A zoning plan affecting a parcel of land on which an existing building stood was amended to permit the demolition of the old structure and the construction of a new 24-story residential tower.
One of the apartments in the original building was held under a 999-year lease. The legal issue was the extent of the lessees’ rights in the new development.
Two possible approaches were considered:
The lessees would receive an apartment in the new building equivalent in size to their existing apartment; or
The lessees would receive a share of the new tower proportionate to their relative interest in the original building, including the benefit of the additional building rights.
The Supreme Court of Israel examined the scope of the rights conferred by a 999-year lease and considered whether such a lease should be treated as equivalent to ownership.
The Court held that the lease agreement itself determines the nature and extent of the lessees’ rights. A long-term lease—even one for 999 years—does not automatically confer the same rights as ownership.
In the case before the Court, the lease agreement did not grant the lessees any entitlement to future building rights or to the additional development potential created by the amended zoning plan.
Reference: Civil Appeal 297/16, Ziona Schlossberg et al. v. Yaffa Hod et al.
