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THE COURT: THE NAKASH BROTHERS ARE NOT ELIGIBLE TO BUILD A BOUTIQUE HOTEL AT THE AGAVAVA HOUSE IN TEL AVIV

The brothers, Walid and Abed Abulafia approached the Court with a petition to prevent the company owned by the Nakash Brothers from executing renovation work at the building, in order to transform it into a boutique hotel • The company owned by the Nakash Brothers is a protected tenant in the building • After a lengthy legal battle, the Court accepted the petition.

04.06.2020 | Guy Nardi


The Tel Aviv District Court has ruled that the company cannot execute renovations of a well-known building in Tel Aviv, which is designated as a protected tenant.  The work is being carried out in order to operate a boutique hotel on the site.

The building in question is Agavava House, which was designed by Architect Yosef Tischler and was built in 1934, occupying the southern side of the Knesset Square (Kikar Casino), located in proximity to and south of the Opera House.  The building is three floors above a commercial level; and for years, it operated as the Monopol Hotel.  The hotel was managed over the years by the Peber Company, a protected tenant, based on a lease agreement signed in 1944 between the company and the previous owners of the lot – the Avishar Family.  Two years ago, the hotel and restaurant were closed down, after the Municipality refused to renew the business licenses, because the building was found to be unsound.

According to brothers, Walid and Abed Abulafia, who hold 32% of the rights in the building, in June of 2018, the Peber Company, owned by the Nakash Brothers, began to execute extensive demolition and construction work, totaling some NIS 20 million, without receiving the necessary permits and their consent for the execution.

The Peber Company claims that this work was intended to strengthen the old building and was solely designated to repair the malfunctions and renovate it in accordance with the instructions of the Municipal Preservation Department in order to adapt it to the requirements of the 21st century, and in order to renew the business license.

During the Court deliberations, the claimants succeeded in proving that renovation and construction work had been executed that greatly deviated from merely a construction or cosmetic renovation, and included the building of a swimming pool and an elevator, constituting substantive changes to the leased building.

The District Court Judge, Amit Yariv, ruled that the defendant executed a significant scope of construction that deviated from the scope permitted for execution by the renter, even as a protected tenant:  “The consequence is that the defendant, a protected tenant on the property, executed construction and demolition work in significant scopes, which deviated greatly from the scope permitted for execution by the tenant, even in the capacity as protected tenant, without receiving the consent of the claimants, who are partial owners of the property and with clear knowledge that the owners opposed the aforesaid.   The execution of widescale changes to the property, as were executed by the defendant and which the defendant wishes to execute at the leased property, are a fundamental infringement and constitute damage to the proprietary anatomy and the rights of the property owner to determine what to do on his property.”  The Judge ruled that the Peber Brothers Ltd.  must pay the claimants a sum of NIS 50 thousand for costs and legal fees.

The advocates, Gabriel Moyal Maor and Mor Damti of Hamburger Evron & Co., who represented the Abulafia Brothers, noted that “this is very central and expensive Tel Aviv real estate.  Until June of 2017, the Monopol Hotel operated there, which had one star and was very neglected.  The Nakash Brothers saw the potential and decided that they would take control of the property and did so in two rounds:  They purchased shares in the protected tenancy company; and then, in the second round, they began to purchase ownership of the land.  The moment they did this, they began to execute work on the property.  They labeled this cosmetic renovation work, but we claimed that this was extensive construction work and they in essence trampled our proprietary rights.  There is a limit to the scope of action that the protected tenant is permitted to execute on the property; and consequently, the Court issued a permanent injunction instructing them that they could not continue construction on the property without the authorization of all the owners.  They did what they wanted.”

The Agavava House is part of a larger compound between Allenby, HaYarkon, Herbert Samuel and Yonah HaNavi streets and it spans 5 dunams.  The Abulafia Family owns significant sections of this compound; and in the past, they promoted the Ambassador Complex plan in this area (Plan TA/3641/1) which expired in June of 2019.

The plan proposed to preserve and reconstruct the historical building in the compound to include commercial areas, 52 residential units and a 120-room hotel, in which the colonnade in the front façade would be preserved, and the building would be reconstructed behind it.  In the eastern section of the compound, a 25-floor tower was planned similar in height to the adjacent Opera House.  Currently, the Abulafia Brothers are promoting a new plan for the venue, which will involve a large scope of construction.

Peber Brothers Ltd. spokesman:  “Pursuant to the publicity on the subject of the ruling issued regarding the Monopol Hotel located at 4 Allenby Street, in Tel Aviv, we wish to comment that the absolute and determining majority of the owners of propriety rights, which own the Monopol Hotel, have asked to dispel any doubt regarding the execution of renovation and construction work, at present and in the future,  at the Monopol Hotel building by the protected tenant – the Peber Brothers Ltd., by virtue of the protected tenant lease of the past 75 years.”

“If there will be a need for construction work or reconstruction based on the binding plan based on the Planning and Construction Law, they will be executed solely according to the law.”

“The property owners that are publicizing this response, as well as the management of Peber Ltd. will exercise the standing legal measures to prevent infringement of their rights and in order to set things right, including all the legal measures at their disposal, against those interested parties that hold a tiny majority, and whose goal is purely to damage the continued existence of the hotel and the property of the owners and the livelihood of those working there.”

“After thorough study of the ruling, an additional response will be given and the necessary conclusions will be drawn.”