Resort Condominiums – Special Hotel Accommodation

September, 2017 / EKW


Over the years, real-estate entrepreneurs have erected a significant number of residential projects, built in various areas throughout the country, including along the seashore, on lands designated for tourism and recreation purposes. This situation was enabled, among others, by erecting projects which were marketed and called ““apartment hotels” or “Resort Condominiums”. In fact, such projects matched the provisions of the zoning plan applying to the land, which provided that it is possible to erect hotels on the land and construct Resort Condominiums which could be sold to individuals, but in fact such apartments served as residential apartments for all matters and purposes.

In light of this background, and in order to avoid lands leaking from the public sector to the private one, at the end of the 1990s, the Ministry of Tourism has revoked its recognition of this type of hotel accommodation (Resort Condominiums) as an acknowledged means of accommodation. Courts have also begun hardening positions opposite real-estate entrepreneurs for constructing residence on lands intended for hotels.

The Policy of the Courts and the Ministry of Tourism

One of the most prominent and leading judgments from an aspect of keeping land areas intended for public welfare for recreation purposes, was issued by the Supreme Court in Administrative Petition Appeal 2273/03 Blue Island et al. vs. the Society for the Protection of Nature in Israel et al. given on 07/12/2006 (the Herzlia marina case). The Supreme Court has denied the appeal filed by the contracting companies, while adopting the judgment by Honorable Justice U. Goren in Administrative Petition 98/2038, and provided the principle that in tourist areas, in which, by their designation defined in the provisions of the zoning plan applying to the area and/or in accordance with national zoning plans, it is possible to erect an “apartment hotel” and/or “Resort Condominiums”, then the units therein can be sold to the general public, provided that two principles are kept: first, the structure will be planned, erected and operated as a hotel; second, the accommodation units will be made available to the general public most days of the year.

Alongside the court rulings, and in light of the fact that approved zoning plans still contain terms such as “apartment hotel” and “Resort Condominiums” or the term “special hotel accommodation”, in new zoning plans, as permitted uses on land with tourism as its designation, the Ministry of Tourism has also decided to decide on the matter and present its position and tourism policy on the subject. The policy of the Ministry of Tourism was expressed in the Director General’s Circular on the subject of special hotel accommodation[1]:

“The areas along the coast and other parts of the country, which have nature and landscape resources and are intended for hotel use, are limited and narrow, and must be protected for use for designations for public benefit, namely – tourism and holiday. Therefore, the need arose to concentrate the position and policy of the Ministry of Tourism for maximal protection of these areas, in order to guarantee the tourism uses and the benefit of the general public”.

Special hotel accommodation was defined in the Director General’s Circular in this manner: a hotel defined in the provisions of the plan applying to the area in the list of land uses and/or designations as an “apartment hotel” and/or “holiday apartments” and/or a hotel operating on a time sharing or leaseback basis.

In accordance with the Director General’s Circular of the Ministry of Tourism, the main principles according to which it shall be possible to erect a hotel which includes “special hotel accommodation” (holiday apartments) refer to physical elements of the hotels, the location of the hotels in the country, limitation of the number of Resort Condominiums out of the total units in the hotel, and the permitted use of the holiday apartments, while emphasizing in this regard, the provisions which must be included in the sales agreement of the holiday apartments, and the authorities of the hotel management company, all out of the intention of guaranteeing the hotel use and operation, and preventing the option for exclusive private use of the accommodation units, including for residential purposes.

The Application of the Provisions of the Director General’s Circular of the Ministry of Tourism

In the framework of the aforesaid circular of the Director-General of the Ministry of Tourism, it was stated that: “The construction of storage facilities in land designated for the provisions of the Urban Planning Scheme for tourism and its uses in the plan are defined as” apartment hotels “and / or” vacation apartments “and / According to the principles for special hotel accommodation as detailed in this circular.

The Director General’s circular applies both to existing zoning plans and to new zoning plans, by setting different provisions. Following are two main differences:

Limitations on the number of holiday apartments which can be included in the hotel compared with the other hotel units: in case of new zoning plans, the circular provides that the total area of the holiday apartments shall not exceed 49% of the total area of the hotel units, while there is no similar limitation in the existing zoning plans.

Self-use of holiday apartments: the requirement in existing zoning plans is that the period of self-use in the holiday apartment shall not exceed nine cumulative months in a year. On the other hand, the requirement in new zoning plans is that the period of self-use shall not exceed six months minus one day cumulatively in a year.

To ensure the management and hotel use and to supervise the existence of the principles set forth in the Director-General’s Circular, provisions were set that would apply to existing plans and new reports.

For example, it was decided to cancel the possibility of self-marketing of the Resort Condominiums and to set uniform rules for all purchasers of the Resort Condominiums, such that the marketing of all the Resort Condominiums will be carried out only by the hotel management company.

In addition, it was decided that the Ministry of Tourism would coordinate with the local planning and building committee a number of issues related to vacation apartments, including the conditions for the granting of Form 4 (Tofes 4), including the following conditions:

Obtaining the Ministry of Tourism’s approval that the sales and management agreements signed with the purchasers of the Resort Condominiums comply with the principles of this procedure with respect to the management, operation and hotel use;

After the issuance of Form 4, the Ministry of Tourism will verify the hotel operation of the project by a hotel management company, including the presentation of a hotel business license.

Granting Form 4 for the project is conditional upon receiving a occupancy form for that part of the project that will be used as a “regular hotel”.


There is no doubt that the advantages contained in the intervention of both the courts and the Ministry of Tourism by outlining a policy, as expressed in the Director General’s Circular regarding special hotel accommodation (while coordinating with the local planning and building committees) are many, and that if and inasmuch these shall be applied and properly enforced, this is a blessing which shall benefit the public in general, and keep the public space which is ever minimizing in any case.

[1] Director General’s Circular no. 5/2009 published on 25/05/2009; Amendment 1 to Director General’s Circular 16/2009; Amendment 2 to Director General’s Circular 8/2011 and Amendment 3 to Director General’s Circular 1/2013.