The Main Points of the Reform that Abolished Building Concessions – Amendment 134 to the Planning and Building Law

Introduction

On January 1, 2023, Amendment 134 to the Planning and Building Law, 5725 – 1965 (hereinafter, the “Law“) entered into effect, the main purpose of which is to cancel the vast majority of building concessions that can be applied for as part of a building permit. The purpose of the amendment, according to the amendment’s explanation, is to streamline the licensing process in issuing a building permit and to create certainty on the part of the developers and permit applicants so that the licensing process will deal with licensing and not planning. Hence, making the building permit process shorter and efficient.

Background

The original purpose of the building concessions was to facilitate the licensing process in cases where a specific amendment was required in the plan that was the basis on which a building permit was issued. So that instead of requiring a complete change of the plan itself, a matter that may take several years, the local authorities were authorized to approve concessions, and thereby hopefully saving a lot of time in the process.

A concession, as defined in section 1 of the Law, is “authorization to perform work that requires a permit under section 145, in deviation from the provisions of a plan or other regulations that applies to the place in question and which does not constitute use that is in violation” (emphasis is not in original).

The mechanism for concessions was intended to allow flexibility in the permit issuance phase in cases where there is a planning justification for deviating from the plan’s provisions. There can be justification for such deviation from a plan when it is necessary to adjust the valid plan to the features of the specific plot of land or when it is a very old plan that needs to be adapted to the actual reality.

Over the years, the use of concessions gained momentum and became so frequent that concessions within the framework of a building permit became a matter of routine, while licensing that conforms to the plan (without any applications for concessions) became the exception.

Thus, the use of the concessions actually became a bypass tool for the planning procedures and instead of the licensing process being short and efficient, the concessions mechanism turned it into a kind of additional planning procedure that complicated the process of obtaining the permit and delayed for many months and in some cases even years.

A prominent example of the use of the concession mechanism is an application for additions to the building area and the addition of residential units. In this context, we would like to clarify that in recent years, and due to legislative amendments (such as the “Sheves” regulations), the addition of residential units on a large scale has become possible within the concession mechanism. This state of affairs led the planning institutions to approve plans with fewer residential units or building area, since they anticipated in advance that applications will, inevitably, be made to increase the building area and the number of residential units as part of the concessions.

The main points of the amendment to the Law

As part of the amendment to the Law, sections 147(a) and section 151 were amended in a way that greatly reduced the authority of the local committee to approve concessions, in contrast to the state before the Law was amended, when the local committee basically had the authority to approve concessions in any matter that was not considered a significant deviation from the plan.

As mentioned above, a prominent example of concessions that gained momentum, especially in recent years, is the increase in the number of residential units and in the building area. Under the amendment to the Law, the committee’s authority is limited only to specific (and negligible) issues detailed in the regulations, when it was explicitly determined that the issues that were included within the framework of these regulations would not include additions to the building area or the addition of residential units.

Now, the concessions that local committees are authorized to approve have been reduced to minor issues such as: addition of an elevator shaft, a deviation from the front building line in accordance with most of the buildings on the street, the addition of a shelter or protected room, the addition of facilities for the treatment and monitoring of hazards and a limited number of other concessions.

Applicability of the amendment to the Law

New plans – any plan for which it was resolved that it be deposited from January 1, 2023:

In accordance with the transitional provisions established as part of the amendment to the Law, the cancellation of the concessions will apply to new plans for which it was resolved that they be deposited on or after January 1, 2023. These plans will be subject to the new amendment and, therefore, it will not be possible to apply for concessions under the old regulations that allow for significant deviation, but only under the new regulations and on the very limited issues stipulated in the regulations.

Plans that are not new plans – any plan for which it was resolved that it be deposited prior to January 1, 2023:

For those plans for which it was resolved to deposit them before 1.1.2023, the provisions set forth in the Law allow for applications for concessions to be made by virtue of the existing concession mechanism up to January 1, 2025. In this context, it should be noted that the amendment to the Law gave the Minister of the Interior the authority to extend the above-mentioned date beyond January 1, 2025, for periods not exceeding two years, if he finds that there is actual justification for this. It was further determined that an application for a permit that will be submitted by January 1, 2025 (or by the later date if it be so extended), may still continue to be reviewed.

Summary

The cancellation of the existing mechanism for concessions indicates a change in policy regarding the streamlining and speeding up of processes in the issuance of building permits. At the same time, it is not yet clear how the cancellation of the mechanism for concessions will actually contribute to streamlining the entire process.

The cancellation of the existing mechanism for concessions will require both the planning authorities and the developers and/or those applying for a permit to adapt and adjust to the new order. For example, applications for an increase in the building area and the number of residential units can no longer be made in the form of an application for a concession. It is, however, difficult to envision a situation in which developers will give up these additions easily. Therefore, as long as the planning authorities do not include additional building area and residential units in advance in the plans, developers will feel compelled to amend the plans that have already been approved instead of asking for additions as part of concessions, and this process is no less, if not more, cumbersome and lengthy than the concessions process.

For more information, please contact: