A landmark decision may put an end to the use of agricultural lands for business and commerce, common in many moshavim and kibbutzim. The Supreme Court ruled that a plot owner who made extensive commercial use of agricultural land will have to return the entire plot to the Israel Land Authority and will not be eligible for compensation for the buildings erected on the property.
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The land is in Kfar Truman, a moshav in the Modi'in Regional Council near Ben-Gurion International Airport. The moshav was built on state lands administered by the Israel Land Authority and leased to the Kfar Truman collective community, among whose members are the Kalkuda couple, who are the subject of the decision.
The lease agreement between the ILA and the community stipulated that use of the land and any buildings erected on it would be allowed exclusively for agricultural purposes. The community or its members were prohibited from transferring rights to the land to third parties, including by means of rent, without the ILA's consent; violating the agreement would entail returning the land to the ILA without compensation.
The Kalkudas hold two plots of land totaling 43.7 dunams, on which they built over the years numerous illegal buildings rented to third parties and of which they made nonconforming use, including building a parking lot that provided parking and transport services to the airport, a vacation home compound, and numerous other commercial activities. Over the years, many legal procedures, both criminal and civil, were initiated against them, but the couple did not cease their activities.
Preserving resources
The couple's appeal to the Supreme Court referred to the decision of the Central District Court, which ruled in favor of the ILA, represented by the State Attorney's Office. The District Court ruled that the plots would be returned to the state, the illegal buildings on them demolished, and the defendants obliged to pay appropriate fees for the illegal use of the land.
The Supreme Court rejected the appeal, writing that it is "inconceivable that a holder of rights to public lands should bluntly violate his commitments according to the agreement, act against the orders of the court and his own commitments, and expect that his rights not be denied as per the agreement."
Justice David Mintz noted that "nothing helped. Despite the indictments, the convictions, the verdicts, and the understandings – the appellants continued to perform conspicuous violations and make nonconforming use of the land. These violations earned the appellants huge profits at the public's expense."
Mintz added that the fact that criminal and administrative proceedings had been taken against Kalkuda did not prevent the state from initiating civil proceedings as well, since as part of its duty to preserve public resources, the state is obliged to file civil lawsuits intended to return funds to the public.
The agreement should be canceled
The court rejected the argument that the remedy of returning the plot to the ILA should be reserved for extreme cases only. "The main and most fundamental aim of the lease agreement was the use of the land strictly for agricultural purposes," reads the decision. "When the directives of the paragraph regarding the transfer of rights to the land are violated, the purpose of the agreement is undermined and the most fundamental element of the contract collapses. This is so whether the violation is singular or ongoing; light or severe; one that ceased many years ago or recently; a violation performed at the margins of the land or on all of it. When the purpose of the agreement is not fulfilled, the ILA – which is responsible for protecting the limited and valuable public asset of Israel's lands – should be provided with the tools to cancel that agreement."
The decision stipulates that the agreement will be cancelled with regard to the entire territory of the plot, regardless of whether it contains agricultural or residential areas and without the right to compensation for the built structures. It conveys a clear message that the land was leased for agricultural purposes and that any buildings erected on it were to serve the main goal – establishing and developing an agricultural settlement.
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The Kalkudas are to pay NIS 7 million in usage fees, reflecting the wealth they amassed from the illegal use of public land. In computing the usage fee, the court accepted the position of the state, according to which the fee should include the component of entrepreneurial profit, which, in the case of a nonconforming use, belongs to the ILA as the owner of the land.
The case was managed at the Supreme Court by Adv. Adi Ron and Osnat Dafna from the Civil Enforcement Unit at the State Attorney's Office, and at the District Court by Adv. Lital Sadovsky from the Tel Aviv District Attorney's Office (civil division).
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