Land Consolidation and Division Procedures
The consolidation and division process can significantly affect property owners—and in some cases cause substantial financial harm. This page provides an overview of the key aspects of land consolidation and division in Israel, including how the process works, the reasons it may be initiated, the distinction between consensual and non-consensual procedures, the statutory restrictions that apply, and why professional legal representation is essential.
Topics covered on this page include: how consolidation and division procedures work, the purposes behind them, the difference between consensual and non-consensual processes, the statutory limitations on non-consensual consolidation and division, and the importance of legal support throughout the process.
By Igal Mor, Adv. & Notary
Accuracy in Legal Advice. Excellence in legal support.
How Does the Consolidation and Division Process Work?
Consolidation and division is a legal procedure through which existing land parcels are reorganized—merged together and then redistributed into new plots with updated designations. The process typically involves two stages: first, all parcels within the designated area are consolidated into a single block (the consolidation stage); second, the combined area is subdivided into new plots according to the updated plan (the division stage).
Why Are Consolidation and Division Procedures Conducted?
As the Israeli Supreme Court explained in Buchnik v. The National Council for Planning and Construction (HCJ 9402/03), the consolidation and division mechanism serves two primary purposes: first, to meet urban planning needs by enabling a more efficient distribution of land parcels within a given area; and second, to ensure a fair allocation of both the burdens and benefits of a plan among the affected landowners.
One of the principal reasons for undertaking a consolidation and division procedure is to improve the value and utility of the land through redevelopment. When this is the objective, the process is typically initiated by the landowners themselves. However, the Local Planning and Construction Committee within whose jurisdiction the land is located may also initiate the procedure independently.
A planning committee may initiate consolidation and division for two main reasons. First, the procedure may form part of the committee’s broader planning strategy for changes in the area. Second, the committee may use the process to redesignate certain private land for public use during the redistribution phase—thereby avoiding a formal expropriation and the compensation obligations that would entail. As the court stated:
“Under Section 26 of the Planning and Construction Law, the local committee may acquire real estate either through expropriation or by other means. The courts have ruled that consolidation and division is a legitimate method of acquiring property that the local committee may impose on landowners. Provided the purpose of the procedure is solely to obtain land needed for public purposes, the committee may resort to this process without being required to pay expropriation compensation.”
Consolidation and Division: With or Without Owner Consent
When landowners wish to reorganize their property, they may initiate the consolidation and division procedure voluntarily. In such cases, the landowners must submit a proposal to the Planning and Construction Committee that includes a breakdown of the current land division and the requested new allocation. The submission must detail plot numbers, areas, boundaries, and access roads. The committee may impose additional requirements as a condition for approving the plan.
Even when the local authority initiates a consolidation and division, the landowners may not necessarily oppose it. If the proposed plan allocates to each owner a parcel of comparable value to their original holding—or provides alternative compensation for any reduction—the procedure may proceed with the owners’ consent.
However, the consolidation and division process may also proceed over the objection of some or all landowners. When this occurs—whether at the request of certain landowners or on the initiative of the local authority—the special statutory provisions set forth in Section 122 of the Planning and Construction Law (1965) apply.
In some cases, landowners may consent to only part of the consolidation and division plan. When this occurs, it is often advisable to divide the plan into two separate complexes: one that can proceed with full owner consent, and another that proceeds under the non-consensual provisions described below.
Statutory Restrictions on Non-Consensual Consolidation and Division
When a consolidation and division procedure is conducted without the consent of all owners, the restrictions in Section 122 of the Planning and Construction Law apply. The first rule requires that each landowner be allocated a new parcel located as close as possible to the location of their original plot.
The second rule requires that each owner receive a new parcel with a value as similar as possible to the value of their original plot relative to the total value of all previous parcels. When it is not possible to maintain this proportional distribution, the owner who receives a parcel of lesser value is entitled to a “balance payment” from the Local Planning and Construction Committee to cover the difference. Conversely, an owner who receives a more valuable parcel must pay the difference to the committee.
Relevant Statutory Provisions: Planning and Construction Law (1965)
Section 121 – Consolidation and Division With or Without Consent: Both local outline plans and detailed plans may include provisions for: (1) consolidation of lots with or without the consent of their owners; (2) division of lots among their owners—into jointly owned or separately owned parcels—with or without their consent (referred to as “new division”); and (3) consolidation or division involving three-dimensional lots, provided the requirements of Section 69(a)(1a) are met.
Section 122 – Non-Consensual Division: When a division has not been approved by all affected owners, the following special provisions apply: (1) each allocated parcel shall be located as close as possible to the recipient’s previous plot; (2) the value of the allocated parcel shall correspond, as far as possible, to the proportional value of the recipient’s original plot relative to the total value of all previous parcels; (3) if proportional distribution cannot be maintained, the owner who receives a parcel of lesser value is entitled to a balance payment from the local committee, while the owner who receives a parcel of greater value must pay the difference to the committee; and (4) the authorized planning authority shall determine whether and to what extent the allocation can be carried out in accordance with these principles.
The law further requires that when a non-consensual consolidation and division is conducted, the Local Planning and Construction Committee (or the landowners who initiated the procedure) must appoint a licensed real estate appraiser. The appraiser prepares allocation and balance tables in accordance with the criteria established in the Planning and Construction Regulations (Consolidation and Division Plan) of 2009. These tables determine how parcels are distributed among the owners and calculate any balance payments owed.
It is important to note that balance payments received through the consolidation and division process are classified as “exercise of rights” in the land. As a result, the recipient may be required to pay a betterment levy on the amount received.
Why Legal Representation Is Essential in Consolidation and Division
Consolidation and division procedures are complex and can result in significant financial consequences for landowners. Whether you are initiating the process yourself or responding to a procedure initiated by the local authority, it is essential to engage an attorney who specializes in real estate, planning, and construction law to protect your interests and ensure a fair outcome.
At Adv. Mor & Co., our Real Estate, Planning, and Construction Department has over 15 years of experience in planning and construction proceedings. Our attorneys work alongside a multidisciplinary team of architects, appraisers, and surveyors to achieve the most favorable and efficient results for our clients.
The Real Estate, Planning, and Construction Department at Adv. Mor & Co. brings extensive experience in both real estate transactions and planning and construction proceedings. Our attorneys provide professional legal representation designed to achieve the most favorable and efficient outcome for each client. To discuss your consolidation and division matter, contact us by phone at 02-595-3322, via WhatsApp at 050-441-1343, or through the online contact form below.