The buyer’s price in Shoham: Those eligible for “Series A” respond sharply to the High Court of Justice

They claim that “adoption of the petitioners’ position at the present time, in a manner that would harm the respondents’ chances of winning the Shoham lottery would constitute a breach of a binding government promise” - They warn that accepting the petition of those eligible for “Series B” would cause the collapse of the entire buyer’s price program

02.11.17 | Ori Chudy

The petition to the High Court of Justice filed by Shoham residents eligible for the Series B buyer’s price program continues to generate further reactions and disputes. After those eligible for Series B refused to delete the petition, requesting to await the court’s ruling – local residents who are eligible for Series A are today (Thursday), sending a response of their own to the Court, in which they attack the petition filed and demand that it be deleted immediately.

This is to do with a response being filed with the court this morning by 66 local (Shoham) residents eligible for Series A through attorneys Menachem Abramovich, Eleanor Stark and Zohar Ilan of law firm Hamburger Evron & Co. Among other things, those with Series A eligibility claim that acceptance of the petition would constitute a breach of a government promise, and warn against a situation in which the court’s adoption of the petitioners’ claims could lead to ‘a slippery slope’ that might cause the collapse of the entire occupant price program.

“This petition reflects the improper attempt of a handful of people, most of whom only recently joined the buyer’s price program, to bypass a long queue comprising dozens of eligible people, including the respondents, so as to bestow priority on themselves. This act, in a manner that is contrary to the proper and important purpose of a program that is conducted with transparency and while stringently maintaining clear and proper rules of participation that have been known to the public from the date of announcement of the program in its current format, and as early as the month of August 2016,” thus opened the detailed 27-page response to the court of the Shoham residents who are eligible for Series A.

“The petitioners are new players,” i.e., residents who only very recently joined the program, and who anyway did not really rely on it. In fact, some of them, as can be seen from Appendix A to the petition, joined the program only after the lotteries named in the petition…and, as soon as they joined, were quick to attack its terms, which, as stated, had been known well in advance.

“The petition clearly shows that the petitioners think the program they have just joined is a program designed to provide them with a specific option to buy an apartment at a discount in the town of Shoham on demand. In other words, not a buyer’s price program operated on a large scale at the national level with clear goals, with everything as described hereunder, but as a program of “an apartment in Shoham on demand, at your request.”

Those eligible for Series A vehemently claim that “the ruling on this devious dishonest attempt should be to reject it out of hand,” and explain that acceptance of the petition of local Series B residents would not lead to equality among the eligible parties, but would cause the opposite result: “Acceptance of the petition will not remedy a violation of equality, but would cause such a violation. This is because, through the petition, the petitioners seek to create, out of nothing, a new ‘elite group’ within the framework of the program, and to apply new rules to it,  ignoring the relevant difference between the petitioners and the persons eligible to participate in the lotteries that are the subject of the petition – a difference that is expressed, among other things, in the very fact of the eligibility to register for the program in the first place, during the waiting and the active participation of the registrants over time in the program, as well as its purposes as a national program.

“In fact, the petitioners, as Shoham residents, even go so far as to ask for preference over all those who are eligible for Series A, which is simply unacceptable. Acceptance of the petition will cause serious damage to all participants in the program and, first and foremost, the Series A local residents, who in these lotteries were meant to enjoy greater chances of winning, as befits their status as local residents, as defined by the rules of the program.”

Series A local residents even elaborate in their response to the court how their situation would worsen should the petition be accepted: “Most of the respondents in our case have already participated in dozens of lotteries performed under the program, with regard to many other places in the country (in most of which they did not enjoy the preferential treatment given to “locals”) but, in spite of this, they have not yet succeeded in realizing their eligibility under the program. The lotteries set out in the petition, hold a high probability of winning for the respondents, which could be harmed significantly (according to estimates – from about an 88% chance of winning to roughly a 27% chance of winning), if and to the extent that the petition is accepted.”

The respondents further contend that not only did they not win in previous lotteries, but that they had also cancelled participation in other lotteries, so as not to harm the chances of winning the lottery in Shoham once it became known that this would take place: “Up until the date of filing the petition, some of the respondents cancelled a previous win in another location, taking into consideration the high chances, and in order that they might participate in the Shoham lotteries. Needless to say, they performed this action with a heavy heart, and only after carefully weighing up all the relevant data, as they appeared in the official publications of the program.”

