Registering and Changing Bylaws for Multi-Family Housing Complexes in Israel / Ohad Shpak
The most important and also most useful document in any multi-family housing complex in Israel is its bylaws (“Takanon Bayit Meshutaf”). The complex may have an agreed-upon set of bylaws but if it doesn’t, it is subject to the common bylaws provided as an appendix to the Israeli Land Law.
Bylaws detail regulations for managing the complex’s facilities, assembly of unit owners and representation of the complex. Every complex operates according to a set of bylaws that regulate interactions between unit owners, as well as their rights and obligations in regards to the complex.
The bylaws and any related changes to them may be registered, but this is not a requirement.
Registration of the building’s bylaws
Registration of the bylaws grants them power and extend their validity to future unit owners. Registration of bylaws in the Land Registry is intended to ensure public participation.
When bylaws are registered – everyone knows the content (in practice), or is considered to be knowledgeable of it (constructive knowledge, presumption of knowledge even if not in practice).
Registering the bylaws extends their applicability beyond the signatories, although even an agreed-upon set of bylaws that is not registered obligates its signatories. The common bylaw do not require a registration procedure.
A complex which is not registered has, by extension, not registered its own bylaws and the common bylaws automatically apply to it.
Bylaws and new buildings that are not registered in the Land Registry
With complexes that are not registered but for which agreed-upon bylaws have been prepared, challenges often arise. For example, complexes in which the contractor or its legal representative have prepared a bylaw agreement, and even included it in the sales contract, operate in practice according to the agreed-upon bylaws even though the complex is legally subject to the common bylaws until it has been registered. This creates duplication and lack of clarity. In this situation, there are agreed-upon bylaws, which are not registered but are planned on being registered, and they are sometimes even attached to the sales agreement; yet on the other hand, by virtue of the law, the common bylaws apply to the complex. As such, the common bylaws and the agreed-upon bylaws seemingly exist in parallel and contradictions between them may occur.
Take, for example, the method for paying association fees (“Vaad Bayit”). When contradictions occur – the common bylaws apply. Any decision can be registered if voted upon by a majority of apartment owners with two-thirds of the common property linked to their apartment.
How to change the building’s bylaws?
The Land Law dictates that apartment owners may amend or change bylaws if voted upon by a majority of home owners with two-thirds of the common property linked to their unit.
It also states that the rights of apartment owners may not be dictated or changed in the bylaws, that debts or obligations may not be imposed on apartment owners in any format or amount not specified in the law without their consent, nor may any portion of common property be linked to a certain apartment without the consent of all the owners in the building.
No legal obligation for an assembly to convene in order to change the bylaws
The law does not obligate tenants to convene in an assembly in order to amend or change its bylaws and thus a majority can be obtained through signatures of home owners without assembly. However, since changing bylaws is an important and fundamental event, it is recommended that an open forum be conducted before a vote or signing takes place. When bylaws are changed, this should be registered with the Land Registry so as to ensure that the new regulations obligate future unit owners.