Adv. Dan Halpert, globes.co.il

On the margins of the Tama 38 agreements, the breach and cancellation clauses appear, and also an unimportantly important clause governing how disputes and disputes will be managed as they arise between the parties. Most of the time, the parties separate between engineering / planning disputes and other disputes concerning the parties' fulfillment of their obligations.

For engineering / planning disputes, it is customary to appoint an engineer who, in the event of a dispute, will discuss the parties' arguments and decide them within a short time so that the project is not delayed. Regarding disputes that do not concern the engineering / planning field, some of the agreement states that these disputes will be referred to a judicial tribunal and some determine that such disputes will be heard by an arbitrator.

The question arises who may be required to activate the arbitration mechanism? Is it imperative that all owners be required to operate the mechanism? Or are some landowners also allowed to operate it?

A similar matter was recently discussed by the Supreme Court as part of a hearing on a real estate transaction which is not a TAMA 38, but similar in its components to a TAMA transaction and therefore can be discarded for our purposes. Among the entrepreneurial company p.Luzon Properties and Investments Ltd. and its owners Real Estate Properties in Petah Tikva In 2014, a building and sharing agreement was signed on the basis of which an apartment project was established.

As part of the agreement, the entrepreneurial company undertook to finance the cost of establishing the project and it was stipulated that the rights holders would repay their share of the financing during the construction of the project and before they were given possession of apartments. At the end of the construction of the project, a dispute arose between the entrepreneurial company and the rights holders regarding the level of debt for financing the project.

There was a discussion between the parties that led to the signing of a settlement agreement. On behalf of all landowners, the agreement signed an attorney representing them in the transaction. However, two of the landowners protested the attorney's signature, claiming that she did not oblige the owner and even demanded that the arrangement be canceled and appoint an arbitrator in the dispute. The entrepreneurial company refused to appoint an arbitrator.

As a result, the two opposing owners petitioned the district court for a motion to appoint an arbitrator. The district court ruled that the owner's objection to the appointment of an arbitrator should be accepted even though they constitute only part of the entire owner, partly because the agreement states that the owners' charges are "together and separate."

The entrepreneurial company appealed to the Supreme Court, arguing that the district court's decision should be overturned because the arbitrator's appointment was not done as agreed by the parties.

The Supreme Court accepted the appeal and ruled that by virtue of the Building and Sharing Agreement, each and every one of the owners' individual rights and obligations exists. Some of these rights and obligations are uniform and shared by all owners (collectively), such as the right that the entrepreneurial company erects the building on the lot and the obligation to hand over the property to the contractor for the execution of the works. Some of these rights and obligations vary and are unique to each and every one of the owners (individual), such as the rights and obligations arising from ordering changes to a particular apartment by a single owner.

It was further held that the arbitration clause in the agreement also applies to disputes between the owner's owners and the entrepreneurial company, as well as disputes between all the owners of the entrepreneurial company, but the dispute between the opposing owners and the entrepreneurial company is not individual, but collective and therefore the requirement to operate the arbitration clause must be applied. All rights holders.

The Supreme Court ruled that the district court's decision is null and void, since under the circumstances the arbitration can only be held if the entire owner appeals for its existence and not when its existence is required by only two of the owners.