Many of you may have heard of TAMA 38 projects. For those of you that haven’t, I will give a brief explanation. In a previous blog post, I explained about different types of urban renewal projects. I mentioned TAMA 38. The word TAMA is not a word but rather the first letters of three Hebrew words that mean National Town Plan. The number 38 refers to the number of National Town Plans that were passed by the National Town Planning Council up to that point.
Tama 38 was passed due to a growing fear that many buildings built before 1980 may not withstand an earthquake in Israel. There have been devastating earthquakes in Israel in the past. An earthquake in 1927 did extensive damage to the cities of Tzfat, Ramle, Lod, and Nablus. An earthquake in 1837 destroyed Tzfat. In the year 749, an earthquake destroyed the cities of Beit Shean and Sussita in the northern part of the Land of Israel. The earthquake that hit Turkey and Syria in February 2023 was felt in some parts of Israel.
Israel sits on the African Syrian Faultline and so, experts say that another earthquake is just a matter of time.
What is TAMA 38?
IN 1980 the building standards were changed to protect buildings from falling in the event of an earthquake. Therefore TAMA 38 applies to buildings built before 1980. This National Town Plan allows for the strengthening of buildings in various ways. In many cases, this includes digging under the building strengthening the foundations, and building a parking lot and storage area below. It usually includes building safe rooms (which are built with reinforced concrete) to the sides of the buildings.
The owners of the original apartments pay nothing. The costs of the strengthening work are paid by the construction company in return for the permission to build extra floors to the building, and sell those apartments.
The Status of the New Apartments
The new apartments that are built above the original building have the same status under the law as new apartments built in a regular construction project. The construction company is required to give the buyer bank guarantees for the money paid. The construction company gives a warranty for the quality of the construction and the fulfillment of the construction of the apartment in accordance with the plans and the technical specifications. For more information about buying from a construction company, I refer you to some of my previous articles.
The Status of the Existing Apartments in the Building
The owners of the existing apartments are greatly rewarded for allowing this project to go through.
The owners sign a contract with the construction company which sets out what they will receive. It very often includes an extra room. This extra room is usually the safe room because safe rooms were not built for every apartment before 1980. Communal fallout shelters were built adjacent to the building or in the basement. Today every new apartment includes a safe room against missiles. They are built from reinforced concrete and closed hermetically by metal shutters and doors.
The owners may receive another porch, a parking spot, or a storage unit. They also receive an upgrade to their electric and plumbing systems and a new lobby, among other upgrades. They do not receive a renovation of the inside of their apartment. Their kitchen remains the same. Their floors remain the same.
What Happens When One of the Older, Existing Apartments Are Sold?
When the older, existing apartments are sold during or after the TAMA 38 project your Israeli real estate attorney will have more work to do. This includes the following:
- Reviewing the TAMA 38 contract signed between the existing apartment owners (which of course will include the seller of the apartment) and the construction company to see what the apartment shall receive under the TAMA 38 project.
- Doing a comprehensive title search to ascertain how the registration of the condominium will be amended to include the new apartments added to the building and the new areas that will be added to the apartment in question.
- Make sure of the building permit by hiring an appraiser to do a report.
- Ascertaining the undertakings of the construction company to facilitate the above registration.
- Reviewing the sales agreement between the seller and the buyer and making sure the relevant changes are made to ensure the protection of the purchaser’s rights under the TAMA 38 agreement.
- Advising and reporting to the tax authorities.
- Transfer of title at the close of the transaction.
TAMA 38 projects are a good positive thing and they are changing the face of many Israeli cities.
However, before buying an apartment in a TAMA 38 project, it is also important to ascertain how this project will influence the neighborhood as it is bringing about a rise in population in an already existing neighborhood. Will there be added traffic jams because of the increase in cars? Will there be enough municipal services for the new population (schools, kindergartens, clinics, etc.)?
All this needs to be considered by the buyer. Message me if you have any questions!
