Additional Building Rights in TAMA 38 — How to Calculate and What You Are Entitled To?

What is Additional Building in TAMA 38 and Why is it Important?

TAMA 38 (Detailed Plan for Neighborhood Renewal) is one of the primary methods in Israel for implementing urban renewal in old neighborhoods. As part of this process, the law permits the construction of additional housing units beyond what originally existed — this is what is referred to as additional building rights.

Additional building is a legal right of original tenants and contractors/developers in the project. It represents additional square meters in the project that can be sold, rented, or retained as ownership by the original landowners. Understanding how additional building is calculated is critical, as it is directly related to the value of your property and the legal compensation you may be entitled to receive.

In recent times, as neighborhoods in Petach Tikva, Ramat Gan, and other cities in Israel are being renewed, many tenants and contractors are faced with questions: How exactly is the additional building calculated? What is the formula? How many square meters am I entitled to? And what happens if a developer or contractor attempts to diminish my legal rights?

Legal Definition: Additional Building in TAMA 38

In legal terminology, additional building is the difference between the building area permitted under TAMA 38 and the building area that existed before the plan was implemented. In other words:

• New building area (under TAMA 38) = the building area planned in the new project
• Existing building area (original) = the building area of the original buildings before renewal
• Additional building = the difference between the two

Simple example: If the original building area is 1,000 sq m and the new project will be 2,500 sq m, the additional building is 1,500 sq m.

Distribution of Additional Building — Who Gets What?

Additional building does not belong solely to tenants or solely to the developer. The law establishes a precise legal formula for distribution among the parties. In most cases:

• Original tenants — entitled to a portion of additional building based on their ownership percentage in the original property
• Developer/contractor — receives the remaining portion of additional building as consideration for executing the project
• Landowners who are not tenants — if any exist, they are also entitled to a certain portion

The exact distribution depends on the specific detailed plan, any agreement between the parties (if one exists), and the planning committee's decisions. Each case has unique circumstances, which is why it is very important to review the documents of your specific project.

Building Addition Calculation Formula — How Is It Actually Calculated?

Calculating building additions is not a matter of guesswork or general estimation. There is a legal and technical formula that determines rights. However, the formula itself varies depending on the provisions of the detailed plan and the type of project.

Basic Calculation Steps

1. Determination of Existing Building Area — Accurate measurement of every square meter in the original buildings, including floors and common areas
2. Determination of Planned Building Area — According to approved TAMA 38 plans, including new residential units, public spaces, parking, and more
3. Calculation of the Difference — Building addition = new area minus old area
4. Division According to Type of Entitlement — Part for original tenants, part for the developer, part for public bodies if applicable
5. Translation into Real Space or Financial Compensation — In accordance with the agreement and court decisions

Often, the calculation also includes coefficients and adjustment factors such as:

• Common areas (stairs, elevators, shared balconies)
• Public spaces (parks, squares, dedicated to the public)
• Areas designated for public purposes (synagogue, community center, school)
• Discounts or additions due to special conditions in the plan

Practical Calculation Example

Suppose an original building with an area of 3,000 m² with 60 apartments, and a new TAMA 38 project with an area of 6,000 m² with 100 apartments. The building addition is 3,000 m². If 40% of this addition belongs to the original tenants (based on their ownership share), they are collectively entitled to an additional 1,200 m². The developer receives the remainder (1,800 m²) as compensation for project costs.

However, this is only a general example. Each project is different, and the provisions in the detailed plan may be completely different. Therefore, it is very important to review the legal documents of your project or consult with an attorney specializing in TAMA 38.

Rights of Original Tenants in Building Additions

One of the most important issues in TAMA 38 is protection of the rights of original tenants. The law and administrative regulations establish several basic rights:

• Right to a Share of the Building Addition — Based on the ownership share in the original property
• Right to a New Apartment in the Project — Usually with an area similar to or larger than the original apartment
• Right to Compensation Payment — In some cases, if the addition is not translated into an apartment but into money
• Right to Participate in Decisions — Tenants can participate in decisions related to the project and object to unfair terms
• Protection from Abuse — The law prohibits developers from using force or pressure to compel tenants to waive their rights

In cases where a developer or contractor attempts to diminish the rights of tenants, or if there are disputes over the calculation of the addition, the dispute can be referred to an appeals committee or court. Our firm represents tenants in renewal projects and helps them protect their legal rights.

