Snubbed by the state, Jerusalem residents try to buy back their homes from developers

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Dozens of Jerusalem residents whose homes were built on church-owned land plan to repurchase their properties after giving up hope that the government or the Jewish National Fund would step in to ensure that they do not lose their property rights in another 30 years.

The plots, which were leased to the JNF by the Greek Orthodox Church and the Catholic Church some seven decades ago, were sold to a private company a decade ago. Residents are now having to negotiate with the company to purchase their homes again before the lease agreement expires.

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So far, the government has not announced any solution to the problem, which affects more than 1,000 families living in the city.

Sources said dozens of residents in the Rehavia, Talbieh and Nayot neighborhoods have negotiated agreements with the company, Nayot-Komemiyut Investments, to pay 28 percent of their home’s market price. In most cases, this is over a million shekels ($310,000).

Under the agreements, the price rises by 0.2 percent a month, meaning that in 30 years, when the leases expire, the sum will reach 100 percent of the market price. In exchange, the residents receive full ownership of the land and the house.

Emil Salman

“At first I advised people to wait,” said property appraiser Kobi Bir. “Now it’s pretty clear that the government is not going to intervene, and that with each passing day the company’s rights grow and the rights of the residents shrink. I’m therefore advising them to close [a deal].”

Attorney Jonathan Zvi, however, said that purchasing the land rights from the developers is a mistake.

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“These people have fallen prey to fraud,” he said. “The Israel Land Authority has a responsibility toward the residents, and they have a right to extend the lease. If it ultimately does reach an agreement, then what did they buy? Air.”

He said the Knesset must pass legislation protecting leases against developers and land owners.

The battle over the church-owned land in Jerusalem began five years ago, when residents discovered that Nayot-Komemiyut had purchased the leasing rights and later obtained full ownership of the plots.

Most of the homes were built on land leased from the Greek Orthodox Church in the early 1950s. Under the agreement signed at the time between the church and the JNF, if a lease is not renewed, the land and all the homes built on it will be returned to the church when it expires. In most cases, the leases expire in 2050 or 2051, but on some Rehavia properties, it ends in 2034.

When the sale of the property rights was discovered, prices of homes built on the land plunged, selling at 30 percent less than similar properties. The best known sale completed in the shadow of the crisis is Sherover House, near the Jerusalem Theatre, which was sold for 70 million shekels – approximately 60 percent of its original asking price.

Plummeting prices prompted the residents to organize and demand that the government and the JNF take action. The residents say that most of them bought their homes not knowing that they sat on leased land. In several cases, residents have sued the lawyers who advised them on the purchases for negligence.

In response, politicians and government officials have sought a solution to the problem.

Talbieh neighborhood. The tenants claim that most of them bought the apartments without knowing that they were leasing the landEmil Salman

Former Knesset Member Rachel Azaria introduced a Church Land Law that would have made it difficult to sell church land to private developers. But the legislation ran into opposition from churches in Israel and abroad, and even caused the Church of the Holy Sepulchre to briefly shutter its doors in protest. The international pressure caused the bill to be abandoned.

At the same time, then-Justice Minister Ayelet Shaked formed a committee to examine the matter. The panel, which was headed by Assistant Attorney General Erez Kaminitz, convened several times, and Kaminitz met with the residents. But the committee was disbanded before it made any decisions.

Meanwhile, the JNF and the Jerusalem municipality promised to act and tried to stop ownership from being transferred to Nayot-Komemiyut Investments, but failed.

In response, the Justice Ministry said that not only did the committee meet with residents but also with attorneys representing the companies that had bought the church land.

“As part of the teamwork and consultations with the minister’s bureau, it was agreed that in order to avoid a sweeping legislative arrangement … while simultaneously developing a more focused government legislative arrangement, which can be pursued as needed,” the spokesman added.