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TAMA 38 Buildings: What to Check Before You Buy

Q: Is TAMA 38 still in force?

Its status has changed and is subject to expiry decisions, transitional provisions and municipal replacement plans. Check the position for the specific site with the local planning committee at the time you buy; do not rely on general statements.

Q: Do I get the same guarantees as in a regular new-build?

If you buy a new apartment from the developer, the Sale (Apartments) Law and the Assurance of Investments Law apply to that sale. If you buy an existing apartment from an owner, your protection comes from the owners' agreement with the developer, which can be weaker.

Q: Who pays the betterment levy in a TAMA 38 project?

It depends on the plan that grants the rights and on the contract between the owners and the developer. Ask for the written allocation before you sign.

Apartment building with steel reinforcement and a new floor under construction

TAMA 38 is Israel's National Outline Plan for strengthening existing buildings against earthquakes. It allowed developers to add floors and units in exchange for reinforcing a building, in two tracks: strengthening the existing structure (often called TAMA 38/1) and demolishing it to build anew (TAMA 38/2). The plan has been phased out at national level and replaced in many cities by municipal alternative plans, with transitional rules for projects already in the pipeline. Before buying an apartment described as a TAMA 38 property, you must find out which track applies, what stage it is at, and whether the legal basis still exists for it.

Why the plan's status matters more than its name

Because TAMA 38 is a national plan under the Planning and Building Law 5725-1965, its validity, expiry and the transitional arrangements for pending permits are decided by the national planning institutions and can change. Many local authorities have adopted their own plans that replace it with different rules on floors, density and contributions. A project marketed under the TAMA 38 label may in fact rely on a local plan, on transitional provisions, or on nothing yet. Ask for the plan number and the permit status in writing and have your lawyer confirm the position with the local planning committee as of the date you sign.

Strengthening track: what you are buying

In a strengthening project the existing building stays. The developer reinforces the structure, usually adds an elevator and safe rooms, extends existing apartments and builds new apartments on top or beside the building. You may be buying one of the new apartments or an existing one that will be extended.

Existing owners keep living in the building during the works; expect noise, dust and disruption for the duration of construction.
The new apartments sit on an old foundation and old infrastructure; ask what was replaced and what was only reinforced.
The apartment's registration may be complicated because the building's condominium registration under the Land Law 5729-1969 has to be amended to add units.
The developer sells the new apartments and is a seller under the Sale (Apartments) Law 5733-1973 and the Assurance of Investments Law 5735-1974; check which guarantee you receive.

Demolish-and-rebuild track: what you are buying

In a demolish-and-rebuild project the old building comes down and a new one goes up. Existing owners move out, receive rent during construction and return to new apartments. The result is a new building, but the path to it is longer and depends on every owner vacating.

If you buy an existing apartment, you inherit the owner's agreement with the developer and its obligations to vacate, similar to a pinui-binui purchase.
If you buy a new apartment from the developer off-plan, your contract depends on the developer obtaining vacant possession of the whole building and a permit.
Ask what happens to your money and your contract if a single owner refuses to vacate or the permit is refused.
Check the security given for rent and for the new apartment, and whether it is a bank guarantee.

Documents to request before signing

The approved plan and the building permit, or the permit application and its status.
The agreement between the existing owners and the developer, including the signature list.
Any municipal alternative plan that applies to the site and its effect on floors and rights.
The developer's confirmation of which Assurance of Investments Law security applies to your payment and when it is issued.
The specification (mifrat) of your apartment and the common areas.
The betterment levy position; who pays it under the Planning and Building Law depends on the plan and the contract.

Common mistakes

Assuming the TAMA 38 label means a permit exists.
Not distinguishing between the strengthening and demolish-and-rebuild tracks when comparing prices.
Buying an existing apartment without reading the owners' agreement with the developer.
Underestimating registration problems when new units are added to an old condominium.
Treating a developer's promise of rent during construction as a guarantee without security behind it.

FAQ

Is TAMA 38 still in force?