TAMA 38 - General Background
TAMA 38 is a national outline plan for strengthening buildings against earthquakes. Approved by the government in 2005. The goal of the plan is to encourage the strengthening of existing buildings against earthquakes. In March 2010, the government approved (as part of Amendment 2 to TAMA 38) the option of demolishing the existing building and building a new building under it, while maintaining the rights under TAMA 38.
Additional Amendments 3 to the plan regulated the building rights in demolition projects in more detail, and Amendment 3A to the plan was updated. In addition, the rights of the local committee were expanded and additional amendments were made.
Several amendments were made to the plan and supplementary legal provisions were enacted, the purpose of which is to include TAMA 38 additional buildings within the framework of the National Urban Development Plan and to encourage the implementation of the plan, a tax relief plan, and an exemption in the Planning and Building Law from the obligation to create parking spaces (which was carried out but later canceled by various planning committees).
Applicability of TAMA 38
TAMA 38 applies throughout the country to existing buildings for which the building permit was issued before January 1, 1980. These buildings do not meet the Israeli standard for earthquake resistance of buildings, subject to the opinion of a qualified engineer, in accordance with the provisions of TAMA 38.
There are exceptions to the application of TAMA 38, for example, buildings that according to the applicable city building plan, do not exceed 2 floors in height – including an encroached floor (column floor) and not including a partial floor on the roof – and whose area does not exceed 400 square meters of main and service space. For example, most private houses. There are detailed plans prepared in certain cities that exclude the application of TAMA 38 in relation to cases in which a house is actually built that does not exceed 2 floors in height and its area does not exceed 400 square meters, even if, according to the applicable city building plan for the building, a structure can be built exceeding the aforementioned size.
According to Section 23 of TAMA 38, a local and/or district committee may determine that due to the unique conditions of a settlement or parts thereof, it is required to adapt the provisions of TAMA 38 and approve a detailed plan aimed at strengthening buildings against earthquakes, which will limit the provisions of TAMA 38 and/or establish specific provisions that will change it in relation to that settlement or parts of. These provisions may change the provisions of TAMA 38 in relation to the following matters: construction areas, housing units, construction height, building lines, architectural design and parking standards.
Granting additional building rights to a building within the framework of TAMA 38
The government considered it of utmost importance to encourage the reinforcement of buildings that do not meet the earthquake resistance standard. The government also believed that very few buildings in Israel would be reinforced by the apartment owners themselves at their own expense, and therefore decided to provide an economic incentive for a building to be reinforced against earthquakes, which allows the apartment owners to sell the additional building rights in exchange for receiving construction services.
TAMA 38 grants additional building rights in a building to be reinforced against earthquakes, as detailed below:
1. Rights to expand existing apartments – up to 25 square meters per apartment (including the basement). The possibility of expansion is subject to the building lines determined in the plan.
2. Rights to build up to two additional floors on the roof, in the area of the expanded floor below.
3. Rights to build a partial floor on the roof in an area of up to half the area of the floor below.
4. Rights to build on the encroached floor (column floor).
By adding these rights, TAMA 38 allows for financing the strengthening of the building against earthquakes by selling building rights to the developer/contractor who carries out the strengthening of the building, and without any financial outlay for the apartment owners.
In accordance with the provisions of TAMA 38, when building rights under other plans are used within the framework of the project to strengthen the building against earthquakes, no more than the total rights specified above (two and a half floors on the roof and closing the encroached floor) can be added to the existing building. However, a detailed plan for strengthening buildings approved by the local committee in accordance with Section 23 of TAMA 38 can allow for an increase in building rights beyond that.
There are detailed plans approved by local committees in various places, which determine different building rights for buildings in certain cities or in certain areas of different cities.
For example, TABA 10038 approved in Jerusalem grants most buildings additional rights of a limited scope, more than 2.5 floors on the roof. Building rights are also determined according to the number of existing apartments, so that in the historic city, for example, in buildings with 14 apartments or more, it is possible to add 2 floors on the roof, and in buildings with fewer apartments, one and a half floors can be added to the existing roof.
In Tel Aviv, building rights are also determined by areas/quarters, with some buildings allowing a floor to be added to the roof and another floor set back in an area equal to two-thirds of an extended floor. In some areas, such as the New North and South Tel Aviv, it is generally possible to add two full floors plus an additional floor set back.
Building rights under TAMA 38/2 (Demolition and Reconstruction)
In accordance with the provisions of TAMA 38 (Section 14A), in a demolition and reconstruction project under TAMA 38, the following building rights can be used cumulatively:
1. The right to rebuild the building, including construction areas in accordance with the existing apartment area.
2. The rights granted to expand existing apartments under TAMA 38, including an additional 13 square meters of main area for each existing apartment.