Types of Compensation Related to Building Additions

When discussing compensation in the context of building additions, it is important to distinguish between several types of compensation, as each has a different legal structure:

1. Compensation in the Form of a New Apartment

In some projects, original tenants are entitled to a new apartment in the renovated building, in place of their original apartment. The new apartment should be of similar or larger area, and in similar or better conditions. This is considered "compensation in kind" — meaning an actual right to a property, not just money.

2. Monetary Compensation Based on Building Addition

If tenants are not interested in a new apartment, or if the plan does not allow all tenants to remain in the project, they may be entitled to monetary compensation based on their share of the building addition. The compensation is calculated according to the market value of the building area or based on an agreement between the parties.

3. Compensation for Disruption or Inconvenience

During project execution, tenants may suffer from noise, dust, movement disruptions, and other nuisances. In some cases, they are entitled to additional compensation for these issues. The compensation depends on the specific conditions and agreement with the developer.

4. Compensation for Legal Fees and Consultation

If tenants need to hire an attorney to protect their rights or to object to project decisions, they may be entitled to compensation for these legal expenses, subject to a court decision or agreement.

Comparative Table: Different Building Addition Scenarios

Note: This table is for illustration purposes only. Each project is different, and actual calculations depend on the detailed plan, agreements, and legal decisions.

Common Mistakes in Calculating Construction Addition and How to Avoid Them

During years of representing tenants and contractors in TAMA 38 projects, we have seen many mistakes that could have been avoided. Here are the most common errors:

Mistake 1: Assuming the addition is split equally between tenants and the developer

This is one of the most common mistakes. Tenants assume the addition is split exactly in half (50%-50%), but in practice the distribution depends on the detailed plan and agreements. In some projects, tenants receive less, in others more. It is important to review the documents.

Mistake 2: Forgetting to include common areas

When calculating the construction addition, you must also include common areas such as stairwells, elevators, machine rooms, shared balconies, and parking spaces. Errors in calculating these areas can significantly affect your rights.

Mistake 3: Failing to account for public spaces

If the plan requires allocation of public spaces (park, plaza, easements), part of the construction addition may be designated for public use and not for distribution between tenants and the developer. This affects the final distribution.

Mistake 4: Signing an agreement without understanding it

In some projects, tenants sign agreements with developers without fully understanding the implications. This can lead to waiving rights without being aware of it. It is always important to consult with an attorney before signing.

Mistake 5: Failing to monitor changes to the plan

Often, plans change during the course of the project. Areas may change, the number of units may change, and this affects the construction addition. It is important to monitor these changes and understand their implications.

Additional Legal Rights in TAMA 38

Beyond the construction addition, tenants have additional legal rights in urban renewal projects:

• Right to temporary housing — If tenants must vacate during construction, the developer must provide them with temporary housing or pay rent
• Right to compensation for moving expenses — Costs of moving from the original apartment to temporary housing and back
• Right to update the value of the apartment — In some cases, tenants are entitled to an update of their apartment value according to construction costs
• Right to participate in oversight committees — Tenants can participate in verifying construction quality and implementation conditions

How Our Firm Can Help You

Our firm, Mandelboyims, Gor, Witzman-Gor and Co., Attorneys at Law, specializes in real estate and property law, including Tama 38 projects and urban renewal. With over 15 years of experience in this field, we help tenants, contractors, and developers understand and protect their legal rights regarding building additions.

If you are an original tenant in a Tama 38 project in Petah Tikva, Ramat Gan, or other cities in Israel, and you want to understand your rights regarding building additions, we are here to help. We can:

• Review your project documents and clearly explain your rights
• Represent you in discussions with the developer or contractor
• Review agreements before you sign them
• Protect your rights if a developer attempts to diminish them
• Pursue compensation for breaches or damages

Our first consultation meeting is at no cost. We believe that everyone is entitled to quality legal advice, and we want to get to know you and understand your needs before you decide to engage our services.

You can leave your details using the form on this page, or call us directly at our Ramat Gan office. We would be happy to help.