Buying Residential Property on a Moshav

In the past few years we have seen many residential real estate  projects being built on land belonging to the Moshavim.  Indeed, it has been said that this type of project is an ideal one for young couples who would like to fulfill a dream of having a home with a garden, fresh air and country living.

Is this really the fulfillment of a dream or can it become a nightmare? Read on and decide for yourselves.

A  moshav is an agricultural settlement. The families that live on the moshav have banned together in a legal entity known as a cooperative society  (in Hebrew an “Aguda Shitufit”)  Each family has its own house  with about a dunam and a half of land around it, several dunams of land that it can farm and then the rest of the land is farmed communally by the moshav and the farm owners gets part of the profit.  This farm is called in Hebrew a “meshek” or a nachala”. 

Many of these moshavim were formed in the 1950’s by the Jewish Agency and the Israeli Land Authority.  The land belonged to the Israel Land Authority and the Jewish Agency sent settlers (usually new immigrants) to form the cooperative  “Aguda Shitufit” and set up  the moshav.  The legal rights that the farmers were given in the land were of use only not ownership or a long term lease  (in Hebrew “Bar Reshut”). 

The farm or nachala is not considered part of a person’s estate.  At the death of one of the parents the farm goes to the surviving spouse.  Upon  the death of the surviving spouse the farm goes to the child who was appointed by the parents  during their lifetime as the one to continue the farm (in Hebrew “ben mamshich”).   The farm cannot be divided up between the children .  The son who is to continue the farm is allowed to build his house on the farm when the parents are still alive.  Upon the death of both parents this son, the “ben mamshich”, gets it all.

This situation caused a lot of friction between siblings.  Parents very often found it hard to choose the one child who would get it all – the “ben mamshich”.   In addition to this, many of the moshavim fell into  debt.  The only way to get out of the debt was to take agricultural land ask to have its purpose changed  from that of agricultural to that of  residential and sell the land off to developers, using the money to  pay off debts. 

It was therefore decided that every moshav would have its own extension.  The right to buy the first plots of land was given over to each family that had a farm (or member of the Aguda Shitufit) so that this family could give the plot of land to one of the children, thereby having another child, in addition to the “ben mamshich”  continue living on the moshav. This child was able to buy the plot at a lower subsidized price from the Israeli Land Authority.  The remaining  plots in the project were to be sold on the open market to people from out of the moshav at higher prices set by the Israeli Land Authority.  The rights that these purchasers got in their plot is one of a long  term lease with the Israeli Land Authority.

Unfortunately, the privilege that the farmers were given was very often abused.  The plot that they could buy for their child at a lower price was very often sold to someone from out of the moshav at a higher price than the price their child would have paid to the Israeli Land Authority. However, the price reported and paid to the Israeli Land Authority was the lower price at which the plot was offered to the farmer  and the additional money was pocketed by the farmer.  In this way many farmers made a profit off national lands!

In addition to this, anyone wishing to live on the moshav has to be accepted by the committee of the moshav.  Very often, the purchaser was asked to pay bribery money under the table so that he would be accepted to the moshav by the committee.  Even after people were accepted to the moshav, built their house and lived on the moshav for a few years they could still fall victim to the old timers tricks.  I recently represented the purchaser of a house built on one of these projects.  The sellers were not people who were born and raised on the moshav but rather bought the plot from the Israeli Land Authority and built their house.    When the purchaser went before the committee he was delayed  again and again.  We soon found out that there was an old timer from the moshav that wanted to buy the house for his son and he therefore told the committee not to accept any buyer that the owner of the house would bring in.   When my client backed down, the seller began to negotiate with this old timer only to find that the guy wanted to pay him a lot less than he could have gotten from my client.  You see the old timer thought he had the seller by the throat and he was right.

These are just a few of the problems.  Does this sound like a dream come true?  If it does then you should really be careful what you wish for.