3. If there are building rights remaining that have not yet been exercised in the building under a detailed plan applicable to it, these building rights will be added to the above rights, subject to the discretion of the local committee.
4. Additional construction areas in the amount of up to 3.5 new floors multiplied by the area of the existing floor expanded (existing floor plus 13 square meters per apartment)
5. Additional MMD for each existing and new apartment.
As part of Amendment 3A to TAMA 38, the local committee was given broad discretion with respect to the scope of building rights that can be obtained under TAMA 38.
Various municipalities have determined a different scope of rights than the above within the framework of a detailed plan that applies in the case of the implementation of TAMA 38. For example, within the framework of TABA 10038, the Jerusalem Municipality determined that the scope of new rights that can be added to the new building, in addition to the existing rights on the lot/building in addition to the expansion of the existing apartments, is 2.5 extended floors. It should be noted that the TABA was approved before Amendment 3A to TAMA 38 and in any case the detailed plan is the determining one.
In addition, the new building must comply, among other things, with the building height/storey limits applicable to the lot, as well as sometimes with the limits on the number of apartments in accordance with the permitted density in the urban development plan and/or determined by the local committee for TAMA 38/2 projects.
The work carried out within the framework of TAMA 38 projects
TAMA 38 project is a comprehensive and significant project. The project includes strengthening the building against earthquakes, renovating the building and renewing various infrastructures, adding an elevator, adding new apartments and usually also expanding the existing apartments (sometimes due to the proximity of the existing building to the lot boundary, the municipality does not approve this, but in most cases this is possible). Carrying out the project usually increases the value of the apartments significantly. Every building is of course different, but a typical TAMA 38 project (of strengthening an existing building) includes:
1. Strengthening the building against earthquakes – so that it meets the Israeli standard, according to a plan prepared by a structural engineer and approved by the local planning and building committee.
2. Adding an elevator shaft and elevator – sometimes it is possible to add an elevator shaft without making changes to the existing stairwell, but often in order to build the shaft, changes need to be made to the stairwell. Sometimes it is necessary to narrow the steps or the landing in the stairwell, or to demolish the existing stairwell and build a new one in its place, or to add an external elevator to the building or – when there is no choice – to take space from apartments to add the shaft, subject to the consent of the apartment owners (with compensation to these apartment owners).
3. Expansion of the apartments – subject to the possibilities in each building and economic feasibility, it is possible to propose within the framework of TAMA 38 the expansion of each existing apartment by an area of up to 25 square meters. When an apartment is expanded, it must include a utility room, if possible. It is also possible to add a sun terrace or an additional room or expand one of the rooms. In Jerusalem, Building Plan 10038 also allows for the closure of existing service balconies in addition to 25 square meters, provided that it is not a gabled balcony.
It is also generally permitted to add storage rooms if there is a column floor or areas that are no longer needed, such as an old shelter in the event that utility rooms are added to the apartments or a boiler room that is being canceled, but this also depends on the Building Plan (city building plan) applicable to the building.
4. Designing and renovating the building – includes a variety of things, for example:
Enlarging and renovating the lobby
Renovating the internal staircase
Exterior renovation of the building (with stone, acrylic plaster or a combination of them, according to the requirements of the municipality and the building design, when other cladding materials can also be incorporated)
Hiding exposed piping and air conditioners. In many projects, it is customary to move the air conditioners Laundry secrets
Installation of laundry secrets
Garden renewal including lighting and vegetation
Renovation of the shelter – unless it is canceled due to the addition of additional units to the apartments, in which case it can be converted into a warehouse, part of an apartment, etc.
Replacing utility cabinets in the stairwell with standard metal cabinets
Renovating the trash room or building a new trash room, as its location changes.
5. Replacing and renewing infrastructure –
Replacing the building’s shared water pipes
Replacing the building’s shared sewage system
Replacing gutters
Adding fire extinguishing installations according to the standard – including rollers, sprinklers, a fire extinguishing center, etc.
Replacing or adding fences
If there are wooden doors, they should be replaced with fireproof doors
6. Adding parking spaces – parking spaces must be added according to the parking standard applicable to the building. In some cases, a parking fee can be paid when parking spaces cannot be added. There are plots where it is even possible to add parking spaces to existing apartments.
Demolition and Reconstruction
Instead of reinforcing the existing building, the existing building can be demolished and a new building built in its place according to Amendment 2 to TAMA 38. The project is carried out with full banking support and as part of it, various guarantees are issued to the apartment owners, including, among others, a guarantee according to the Sales Law (Apartments) for the value of the new apartment as well as a bank guarantee to secure the rent.
