Good news for thousands of Jerusalem residents: KKL-JNF to extend the lease for Church-owned land in Jerusalem

KKL-JNF recently contacted thousands of people whose apartments in the city center are built on church land, informing them that it has decided to extend the lease agreement that is due to expire in less than 30 years, with a privately-owned company Nayot, which holds the rights. However, there is still no information on the details of the agreement, nor about the degree of cooperation of Nayot who will unquestionably seek to protect its rights. In recent years, the price of homes in the neighborhoods has dropped by tens of percent.

Less than 30 years before the expiration of a lease for Greek Orthodox Church-owned land in Jerusalem, over a thousand households in the Jerusalem neighborhoods of Talbieh, Nayot, Rasko, Baka, and Rehavia, received a reassuring and positive message from Himnota, the real estate arm of the Keren Kayemeth LeIsrael-Jewish National Fund (KKL-JNF). According to the announcement, KKL-JNF is currently working to extend the leases on the land with its current owners – Nayot, which purchased the land from the church a few years ago, for a period of several more generations, i.e., more than 99 years as stipulated by the current lease agreements, which are expected to come to an end between 2051 and 2052.

It should be noted that the extension is still in its initial stages — apart from information about a decision in principle by KKL-JNF to reach agreements, there are no more details available. Still, this has sparked great optimism among the residents who hope that the period of severe uncertainty regarding the future of their properties will soon end.


Last month, the Authority for the Rescue of Apartment Lessees, which represents the households leasing the apartments on the church’s land, issued a statement that it was “pleased with the recognition of the rights of the lessees who paid full market prices for their apartments,” adding that “the Authority, on behalf of all lessees, demands the immediate enactment of a fair lease law similar to that which exists in other countries but not yet in the State of Israel. A law that will require lessees to extend the lease under the same conditions as lessees who purchased apartments on land belonging to the Israel Lands Authority. The organization demands that all the bodies involved, including the Ministry of Justice, act immediately to correct a historical injustice caused to thousands of lessees in Israel due to the lack of legislation.”

In 2017, a controversy broke out when it became known that a group of businessmen, led by Attorney Noam Ben David, had purchased the rights of the Greek Orthodox Church in the center of Jerusalem a year earlier. This refers to a total area of approximately 500 dunams that includes a number of complexes in the neighborhoods of Talbieh, Nayot, and the Valley of the Cross.  More than 1,000 housing units are built on the Church-owned land in Jerusalem, as well as hotels, public institutions, open spaces, and even a small part of the Great Synagogue.

In the early years of the state, KKL-JNF negotiated with the church on lease agreements regarding three complexes for a period of 99 years. According to the agreement, upon the expiration of the agreements in 2051 and 2052, KKL-JNF will be given the option to extend the lease for an additional 49 years against an additional payment. As the end of the lease approached, unsuccessful attempts were made to acquire permanent ownership of the land by KKL-JNF. The publication of the sale of the land by the church to a private profit-oriented company, therefore, caused great concern among the apartment owners.

The uncertainty regarding the future of the land also affected the values of the apartments in these areas, the price of which is about a third lower than the price of similar apartments in nearby areas that are not built on church lands. A few years ago, the economic newspaper Globes published a review according to which apartments on the Church-owned land in Jerusalem were sold at a price that reflected a value of NIS 25,000-26,000 per built square meter, compared to NIS 37,000-38,000 per square meter for similar apartments on privately-owned land. These gaps have only increased with time, as the expiration date of the lease approaches.

The details regarding the initiative being formulated at KKL-JNF are incomplete at this stage, and all that is now known is that a decision in principle to extend the lease agreement has been made, not in accordance with the terms of the original contract that allow it to be done for an additional 49 years, but rather for a much longer period. However, such a decision will involve negotiations with the current owners of the land – the private company Nayot, which will undoubtedly seek to protect its own interests, and it is even possible that this move will also be discussed in the various courts.

It seems, therefore, that KKL-JNF’s recent announcement is not the end of the story. However, it is hoped that this time it will be an optimistic story that will end with good news for the thousands of residents living on Church-owned land in Jerusalem, and finally put an end to years of unease that they have suffered.

The contents of this article are designed to provide the reader with general information and not to serve as legal or other professional advice for a particular transaction. Readers are advised to obtain advice from qualified professionals prior to entering into any transaction.

Share This