example, an apartment damaged by a roof leak that was not repaired), the resident can file a tort claim against the committee or against the other residents. Such a claim requires proof of negligence, causation (that the damage was caused by the negligence), and the extent of the damage.

How Our Firm Mandelbaum, Gur, and Witzman-Gur Can Help You

Our firm Mandelbaum, Gur, and Witzman-Gur & Co., Attorneys at Law, specializes in condominium associations and real estate in Ramat Gan and the surrounding area. With over 18 years of experience in real estate and property law, our firm can assist you with any legal matter related to a condominium association.

Our services include legal representation in the process of registering a condominium association with the National Registry of Land, establishing a lawful residents' committee, resolving disputes between residents or between a resident and the committee, advising on major repairs and renovations in construction, legal representation in the sale or purchase of an apartment in a condominium building, and specialized consultation for residents in TAMA 38 projects in Ramat Gan.

We believe in a personal and dedicated approach to each client. In an initial free consultation meeting, we will listen to your issue, review the relevant documents, and provide you with clear and direct legal advice. If you are interested in full legal representation in court or in other legal proceedings, we are here to help.

Our office is located in Ramat Gan, at 1 Donsh Street, and is available for meetings at times convenient for you. We also provide telephone consultation or through other means of communication if that is more convenient for you. To schedule a meeting or for any questions, please contact our office.