Heftsiba victims demand help from banks, gov't

Apartment buyers left in the lurch by the collapse haven't received promised funds.

Heftsiba 224.88 (photo credit: Ariel Jerozolimski [file])
Heftsiba 224.88
(photo credit: Ariel Jerozolimski [file])
Only one day after the Knesset passed a landmark bill seeking to protect home-buyers from the collapse and bankruptcy of construction companies and contractors, the victims of the collapse of the Heftsiba building company were back in the Knesset Tuesday, arguing that the government and banks had still not lived up to their promises. A large portion of the discussion Tuesday morning was dedicated to the question of the NIS 15 million that the government promised to hand over to help subsidize the financial solutions to the crisis. As part of the original agreement following the collapse of the Heftsiba company, Israel's banks had agreed to help bail out the apartment buyers on the condition that the government also helped shoulder the expenses. But on Tuesday, the Finance Committee was informed that none of the money had been delivered, as Construction and Housing Minister Ze'ev Boim was still waiting for the sum to be transferred from the Finance Ministry. But during the hearing, Finance Ministry representatives denied that Finance Minister Ronnie Bar-On planned to transfer the NIS 15 million promised by the state to buyers burned by the collapse of Heftsiba. But later in the same hearing - after MK Reuven Rivlin (Likud) said that he had spoken with Bar-On, and that the finance minister had committed to "positively check" the matter of allocating the necessary funds still withheld from Heftsiba victims - the ministry changed its tune. Before the stormy meeting closed, ministry representatives sent a text message to the cellular telephone of Committee Chairman MK Stas Meseznikov (Israel Beiteinu) saying that the minister "was consulting with his legal advisers" and would weigh passing on the sum to the Housing Ministry for distribution to the buyers. "After we passed a law yesterday evening to shape the future and create order in the sale of apartments and the real estate market, we now must take care of the damage done in the past by the Heftsiba crisis," said Rivlin, who together with Meseznikov sponsored the bill that was approved Monday evening. Heftsiba buyers present during the hearing expressed their frustration with the ministerial funding foot-dragging, yelling "all these wars are being carried out on our backs! We pay taxes, we support the country and this is how we're treated?" The buyers and their representatives also complained that some of the banks - particularly Bank Leumi - had not complied with the government instructions to freeze payments on their mortgages for six months. Bank representatives, however, argued that they had, in fact, complied with the law. Less than one day earlier, the Knesset approved a law known as the "Heftsiba Law" designed to protect homebuyers from future cases in which the builder declares bankruptcy. The new law, which was passed with 59 MKs voting in favor and none opposing, increases the oversight on building companies as well as on the banks which lend the money for the building projects and frequently for the would-be buyers' mortgages as well. The law mandates that the bank that funds a building project will issue payment certificates for each apartment and will turn them over to the seller, who will in turn hand them over to the would-be buyer. These certificates will be the only way that the builder will be allowed to receive payment for the transaction. In addition, Housing Minister Ze'ev Boim was charged with appointing a ministry employee to oversee the execution of the law. Once a year, that appointee must submit a report to the Finance Committee regarding their activities on the topic. Violation of the new law could entail a monetary fine of up to NIS 1 million, but the law also emphasizes that criminal responsibility will not be placed on the bank employee, but rather on the bank itself.