What is TAMA 38 in Petah Tikva?

What is Tama 38 and Why is it Important for Residents in Petah Tikva?

Tama 38 (Special Plan for Renewal) is a national program that enables urban renewal of old apartment buildings through evacuation and reconstruction. The program allows apartment owners (residents) in an old building to renew their homes — either by returning to a renovated apartment in the new building, moving to a new apartment in another building, or receiving substantial financial compensation. In Petah Tikva, a city where many buildings have reached an age requiring structural reinforcement or complete renewal, Tama 38 becomes a real and vital issue for dozens of families.

The program's goal is not only to renovate old housing but to achieve qualitative improvement in the urban environment, building safety, and living conditions for residents. However, the program is significantly complex — it involves legal procedures, negotiations with developers, calculations of rights, and various claims by residents. Without careful legal advice, residents may lose rights or receive compensation lower than they deserve.

Our firm, Mandelbaum, Gor, Witzman-Gor and Co., Attorneys at Law, has been handling Tama 38 and urban renewal since 2008. In Petah Tikva, we represent residents at all stages of the process — from the initial stage of understanding their rights, through negotiations with the developer and the apartment owners' committee, to signing the final agreement and the process of receiving the new apartment.

What is Tama 38 in Simple Terms?

Tama 38 is a program of the Ministry of Interior and the Ministry of Construction that allows owners of old apartment buildings to replace the old building with a new one under special conditions. Apartment owners (residents) have been granted clear legal rights under the program:

• Right to Return to an Apartment in the New Building — housing of similar or better size and quality, at no additional cost (except for optional contributions for improvements).
• Right to Sell the Right — if the new housing is not suitable, the resident may sell their return right to the developer or a third party.
• Right to Financial Compensation — if the resident chooses not to return and not to sell the right, they are entitled to financial compensation in accordance with the market value of the original apartment and special conditions.
• Right to Temporary Housing — during construction, apartment owners are entitled to alternative housing at a reduced or fully subsidized cost.

Why are Structural Reinforcement and Safety Reinforcement Related to Tama 38?

Old buildings in Petah Tikva, especially buildings from the 1960s–1990s, sometimes require structural reinforcement because they do not meet updated building codes, particularly regarding resistance to seismic activity. Israel's building laws require reinforcement of existing buildings if they do not meet these standards. In many cases, structural reinforcement is so costly and complex that residents cannot finance it themselves, or the cost significantly impacts the building's budget. Under these circumstances, Tama 38 becomes an attractive solution — a developer is willing to build a new building, and residents receive new, safer housing.

Who is Entitled to Rights Under Tama 38?

Tama 38 rights belong to registered apartment owners in the land registry (property registry) of the apartment at the time the project is defined as a Tama 38 project. These rights also apply to long-term tenants under certain conditions. It is important to note — if apartment owners have passed away or the apartment has been inherited, the rights transfer to heirs or trustees according to inheritance law. If the apartment was mortgaged, the bank has rights according to the mortgage agreement, and typically the bank must approve any decision regarding the apartment in Tama 38.

Stages of the Tama 38 Procedure in Petah Tikva

The Tama 38 procedure consists of several legal and administrative stages. Understanding each stage is essential to ensure that residents receive all their entitled rights:

Stage 1: Declaration of the Project as a Tama 38 Project

At this stage, a developer or apartment owners' committee submits an application to the Petah Tikva Municipality (or the relevant local authority) for recognition of the project as a Tama 38 project. The application includes information about the building, apartment owners, the new construction plan, and the conditions under which the project will be carried out. At this stage, the Petah Tikva Municipality examines the project's compliance with the plan's conditions and issues (or denies) approval.

Stage 2: Agreement Between Apartment Owners and Developer

Following municipal approval, apartment owners (usually through an apartment owners' committee) engage in negotiation agreements with the developer. This agreement defines:

• Conditions for return to an apartment in the new building (size, location, quality).
• Financial contributions (if any) that apartment owners must pay.
• Compensation or discounts for those who do not return.
• Construction timeline and temporary housing.
• Specific rights of tenants during the project.

At this stage, professional legal counsel is essential. Our office represents residents at this stage to ensure that the agreement is fair, residents receive the maximum of their rights, and there are no hidden or problematic conditions.

Stage 3: Approval of the Majority of Apartment Owners

According to the Shared Housing Law, not all apartment owners must agree to the Tama 38 agreement. However, the law requires the approval of a certain percentage of apartment owners (usually 80% or more, depending on circumstances). If this percentage is achieved, minority apartment owners can be compelled to agree or receive mandatory compensation. This stage is typically carried out through a formal vote at the apartment owners' assembly.

