Urban Renewal
What Are Your Rights as a Tenant?
By Adv. Liron Yitzhak Elmaliach | Updated: 2026 | Reading time: approx. 7 minutes
Urban renewal projects in Israel — primarily Pinui Binui (evacuation-reconstruction) and Tama 38 — involve demolishing or significantly renovating existing residential buildings and replacing them with modern, larger ones. For apartment owners, these projects can significantly increase the value of their property. But they also involve complex rights and obligations that must be protected carefully.
What You Are Entitled to in a Pinui Binui Project
- ◆A new, larger apartment — Your replacement apartment must be larger than your current one (the law sets minimum increases). You receive a new apartment in the same building or complex, typically with an additional room.
- ◆Alternative housing during construction — From the day you vacate until you move into the new apartment, the developer pays your full rental cost in temporary housing of equivalent quality and location to your current home.
- ◆Moving costs — The developer covers all moving costs — both when you move out to temporary housing and when you move into the new apartment.
- ◆Storage costs — If your temporary housing is smaller, the developer covers the cost of storing items that do not fit.
- ◆Bank guarantee for all commitments — Every promise the developer makes — the new apartment, the rental payments, the moving costs — must be backed by a bank guarantee. Without this guarantee, the developer's promises are worthless if they encounter financial difficulties.
- ◆Tax exemptions — Apartment owners who participate in Pinui Binui are generally exempt from capital gains tax and purchase tax on their replacement apartment.
What to Demand from the Developer
What Not to Sign Without Legal Review
This cannot be stressed enough. A developer without a bank guarantee is asking you to bet your home on their financial stability over a 5–10 year project.
Developers sometimes ask apartment owners to sign preliminary agreements ("options") before the project has planning approval. These can lock you in to unfavourable terms without the certainty the project will proceed.
If a developer insists you use their lawyer, or offers to pay for a "shared" lawyer, this is a red flag. Walk away or insist on full independent representation.
Developer approaching you about urban renewal?
Free initial consultation — we will review the project terms and protect your interests throughout the process.