As part of the project, the owners receive a new apartment (usually larger than the existing one), an open balcony, parking, sometimes a storage room and payment of rent for the entire period of the project.
In the case of demolition and reconstruction in most cities, there is a requirement from the municipality (or the urban development plan applicable to the building) to establish an underground parking solution.
There are buildings in which the building rights that can be obtained as part of the project are sufficient to make it economic, but in many cases the scope of the rights does not allow this. Therefore, each case must be examined on its own merits.
In any case, to the extent that the project is implemented, before the demolition of the building the developer will be required to obtain approval from a bank lending the project, which requires, as a measure, minimum profitability requirements in accordance with a zero report from an appraiser approved by the lending bank, as well as a deposit of equity in the lending account, which ensures very low risk for the apartment owners.
What is the majority required to implement a TAMA 38 project?
Amendment 3 to TAMA 38, from May 2012, together with Amendment No. 2 from June 2012 to the Land Law (Strengthening Condominiums Against Earthquakes), 5768-2008 dramatically improved the ability to approve TAMA 38 projects in the absence of the consent of 100% of the rights holders. Click here to review the provisions of the Land Law (Strengthening Condominiums Against Earthquakes), 5768-2008.
In light of the combination of the provisions of these two amendments, when there is the consent of two-thirds of the apartment owners (provided that two-thirds of the common property is adjacent to their apartments):
1. Parking spaces can be attached to the new apartments built within the framework of TAMA 38, which was not regulated in the law before Amendment No. 2 to the Land Law (Strengthening Condominiums Against Earthquakes).
2. In cities where it was possible to build an additional (second) floor by virtue of the Urban Development Plan, it is now possible to issue a permit for two and a half floors by virtue of TAMA 38 itself, and thus there is no doubt about the authority of the Supervisor of Condominiums to approve the construction of the additional two and a half floors when there is no agreement from 100% of the owners. In cities where the construction permit as part of the building reinforcement project will be granted by virtue of the Urban Development Plan, TAMA 38 states that such a permit is the same as a permit by virtue of TAMA 38. Therefore, it is reasonable to assume that the question of the authority of the Supervisor of Condominiums to approve the project even if it is by virtue of the Urban Development Plan will not be raised.
In demolition and reconstruction projects under TAMA 38, a majority of 80% of the apartment owners is required, provided that 80% of the common property is adjacent to their apartments.
According to the Land Law (Strengthening Condominiums Against Earthquakes), 5768-2008, in any case where there is no 100% agreement for a project under TAMA 38, in order to build new apartments in a building or to demolish it and build a new building, the opposing apartment owners must be sued by the Condominium Supervisor and receive his approval to carry out the project. The Supervisor will give the apartment owners an opportunity to present their claims. A claim can be filed with the Supervisor even before the building permit is issued, provided that a decision has been made by the planning authorities to approve the application for a building permit with conditions. This means approving the application subject to standard conditions for issuing the permit, such as payment of construction fees and charges. In the case of demolition and reconstruction, to the extent that the Supervisor deems it necessary to decide the claim, he may Appoint a real estate appraiser to prepare an opinion on the subject.
Restriction on registering a new sub-plot in the absence of 100% consent
1. Some developers are interested in carrying out the project with the help of banking support. One of the requirements for receiving banking support is that a new sub-plot (usually a warehouse, gas room, etc.) be registered in the building’s condominium registration order to which the construction rights will be attached (the plot is registered as owned by the existing apartment owners). As part of the banking support, the bank requires a lien on the construction rights, and this is only possible by attaching them to a new sub-plot.
2. In addition, the security that can be given to buyers of new apartments in the absence of a new sub-plot to which the building rights have been attached (unless a bank guarantee is provided according to the Sales Law) is mainly limited to caveats on the common property, in a transaction in which the condition for transferring the building rights to the developer is usually the completion of the project. Therefore, the protection of the apartment buyer through the registration of a caveat as mentioned is limited (unless a bank guarantee is provided according to the Sales Law). Not every potential apartment buyer is satisfied with such security
3. According to Section 8 of the relevant procedure of the Land Registration and Settlement Division of the Ministry of Justice (to download the text, click here), in order to register the new sub-plot, the consent of 100% of the apartment owners is required.
4. This means that a TAMA 38 transaction in which there is a majority of the apartment owners but not 100% entails additional difficulties, mainly regarding the ability to receive Banking support and the difficulties in selling new apartments.
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