Stage 4: Application for Land Registry Registration and Engineering Procedures

Following approval by the majority, the developer submits an application to register the project in the Land Registry and with the Land Authority. At this stage, engineering inspections are also conducted, building permits are obtained, and legal commitments are fulfilled (such as bank deposits for the benefit of apartment owners).

Stage 5: Construction and Temporary Housing

During the construction of the new building, apartment owners require temporary housing. According to Tama 38, the developer must provide or finance temporary housing. At this stage, it is important to ensure that the alternative housing meets standards and that payment is the developer's responsibility, not the residents'.

Stage 6: Receipt of the New Apartment and Land Registry Registration

Following the completion of construction, apartment owners who chose to return receive the new apartment. At this stage, an engineering inspection of the apartment is conducted, a receipt form is signed, and the new apartment is registered in the Land Registry in the name of the apartment owner. At this stage, it is necessary to ensure a thorough inspection of the apartment and the required documents.

Scenario Comparison and Rights Calculation in Tama 38

Each apartment is in a different situation under Tama 38. Below is a table comparing various scenarios and how rights are calculated:

How is Compensation Calculated in Tama 38?

Compensation calculation in Tama 38 is a complex process requiring legal and financial review. Generally, compensation is calculated based on:

• Market Value of Original Apartment — at the time of project approval as Tama 38.
• Additional Expenses — such as legal fees, appraisals, insurance, etc.
• Interest — on the compensation amount from the time of project approval until actual payment.
• Capital Gains Tax — if the apartment increased in value after project approval.

It is important to emphasize — this calculation is not straightforward and is subject to numerous legal disputes. Our firm carefully reviews each calculation to ensure that the resident receives the maximum rights to which they are entitled.

Risks and Common Mistakes in Tama 38

Despite the benefits of Tama 38, there are risks and mistakes that residents may make if they are not properly represented:

Risk 1: Unfair Agreement with the Developer

Some developers may offer unfair terms to residents, such as smaller apartments, additional payments, or alternative housing at high cost. If a resident signs an agreement without legal advice, they may lose significant rights. Our firm reviews every agreement before signing and advises on rights and obligations.

Risk 2: Incorrect Compensation Calculation

If a resident chooses not to return and not to sell the right, they are entitled to monetary compensation. However, this calculation may be incorrect if incorrect market values are used, or if interest and fees are not calculated properly. A legal review of the calculation can increase the compensation by tens of thousands of shekels.

Risk 3: Misunderstanding of Mortgage Rights

If an apartment is encumbered by a mortgage, the bank has rights under the mortgage agreement. The bank may offer different terms for Tama 38, or reject the project entirely. It is important to understand the bank's rights and coordinate with the bank on every step of the project.

Risk 4: Alternative Housing at High Cost

Under Tama 38, a developer must provide or finance temporary alternative housing. However, some developers may offer expensive housing or under poor conditions. It is important to ensure that alternative housing is financed by the developer and not by the resident.

Risk 5: Construction Delays and Project Completion

Construction of a new building can take years. During this time, residents may be exposed to delays, plan changes, or engineering problems. It is important that the agreement includes clear provisions regarding the schedule, penalties for delays, and resident rights in case of plan changes.

Risk 6: Waiver of Rights Without Understanding

Some residents may sign documents containing waivers of significant rights, without understanding the consequences. For example, waiving the right to alternative housing, or agreeing to low compensation. Our firm carefully reviews every document and advises on potential waivers.

Why is Legal Consultation Important in TAMA 38?

TAMA 38 is a complex legal program that requires thorough legal review at every stage. Without professional legal counsel, residents may lose significant rights, agree to unfair terms, or receive compensation lower than they deserve.

Our firm, Mandelbaum, Gur, Witzman-Gur and Associates, Attorneys at Law, has represented TAMA 38 residents in Petach Tikva since 2008. We review every agreement, participate in legal proceedings, and handle lawsuits when necessary. Our experience in real estate law, urban renewal, and litigation enables us to protect residents' rights effectively and meaningfully.

In Petach Tikva, our office is located at Yoni Netanyahu 8 and offers a free initial consultation meeting. During this meeting, we listen to your housing situation, review the agreements, and advise you on your options and rights. If you are a resident in a TAMA 38 project, we invite you to contact us for consultation.