Careful legal structuring and negotiation to respond to a municipal demand
Situation
A major real estate project received a demand for a betterment levy of more than NIS 50 million. Under Israeli law, municipalities may claim 50 per cent of the increased value arising from additional building rights.
Our Role
Decades earlier, the municipality had agreed with a previous landowner to waive the levy in return for costly works. The Supreme Court later ruled such waiver agreements unlawful, meaning our client, the new landowner, could not rely on that earlier commitment. Instead of pursuing a waiver, we ensured a restitution claim against the municipality – for benefits it had already received – would not become time-barred. We then filed a monetary claim, creating leverage. The municipality ultimately agreed to a compromise in the form of a set-off, offsetting restitution against the levy demand.
Outcome
The NIS 50 million demand was settled for less than NIS 8 million, saving our client more than NIS 40 million. Through principled negotiation and a tailored legal strategy, we achieved a result that protected our client’s interests and delivered a fair and efficient resolution.