Real Estate, Planning and Construction Lawyer
Parcel in real estate
Parceling is a common practice in real estate, in which lots and lands are redistributed in order to achieve accurate registration and to regulate ownership – by consolidating and redistributing ownership among relevant parties.
Most often, this process is necessary when an issue with the land has been discovered and the existing distribution is incorrect or adversely affecting the value, and sometimes the issue arises as a result of a procedure for dissolving a partnership in the land when a distribution in kind has been made. As a matter of fact, in most cases, regulating the registration of a land can enhance the value of the assets on it for the owner, if such regulation takes place.
By Igal Mor, Adv. & Notary
Accuracy in Legal Advice. Excellence in legal support.
In most cases, the parceling process occurs when a certain lot is designated for a certain project or when an outline plan for it has been made, within which properties with a smaller total area will be constructed. This procedure is primarily applied to owners of land, as it improves the value of their property. However, this is not the only benefit it offers.
When the land is not registered as the property of the owner in the land registry, the properties that are built there will not also be registered as the property of the owner. As the procedure for registering real estate in the tabu can take years, such cases are not uncommon. In reality, parceling is a short-cut, since the land must first be legally surveyed and registered. As a result, the owner of the property can take out a mortgage relatively easily, its value will increase, and it will be easier to sell.
It establishes legal certainty regarding the property’s status as well as the owner’s status. The certainty of ownership is of particular importance when it comes to the ownership of a property that is held jointly by several parties (suspended). Moreover, the procedure is valuable to banks, since it produces a registration in Tabu that allows them to pledge the property and provide loans against it. Additionally, the procedure is beneficial to banks, as it enables them to pledge the property and provide loans against it, since the registration is produced in Tabu.
Land Registry requirements for registering parceling procedures
Prior to proceeding with the parcelling procedure, several steps must be taken. First, pursuant to section 137 of the Planning and Construction Law, a detailed plan must be submitted for approval to the local planning and construction committee, including the new boundaries of the sub-plots that will be created as a result of the procedure. Additionally, the plan must be approved by the Israel Mapping Authority. As part of the application process for land registration, several documents need to be presented to the land registrar – an application for land registration signed by the applicant and by an attorney on his behalf, in accordance with the land registration regulations; 2 drafts of the intended plan drafted and signed by a licensed surveyor; a general description of the land form signed by the Israel Mapping Center; and tax approvals.
Implementing a parceling process
There are four main stages involved in parceling:
- The consolidation of the lands into one large area.
- Re-planning of the late land for a more accurate distribution in the future.
- Organizing the land according to the plan into sub-plots based on the number of owners and their relative share of the property. This division is based on the principle that each owner of the property is entitled to a share based on the value of his relative share of the property in its previous state.
- The tabu should be updated with all new subplots according to an orderly numbering system, and the historical plots from the previous division should also be saved.
In order to complete the process, an up-to-date tabu draft of the property must be produced, if such exists; a copy of the registration plan (the relevant outline plan); a copy of the registration notice from the Israel Mapping Center, another copy thereof; an application for the registration of the lessees of the land, if any; a request for registration of the signature by the Israel Lands Authority; registration documents, if necessary, as well as approvals for the differentiation of notes and encumbrances.
Parceling, both voluntary and involuntary
Parceling is usually advantageous for the owners of the property. As a result, it is a voluntary parceling that is initiated by the landowner and carried out at his or her own initiative, as well as the tenants for generations, without any objections. The procedure is carried out in accordance with Chapter 4 of the Planning and Construction Law, 1965.
Even though land owners are interested in land parcelization, they are not always interested in the process. As a result, land parceling may be involuntary – it is initiated by the local authority and the landowners are not parties to the process due to urban construction plans that require land reorganization, or by individuals whose neighbors are not interested. This can be accomplished, among other things, through eviction-construction procedures and expropriation of land. If objections arise, it is important to seek legal advice from a real estate lawyer who specializes in planning and construction.
Regardless of the case, both procedures will be conducted by a person authorized to measure the land on behalf of the local authority in cooperation with the Israel Mapping Center.
Costs associated with parcelization
There are a number of costs associated with the parceling procedure, which are borne by a variety of different parties. It is accomplished by a number of professionals – an appraiser, a lawyer specializing in real estate and real estate taxation, a surveyor on behalf of the local authority, and many others, all of whom charge a fee for their services. In addition, there are fees and levies to be paid in accordance with the procedures outlined in the Real Estate Regulations (fees), 1974.
- Registration fee – NIS 134 will be paid by the property owner for each subdivision that is re-registered in the land registry, and this at the time of registration (whether it is created as part of the division of the land or whether it is canceled in its reunification).
- The Israel Land Authority receives 29.25% of the land value as capitalization fee.
- Improvement levy – a tax payment of half of the improvement value of the property after the parceling process, to the local planning and construction committee.
- Tax on purchase – a tax that must be paid if necessary, usually when the parceling of property is regarded by the authorities as part of a real estate transaction. This occurs when there is a change in the distribution of property rights following a parceling operation.
In Conclusion
Parcelling procedures may involve a lengthy approval and execution process. If a subdivision occurs involuntarily (a merger or division without the owner’s consent), further challenges will arise that will further complicate the process. For legal advice on matters related to subdivision, we invite you to contact us.
Real estate, planning, and construction at Adv. Mor & Co. is a department that has a great deal of experience in both real estate transactions and planning and construction procedures.
Professional legal support is the value that leads the firm in real estate transactions and planning and construction procedures, and this in order to bring both to the desired and most efficient result for the client.
We can help you with real estate issues when you contact us by phone at 02-595-3322, via WhatsApp at 050-441-1434 or using the online contact form below.
Registrar of land distribution
137. Owners of land to which an approved plan applies and does not include the division of land can submit a draft for approval to the local committee for approval. The district committee will not issue a building permit until a land division deed (hereinafter referred to as a deed) has been approved, or if there is no such deed, the district committee consents to the division of the land.
