A parcel of land on which a condominium (jointly owned building) has been constructed may have additional development potential arising from unused building rights under an existing zoning plan or from additional building rights granted under a new planning scheme.
This raises two important legal questions:
How is ownership of existing or future building rights allocated among the unit owners?
How should the newly constructed floor area resulting from those building rights be divided? (The issue concerns the allocation of rights among the owners of apartments, offices, storage units, and commercial premises within the existing condominium.)
Israeli courts have held that building rights are not included within the statutory definition of “common property”under the Real Estate Law. Nevertheless, the courts have consistently recognized that building rights have independent economic value and constitute an asset jointly owned by all unit owners in the condominium.
The courts have further ruled that each unit owner’s share of the building rights should be determined according to that owner’s proportionate share of the common property, which reflects the owner’s undivided interest in the underlying land.
Once the Condominium Order has been registered in the Condominium Register, the owner of each individual unit can determine their proportionate share of the building rights, which should correspond to the percentage of common property allocated to the unit they own.
