A wave of cancellations due to pollution? Apartment buyers in Sde Dov demand an exit option from the contract

Half a year has passed since the Israel Land Authority and the Ministry of Environmental Protection announced the presence of PFAS pollutants in Sde Dov, but the affair has only become more complicated since then. The latest development came with a sharp letter sent by the Ministry of Environmental Protection to the Tel Aviv Municipality, according to which pollution was detected in about 9 plots in the complex, while the municipality did not act in accordance with the instructions for conducting tests. According to the ministry, it is no longer possible to take samples in some of the plots after contaminated soil was mixed with clean soil, and therefore it demands to stop the work. On the other hand, the municipality claims that the responsibility for treating the soil and managing the process lies with the Ministry of Environmental Protection, and the question of the responsibility of the Israel Land Authority as the one who marketed the lands is also still unclear.

The question marks surrounding the division of responsibility between the involved bodies are multiplying. Beyond the question of who is authorized to order the cessation of work, issues arise regarding the rights of the developers who purchased the land when it was marketed as suitable, as well as regarding the buyers.

Meanwhile, sources in the industry who are building projects in Sde Dov admit that the buyers are not calm in light of the situation that has been created and the reports of soil contamination. According to them, many new buyers are currently demanding to add a clause to the contract they are signing that will allow them to be released from it easily following findings of pollution.

According to Adv. Einat Shaked, managing partner at the Yahav law firm, in most sales agreements there are clauses that allow the developer an extension in completing the project, so the mere delay in construction does not automatically grant a right of cancellation and specific clauses are required. In any case, she adds, "not every right must be explicitly anchored in the contract. If it turns out that the pollution fundamentally changes the transaction or causes a significant delay, the buyers may certainly have grounds to demand the cancellation of the contract." This is true even if there is no explicit clause on the matter.

The results will be published to the public

In the letter that the Ministry of Environmental Protection sent to the Tel Aviv Municipality, a series of worrying findings were raised. The ministry warned that excavating soil suspected of being contaminated and removing it, before samples were taken and without proper supervision and control, could constitute a "risk to the health of the public staying in the plan area or intending to live in it."

Following the findings, Globes contacted the Ministry of Environmental Protection to find out which plots are involved and what is expected to be built on them. The ministry stated that in all nine plots where findings indicating the presence of PFAS pollutants were detected, residential projects are expected to be built, and in some of them also commercial and office areas. Among the companies are Damri, Shikun & Binui, Gindi Holdings, Mivne, Prashkovsky, and more. It was reported that the findings were transferred to the rights holders, and that after the investigation reports are approved, the results of the samples will be published to the public. However, some of the companies claim that they received approval from the Ministry of Environmental Protection that the land is clean. Alongside this, sources in the industry note that the developers financed the tests themselves and received the Ministry of Environmental Protection's approval that the land is clean and work can continue.

At the same time, although in its letter the Ministry of Environmental Protection demanded that the Tel Aviv Municipality stop the work, the municipality claims that it is acting in full coordination and continuous cooperation with the Ministry of Environmental Protection, and that it is the professional body guiding the treatment of the contaminated soil. However, the municipality did not answer whether an instruction was given to stop construction work on the plots where there is a suspicion of pollution, and left the question of responsibility for the continuation of the work without a clear answer.

Adv. Bar Rozov, director of the legal department at Adam Teva V'Din, notes that the affair illustrates the problem of dealing with contaminated land, in the absence of regulatory certainty and with a vague division of responsibility: "The sad result is regulatory uncertainty and a chaotic situation, in which the public, apartment buyers, and sometimes also the developers do not know what was tested, what was approved, under what conditions, and who bears the responsibility." She points to the need to examine risk at the complex level. "A planning blue line does not protect against exposure to pollutants," she explains. "A child who goes to a school near a plot where work is being carried out does not distinguish between the borders."

"In accordance with the instructions"

Tel Aviv Municipality's response: "After receiving the information, a joint meeting was held last week with the participation of senior municipality officials, department managers, and representatives of the Ministry of Environmental Protection, in order to coordinate the manner of continuing the work."

Ministry of Environmental Protection's response: "The ministry is conducting inspection tours at the site to ensure that the work is carried out in accordance with the instructions. The letter was sent following findings from a tour that raised a concern that development work is not being carried out."