Nearly 500 families who won subsidized apartments through Israel’s “Dira B’Hanachah” housing lottery have been left facing an uncertain future after the Ministry of Construction and Housing canceled its agreement with the developer of the Keter Harama project in Ramat Beit Shemesh Daled.

The cancellation affects 492 winning families who have been waiting approximately four years to purchase homes through the government-backed program. According to Simi Spolter, a reporter for TheMarker, the legal rights of the lottery winners are far less secure than many assume.

Speaking on Kol Chai Radio’s “Bonim Atid” program, Spolter explained that the terms of the housing lottery make clear that winning a lottery does not guarantee ownership of an apartment.

“You always have to read the fine print,” he said. “There’s a clause stating that winning the lottery doesn’t actually guarantee anything. As long as a purchase contract hasn’t been signed, the state’s position is that the winner has no vested legal right.”

Spolter described the situation as highly unusual, noting that troubled housing developments have generally managed to move forward because of steadily rising real estate prices.

“Rising housing prices covered up many mistakes,” he said. In this case, however, the dispute between the government and construction company Shapir—which is suing the state for approximately 800 million shekels, claiming government actions rendered the project financially unviable—ultimately caused the agreement to collapse.

He added that the development differed from most government housing projects because the developer was given unusually broad responsibility not only for constructing the apartments but also for developing the surrounding neighborhood and infrastructure.

“That model didn’t prove itself, and it wasn’t continued,” Spolter said. He also noted that the apartments were offered at exceptionally low prices—around 10,000 shekels per square meter—which made the project’s financial viability even more challenging.

Despite the cancellation, Spolter said the Housing Ministry is allowing the affected families to continue participating in future housing lotteries without forfeiting any potential rights they may still have in the current project.

“This is a technical cancellation,” he said. “Their rights are being preserved, and the question each winner has to ask is whether to continue waiting or to try their luck in other projects.”

At the same time, he cautioned that the dispute could take years to resolve because of the expected legal proceedings.

“If I had won an apartment in this project, I wouldn’t give it up so quickly,” he said. “But obviously everyone has to weigh the risks and the amount of time that may pass.”

Spolter believes the case could ultimately become a landmark legal test. A group of lottery winners is reportedly preparing a lawsuit against the state, arguing that they relied on their lottery victory, refrained from purchasing homes elsewhere for years, and have now suffered substantial financial losses because housing prices continued to climb.

“This is a legal question that has never been examined,” he said. “If the court determines that the state bears responsibility toward the winners, it will have broad implications for many other projects.”

He added that the outcome could also affect another unresolved issue—whether lottery winners who have not yet signed purchase agreements can later lose their eligibility under various circumstances.

“There is a gap here between common sense and the law,” Spolter concluded. “From a public standpoint, many people will feel they have been wronged. Legally, however, there is still no precedent defining exactly where the state’s responsibility begins and ends.”

{Matzav.com}