Building Addition in Tama 38 in Ramat Gan

What is Building Addition Rights in TAMA 38?

TAMA 38 (Special Plan 38) is an urban renewal program that permits the reconstruction of existing buildings in Israel. One of the most significant components of the program is the right to building addition — namely, the surplus building area that can be added to a project in addition to the original area of the existing building.

Under TAMA 38, when homeowners and developers construct a new building in place of the old one, they are entitled to build a larger area than the original building's footprint. This difference — the building addition — constitutes an economic principle that allows existing residents to profit from the investment in the project, while also encouraging contractors and developers to invest in urban renewal.

Over the years, Ramat Gan underwent significant renewal, with many TAMA 38 projects constructing new and modern buildings to replace old ones. As a result, understanding the right to building addition has become essential for residents and investors in the city.

How is Building Addition Rights Calculated?

Calculating building addition is not straightforward and involves several variables:

• Original land area — the area of the plot on which the old building stands.
• building coefficient (Floor Area Ratio — FAR) — the ratio between the total permitted built-up area and the land area. This coefficient is determined by the city's master plan and TAMA 38.
• Original building area — the total area of the existing building (usually measured in the property registry or engineering survey).
• Discounts and penalties — TAMA 38 may include discounts for existing residents, but also penalties in certain cases (for example, if the old building had certain irregularities or did not meet planning requirements).

Typically, building addition is calculated as follows: (land area × new building coefficient) − existing building area = building addition. However, in each case, the specific project documentation must be reviewed, including the binding urban renewal plan and the planning assessment report.

Rights of Existing Residents to Building Addition

In TAMA 38, the building addition does not belong solely to the contractor or developer. Existing residents in the building are entitled to a substantial share of the value of this addition. Typically, these rights are expressed in the following ways:

• Apartments in building addition — existing residents receive new apartments in the new project, some of which are allocated from the building addition.
• Monetary compensation — in some cases, instead of apartments, residents receive monetary compensation equivalent to the value of the building addition.
• Combination of both — often, the arrangement includes both apartments and additional monetary compensation.

However, it is important to emphasize that these arrangements vary from project to project and depend on agreements between residents, the developer, and local authorities. Over recent years, many legal disputes on this matter have reached courts due to disagreements over valuation calculations and the division of rights.

Conditions for Exercising the Right to Building Addition (TAMA 38)

For a building addition to constitute an enforceable legal right, certain conditions must be met:

1. Approved TAMA 38 Project Exists

The project must be formally recognized as a TAMA 38 project by the relevant local authorities and government ministries. Under TAMA 38, the local authority (for example, the municipality in Ramat Gan) issues an approval for project implementation, but coordination is required with the Ministry of Interior, Ministry of Construction, and additional ministries.

2. Consent of the Majority of Residents

Generally, TAMA 38 requires the consent of the majority of residents in the building (typically 80% or more, in accordance with regulations). This consent is expressed through the execution of an agreement between the residents and the developer. If such consent is not obtained, the project cannot commence.

3. Compliance with the City Master Plan

The project must conform to the master plan of Ramat Gan and planning and building regulations. If the project deviates from the plan, it may be necessary to modify the plan or obtain a special permit.

4. Conducting Engineering Inspections and Surveys

Prior to calculating building addition, precise engineering surveys of the existing building, area measurements, and verification of the original ground plans must be conducted. These surveys are based on information from the Taboo (Israeli Land Registry) and field measurements.

5. Updating the Taboo and Registration

When a building addition is calculated, the Taboo must be updated to reflect the new rights of the residents. This update is performed at the Land Registry office (RAMI) and requires precise legal documents and certificates from the developer.

Common Mistakes Regarding Construction Additions under TAMA 38

In fifteen years of experience in real estate law in Ramat Gan and the central region, we have seen many residents make critical mistakes related to construction additions. Here are the most common errors:

Mistake 1: Misunderstanding of the Right to Construction Addition

Many mortgaged residents believe that a construction addition is solely a developer's matter — that he will receive all the value. In fact, a construction addition is a shared right between residents and the developer. Residents are entitled to a significant share of this value, either in the form of additional units or monetary compensation. If you do not plan your rights from the start, you may lose considerable money.

Mistake 2: Signing an Agreement Without Legal Consultation

TAMA 38 agreements are complex legal documents, and signing an agreement without thorough legal review can lead to loss of rights. We recommend a full review of every agreement before signing.

Mistake 3: Failure to Update the Land Registry in Time

After a construction addition is calculated, it is crucial to update the land registry in a timely manner. If you do not register your rights in the property register, you may have difficulty proving your rights in the future, especially if a dispute arises.

Mistake 4: Failure to Review the Renewal Plan

Often, urban renewal plans contain special conditions or deductions that affect construction addition calculations. If you do not review the plan yourself (or with an attorney), you may miss important details.

Mistake 5: Failure to Consult with the Developer on Market Values

When a construction addition is calculated, it is important to understand what the value of this addition is in the real estate market. If you are receiving units as a construction addition, it is important to check whether the value of the units you received matches the value of your addition. This issue can only be resolved with integrated legal advice and economic consultation.

Mistake 6: Failure to Prepare Required Documents

In order to update the land registry and complete registration procedures, many documents are required — engineering surveys, plans, municipal approvals, and more. If you do not prepare the documents in time and efficiently, the process will be prolonged and you may incur additional costs.

Comparison: Different Building Addition Scenarios

To better understand how building additions work in practice, let's examine three different scenarios:

As can be seen, calculation of building additions and their distribution depend heavily on the project details. Each project is unique, and it is important to obtain legal advice tailored to your specific case.

Legal Consultation on Building Additions — Why Is It Important?

A building addition under Tama 38 is one of the most complex issues in Israeli real estate law. This is because it combines law, urban planning, economics, and numerous legal technicalities. A small mistake in calculation or in an agreement can lead to a loss of tens of thousands or even hundreds of thousands of shekels.

In the city of Ramat Gan, in recent times, there have been several Tama 38 projects that led to legal disputes between residents and developers. Some of the disputes concerned building addition calculations, some to fair distribution among residents, and some to land registry updates. In all of these cases, early legal consultation could have prevented many problems.

Our firm, Mandelbaum, Gur, Witzman-Gur & Co., has more than 18 years of experience in real estate law in Ramat Gan and the central region. We have represented residents, developers, and property owners in numerous disputes related to Tama 38, building additions, and rights distribution. Our expertise enables us to provide in-depth and focused consultation on this subject.

If you are a resident in a building that has entered Tama 38, or you are a property owner considering urban renewal, we invite you to a free initial consultation meeting. In this meeting, we will review your property, explain building addition rights, and help you understand the next steps.