The Institute of Law Organises a Series of Legal Encounters in the West Bank and Gaza Strip
legal encounters addressed lease laws and ownership of condominiums and apartments. The events brought together a select number of advocates, members of the legal community, and representatives of civil society organisations.
The first legal encounter on “Apartments and Flats: The Legal Aspects and Consumer Protection” was held in the West Bank. The event casts light on problems associated with bank financing of housing projects in Palestine and legal challenges to consumer protection. The legal encounter was delivered by Mr. Bisharah Dabbah, a financial and banking expert, and Dr. Mahmoud Dodeen, Professor of Commercial Law at the Faculty of Law, Birzeit University.
In his opening remarks, Dr. Ghassan Faramand, IoL Acting Director, welcomed the audience and speakers. Stressing significance of presentations, Dr. Faramand hoped that the legal encounter would generate a maximum participation and exchange of opinions. According to Dr. Faramand, the encounter “is held in the context of potentially increasing challenges in real estate finance over the upcoming phase.”
Presenting on impediments created by bank loans to housing projects in Palestine, Mr. Dabbah focused on risks and challenges faced by individuals, who wish to purchase real property using bank financing. In this vein, a set of factors affect real estate finance as a whole, significantly reflecting on citizens’ lifestyles and options. In the real estate sector, consumers are the most affected. As in late 2007 in the USA, a real estate crisis results in a declining value of real property and default on bank loan repayment. Prompted by a policy of the Palestine Monetary Authority (PMA), bank facilities have eased property purchases to a great extent, but have also caused exorbitantly high real estate prices.
To avoid future challenges in real estate finance, Mr. Dabbah reviewed a set of options consumers might find useful. The PMA stipulates that an employee, who wishes to use real estate finance, should be in possession of a minimum cash value. In this context, Mr. Dabbah explained four methods could be used to purchase real property in Palestine, explaining advantages and disadvantages of each. Direct purchase mostly involves unregistered properties and is the most dangerous. Real estate finance is used to purchase registered properties. Accordingly, real property is mortgaged by the bank, but registered on the name of purchaser. Including multiple sponsors, personal loans are offered at high interest rates, but are repaid over short repayment period. Based on a lease-to-own (lease purchase) agreement, Islamic banking can be used to access a real estate loan in Palestine.
Mr. Dabbah also made a presentation on various kinds of interest rates, including fixed, floating, and adjustable interest rates. Mr. Dabbah advised individuals wishing to apply for real estate finance to choose fixed interest rates.
Addressing legal challenges to consumer protection in real estate finance, Dr. Dodeen explained that the Palestinian legal framework of consumer protection was inadequate. Consumers do not enjoy protection throughout phases of contract management. Firstly, individuals need capital to maintain their right to affordable housing. In the protective phase, as much updated information as possible will be provided on real property. When the contract is concluded, consumers will be empowered to both negotiate and set their own conditions. Member states of the European Union ensure significant legal protection to real estate consumers.
Dr. Dodeen described in detail several problems associated with real estate finance and consumer protection. In addition to challenges posed by multiple properties, limited area and high prices of registered land have negatively impacted on options available to real estate consumers. In this context, Dr. Dodeen made reference to the discretion made by the Palestinian High Court of Justice, which highlighted consumer protection in the disposition of real estate cases. Created by the High Judicial Council, the Committee on Sporadic Registration is in conflict with the law. Should its functions be considered as null and void, future disputes concerning this Committee may undermine legal protection of real estate consumers. According to Dr. Dodeen, land of common ownership poses another challenge to consumer protection. Most often, banks do not issue loans for purchase of common properties. Other challenges to real estate finance, including zoning, construction and financial legislation, also contribute to undermining consumer protection.
Dr. Dodeen highlighted that the Law on Ownership of Condominiums, Apartments and Commercial Units does not devise an informed solution for problems created by unregistered land. While it should have provided for property management, the Law focuses on transfer of property. Further jeopardising consumer rights, the Law does not provide the Planning and Building Committee with the powers needed to manage buildings.
In the ensuing discussion, the audience raised questions and made informed contributions. In relation to real estate finance, participants highlighted that relevant Palestinian legislation should provide legal protection to consumers.
Entitled “Landlord and Tenant Law in Gaza: The Legal and Social Aspects”, the second legal encounter was organised in the Gaza Strip. In her opening statement, Ms. Lina at Tounisi, Coordinator of the IoL Gaza Office, welcomed the speaker and audience and made a briefing note about the IoL Legal Encounters programme. In line with the IoL’s vision, mission and principled values, IoL legal encounters are designed to promote the rule of law principle and strengthen the Palestinian legal system.
Mr. Ghassan al Qishawi, Advocate of the Legal Clinic at the Palestinian Bar Association (PBA), provided an overview of the history of lease legislation since the Ottoman period until the present day. In this vein, Mr. Qishawi highlighted political and economic conditions, which have shaped the relationship between landlords and tenants.
Promulgated in the Gaza Strip, Law No. 5 of 2013 on the Lease of Properties repeals several regulations, which date back to the British Mandate and Jordanian periods. Like legislation inherited from past legal frameworks, the new Law provides for registration of lease contracts at local government units.
According to Mr. Qishawi, Law No. 5 of 2013 on the Lease of Properties obligates the tenant to evict the leased property after the lease period set by the lease contract expires. Also, the tenant is obliged to evict the property before the lease period expires if they do not pay the rent on time. Some legal and social problems will emerge when the new Law enters into force, however. Mr. Qishawi explained that some provisions of the Law “strike a balance in the relationship between landlords and tenants. On the other hand, it prescribes arbitrary provisions against tenants.”
In the ensuing discussion, the audience made several interventions and recommendations. Most importantly, Law No. 5 of 2013 on the Lease of Properties does not pay attention to tenants, nor does it safeguard the right to affordable housing. To materialise social justice, the Law should have accommodated needs of all social groups.
These legal encounters were organised with support from Konrad Adenauer Stiftung, Palestinian Territories.
