104 Beit Shemesh buyers stuck with no home

Support wall in Beit Shemes project  / Photo: Eyal Izhar, Globes
Support wall in Beit Shemes project / Photo: Eyal Izhar, Globes

A support wall in the Neve Shamir neighborhood collapsed, bringing the housing project there to a halt as the contractor and government blame each other.

The winners of Buyer Fixed Price Plan lottery no. 492, which took place in December 2017, thought that they would be able to move into their new homes in the Neot Aviv quarter in the Neve Shamir neighborhood of Beit Shemesh by the end of October 2021. The project, however, with its 104 apartments, 64 of which were in the Buyer Fixed Price Plan, has been at a standstill for a long time, and it is already clear that it will not be completed. The developers say that a support wall (designed to prevent movement of earth on the hillside) near the building collapsed, and that they are not responsible for repairing it. The Ministry of Construction and Housing, which is responsible for infrastructure work on the site, blames the contractor. Dozens of buyers are going to be left without a roof over their heads, while paying both rent and mortgage payments.

The plans for the Neve Shamir neighborhood cover 2,300 dunam (575 acres) with 5,500 apartments: half of them three-room apartments and half four-to-five-room apartments. There are also several private housing units and 500 sheltered housing units. The ads for Neve Shamir tried to distinguish it from the older part of Beit Shemesh as a "suburb of Tel Aviv" - a huge secular, or at least non-haredi (Jewish ultra-Orthodox) neighborhood in Beit Shemesh.

One of the buyers in the project, who lives in Jerusalem, does not want to be named because he is anxious about a confrontation with the contractor. "In June 2019, one of the support walls in the project collapsed, and the entire road on the upper level was wrecked. The Ministry of Construction and Housing ordered the contracting company, Psagot Ziv Investment and Development, to halt the work and that is when the trouble started. No one is accepting responsibility. It has been eight months since the wall collapsed, and the work has come to a halt. The Ministry of Construction and Housing is not giving an inch. I'm now paying both a mortgage and rent, and now I have to pay for almost another year. Every month of delay detracts from the Buyer Fixed Price Plan discount."

"There was a signed agreement, and everything has ground to a halt"

A resident of one of the communities in Gush Etzion who also bought an apartment in the project says that she has a terrible feeling of uncertainty. "There was a signed agreement and a date for handing over the keys, and now we have a feeling of awful uncertainty. As of now, everything is at a standstill. We're getting no clear answers. We've been waiting for this apartment since 2017. We already paid an initial amount from our own money and took a mortgage. We're paying rent, and it's not clear to us where our children will go to school. It's all one big question mark. We want to move into our own home, and everything's up in the air. It's very hard for us."

The mutual accusations began in August 2019, two months after the wall collapsed, when Psagot Ziv sent a letter promising to start work in November 2019. "As we understand it, in light of the developments, the Ministry of Construction and Housing took on itself the job of rebuilding the support wall and the road in front of the lot on the west side. This work will begin in September 2019. We believe that we will resume regular work at full speed in November 2019."

Psagot Ziv sent another letter in September 2019, stating, "The Ministry of Construction and Housing notified us that it would begin reconstruction work on the collapsed support wall of the road in November 2019. We estimate that we will resume regular work at full speed in December 2019-January 2020… We expect a delay of four months in handing over the apartment. This delay does not entitle the buyer to any compensation whatsoever, among other things due to the fact that the delay is not under the control or responsibility of the company."

Psagot Ziv CEO Moshe Cohen says that despite all of his efforts, including a meeting with outgoing Ministry of Construction and Housing director general Benny Dreyfuss, no measure to repair the damage has been taken. "After the support wall collapsed, I contacted representatives of the Ministry of Construction and Housing, and asked them to rebuild the wall. The question of responsibility was not raised at this stage. A representative of CPM, the company managing the project, promised that we could go back to work within five months.

"I'm doing all that I can to get the Ministry of Construction and Housing to repair the damage, so that I can go back to building. Unfortunately, the way it looks now, this pause, under the most optimistic scenario, will take at least a year. The Ministry of Construction and Housing has done nothing for a year. Not only am I not working, but my equipment isn't working, the building materials are sitting here, I'm not selling apartments, I have to concede the indices and linkages to the tenants, and my good name is being besmirched."

Ministry of Construction and Housing: The collapsed wall is not our responsibility

The Ministry of Construction and Housing said in response, "When the wall collapsed, a thorough examination was begun of the circumstances of the event. Already at this stage, it was clear that the wall collapsed as a result of the work carried out by the construction contractor, which is not the ministry's responsibility. By law, the contractor's work requires a building permit from the Beit Shemesh municipality, which is the authority responsible for granting building permits in its municipal jurisdiction.

"This event requires comprehensive re-planning. In order to expedite the repair as much as possible, the ministry has considered alternatives providing an engineering solution to the problem created. It was decided to select an alternative that would provide the optimal solution. Work on repairing and renewing the wall will begin in the coming weeks, subject to budgetary approval. When work on repairing the wall is completed, the contractor can continue construction of the housing units."

Published by Globes, Israel business news - en.globes.co.il - on February 23, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Support wall in Beit Shemes project  / Photo: Eyal Izhar, Globes
Support wall in Beit Shemes project / Photo: Eyal Izhar, Globes
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