Failed Attempt by Owners of Tel Aviv Building’s Basement to Convert Office Space into Apartments

The Tel Aviv District Appeals Committee recently set aside a building permit granted by the city of Tel Aviv to the owner of office space in a building designated for demolition under TAMA 38 who sought to convert the space to residential use. The Appeals Committee determined that the owner of the office space, the only one of 27 rights owners yet to have signed an agreement for the building to undergo TAMA 38, was not sincerely interested in realizing the permit for nonconforming use but rather wished to win greater consideration from the developer in negotiations for the project’s execution.

This project concerns two attached buildings at 27 and 29 Professor Shor Street in Tel Aviv. The buildings currently contain 26 residential units, with four offices on the basement level constructed under permit when the buildings were erected in the 1950s.

In 2015, the owner of the office space applied to the Local Committee for a permit for nonconforming use in perpetuity and the conversion of the space to four residential units. Although the application was opposed by the building’s apartment owners, the Local Committee approved a nonconforming use permit for the offices for a period of about ten years.

The apartment owners appealed this decision to the Tel Aviv District Appeals Committee, and claimed that the granting of nonconforming use permits may thwart the performance of a TAMA 38 project. They also argued that granting a permit for nonconforming use would create four additional apartments whose owners must be given consideration, which could undermine the economic viability of the project.

The Appeals Committee ruled in favor of the appeal and voided the Local Committee’s decision to permit the nonconforming use. The Appeals Committee found that an applicant for nonconforming use in a condominium does not hold the right to do with the permit as he pleases, and thus the application for a permit could not be granted and a decision as to the property dispute must be reached before the application in question could be reconsidered.

In light of all the tests established by various Appeals Committee decisions over the years in terms of applicants seeking nonconforming use permits, and in consideration of the outcomes of such tests – while also considering the fact that an application for the performance of a TAMA 38 project is being advanced in conjunction—the nonconforming use for residential units should no longer be permitted.