At the same time, eligible Series A local residents also attack the timing of the filing of the petition by the Series B local residents, and argue that the program rules were known in advance, as was the division into series and the volume of housing units in the town that would be marketed and later be included in a buyer’s price lottery, and therefore they write to the court that there was a delay in filing the petition: “To come now, a year after publication of the distribution into series, a year after it became known to the petitioners that it would not be possible for them to take part in the current lottery, and to ask to the change the terms of the lottery, so that the chances of their winning the lottery would change beyond recognition in comparison with all those eligible for Series A, and the respondents in particular, is a wrongful and dishonest attempt that must be rejected out of hand” thus in answer to the court.

As stated, the Series A local Shoham residents also explain in their response to the court that the argument of Series B local residents of harm in the equality between those eligible for the two Series who are local to Shoham is not true, and write that “the distinction made between Series A local residents, and the petitioners as Series B local residents, is a distinction that is appropriate and relevant when taking into account the purposes of the program, and that there is nothing in it that harms the principle of equality. The petitioners’ position is actually the one that reflects inequality and an attempt to create a preferred ‘sub-group’ in contravention of the provisions of the program.

Those eligible for Series A even apply to the court and claim that the buyer’s price program and the rules set forth therein constitute an administrative promise, and that acceptance of the petition by the court is liable to lead to damage in public trust. “These provisions constitute a representation and a binding governmental promise, since they are explicit and clear, they were given by an authority holder with the intention of creating legal powers, to an authority that has the legal ability to fulfil the promise, and there is no legal justification for changing it or nullifying it. Adopting the position of the petitioners at the current time, in a manner that would impact the chances of the respondents’ winning the lottery in Shoham, would in practice constitute a breach of a binding government promise that the respondents relied on and calculated their own steps accordingly. The harm to public trust in the government system and in the buyer’s price program in particular would be a fatal blow whose consequences would resound on all the participants in the program, from here on.”

At the end of the response document, the Series A local Shoham resident respondents write to the court that “There is absolutely nothing whatsoever in the petition and it reflects a wrongful attempt, that suffers from heavy delay, to undermine the purposes of the buyer’s price program, all in order to gain a points’ discount in the real estate project desired by the petitioners.”

The respondents also warn the court against the widespread impact of receipt of the petition on the entire buyer’s price program: “Acceptance of the petition will result in a slippery slope, which is expected to cause the collapse of a program in which the division into series constitutes a central pillar and is the secret of its success. The Shoham lotteries should therefore take place as soon as possible, while protecting the rights of the respondents who relied on the provisions of the program and the rules and the chances of winning that they had anticipated prior to filing of the petition. In view of all the aforesaid, the honourable court will be asked to order rejection of the petition (on the order requested therein) and to require the petitioners to pay the respondents expenses in connection with submission of said response at their realistic rate.”

A dangerous precedent: the lottery under the Buyer’s Program is cancelled in Shoham

It may be recalled that the response of the respondents eligible for Series A comes after the Series B holders had already responded to the court several times following submission of the petition. In recent weeks, the said petition, which was filed by Attorney Effie Michaeli, had already caused a change in the big lottery, when the township of Shoham was removed from it. The petition also caused a wider effect when the State re-opened registration for the big lottery, which is causing a delay in the results of the lottery to the general eligible public in the other localities.

At the same time, while the specific petition filed by the Shoham residents does relate only to the locality itself, it does have broad significance to everyone who is eligible for the buyer’s price program. As revealed in Globes, the petition has led to the fact that in other towns voices are now being raised to change the rules of the lottery and the division into series.

We would also mention that the State’s position is that freezing the lottery in Shoham should lead to erasure of the petition, but the local residents eligible for Series B continue to refuse to do this. A date for the hearing on the petition has not yet been set.

At the same time as the response was sent to the court, the local Shoham residents eligible for Series A requested to add that “the State, through MK Roi Folkman, worked and continues to work hard in order to nevertheless do so and beyond the need to find another solution for Series B through additional vacant lots in the 21 neighbourhood, or by increasing the number of apartments on the existing lots, but unfortunately every promise given – including the promise of 90 units for the Series B local residents, which places their chances of winning, it is estimated, on a par with their chances if the petition were to be accepted as is (without increasing the number of apartments) – does not satisfy them.

 “It is important for us to note that among Series B we have friends, neighbors and close family members, and we very much hope that in the end a suitable solution will be found for them that is not at our expense. Their petition, in our estimation, is likely to be rejected by the High Court of Justice, which would make the chances of finding a solution for them nil. We want to thank the Housing and Finance ministries for operating the buyer’s price program, and we are certain that in the end it will be possible to gain the outcome – i.e., a suitable apartment, and the housing crisis will be resolved.”