Massive lawsuit against the company that "illegally holds 1,314 public housing apartments in Tel Aviv"
The state is suing "Halamish", a company jointly owned by the state and the Tel Aviv municipality. According to the lawsuit, the state funded about 99% of the capital used to purchase the apartments, but for historical and technical reasons, the apartments were registered in the company's name. According to the state, despite explicit commitments, Halamish refrained from transferring funds due to the state and illegally retained about 50.8 million shekels.
The State Attorney's Office has filed a lawsuit in the Tel Aviv District Court on behalf of the Ministry of Construction and Housing against the company Halamish. The state requests a declaration that it is the owner of the rights to approximately 1,314 apartments intended for those eligible for public housing in Tel Aviv and seeks to compel Halamish to return tens of millions of shekels that belong to the state and are allegedly held illegally.
The statement of claim emphasizes that public housing in Israel is intended to provide a housing solution for populations unable to afford market-rate housing. This is a limited public resource managed by the Ministry of Construction and Housing through management companies entrusted with the preservation and administration of these assets for the benefit of eligible citizens, in accordance with ministry policy.
The lawsuit, filed by Adv. Adi Ron and Adv. Rotem Alkalai from the Civil Enforcement Unit of the State Attorney's Office, along with Adv. Nir Savrov, Adv. Nir Milstein, and Adv. Nathan Lerner from the Schnitzer Gottlieb & Co. law firm, concerns public housing apartments known as "investment property," which were built, purchased, or financed by the state between 1961 and the early 1980s.
According to the lawsuit, the state funded about 99% of the capital used to purchase the apartments, but for historical and technical reasons, they were registered in the name of Halamish—a government-municipal company jointly owned by the state and the Tel Aviv municipality. The state's position is that Halamish has served for years as an executive arm of the ministry, with the sole purpose of managing public housing assets and holding them in trust for the state, rather than as the owner of the rights to them.
The claim alleges that in recent years, Halamish unilaterally changed its position and began to assert ownership of the apartments. It is alleged that the company registered public housing assets in its own name in land registry offices without state consent, refused to register new apartments built under urban renewal projects in the state's name, and conducted negotiations with developers without the state's knowledge. Halamish also sold public housing apartments and refused to transfer the proceeds to the state.
According to the state, despite explicit commitments and agreements, Halamish continued to promote the registration of rights in its own name and refrained from transferring funds due to the state. It is further alleged that Halamish illegally retained about 50.8 million shekels beyond its share of profits from the sale of apartments to tenants.
As part of the lawsuit, the state asks the court to declare it the owner of the rights to the apartments, order the registration of rights in its name, and cancel registrations made in favor of Halamish. Additionally, the state seeks to prohibit Halamish from performing owner actions on the assets without authorization, compel the return of funds allegedly withheld illegally, require payment for the full value of assets sold to third parties without approval, and determine that Halamish breached its obligations under the management agreement.
