Daijiworld Media Network - Jerusalem
Jerusalem, Oct 29: Israel’s High Court of Justice has urged Keren Kayemeth LeIsrael-Jewish National Fund (KKL-JNF) to resume negotiations over the future of hundreds of homes built on former Greek Orthodox Church land in Jerusalem, questioning why discussions had stalled since July 2025.
Justice Dafna Barak-Erez told KKL’s lawyer that the court wanted to know why negotiations were not taking place, rather than why an agreement had not yet been reached. The court did not decide whether the leases must be renewed but said the case would remain open pending an update on concrete progress in negotiations.
The petition concerns land in Talbiyeh, Nayot and parts of Rehavia, where existing lease agreements are due to expire in the early 2050s. Residents argue that uncertainty over the future of their properties is already affecting home values, access to mortgages and their ability to carry out improvements.
The dispute involves the distinction between owning an apartment and owning the land beneath it. Under agreements signed in 1951 and 1952, the Greek Orthodox Patriarchate leased extensive areas of Jerusalem land to KKL for 99 years. Residents, businesses and institutions subsequently acquired leases through KKL, with the Israel Land Authority (ILA) administering them on its behalf.
The church transferred rights in the land to private investment partnerships in transactions in 2011 and 2016. A group led by US real estate developer Gary Barnett, founder of Extell, later agreed to acquire the rights through Karkaot Yerushalayim 2022 Ltd. in a deal worth NIS 750 million signed in 2023. The company says the purchase was completed in early 2024.
The dispute covers more than 500 dunams and includes residential buildings, hotels, public institutions and open spaces.
The petition, filed in July 2025 by 204 residents and other stakeholders, seeks to compel KKL to exercise its renewal rights and prevent it from surrendering those rights through an agreement with the current landowner. Alternatively, the petitioners want an unequivocal commitment that their leases will be renewed.
They argue that KKL acquired and administered the leases as part of a public undertaking to develop Jerusalem and should not leave residents facing uncertainty as the expiry dates approach. They have also cited assurances made in 2017 by then-KKL chairman Daniel Atar that the organisation and the government would work towards a resolution while protecting residents’ interests.
An appraisal submitted with the petition points to substantial differences in property prices between homes on leased land and those on privately owned land. It also warns that shortening lease periods could make mortgages harder to obtain and discourage long-term investment.
At Wednesday’s hearing, petitioners’ lawyer Ilan Sofer told the court that residents were already experiencing difficulties in adding protected rooms and elevators.
KKL maintains that pursuing its interpretation of the renewal clauses through litigation could take years, with no guarantee of success. It believes negotiations could produce a more practical solution, potentially allowing residents to purchase the land rights attached to their apartments.
However, KKL disputes that it has a legal obligation to extend residents’ leases beyond their existing terms. It says it is working towards a solution in keeping with its public mission.
The original agreements provide a mechanism for determining the duration and cost of an extension if the parties fail to reach an agreement. However, the extent of KKL’s renewal rights remains contested. The Greek Orthodox Church, which no longer owns the land, has acknowledged the renewal options but disputes the interpretation that KKL can renew the leases repeatedly or exercise rights equivalent to ownership.
During the hearing, KKL lawyer Alon Gellert confirmed that intensive discussions had taken place in July 2025 but that no negotiations had followed. He cited a change in the organisation’s leadership and the preparation of its response to the petition.
Justice Barak-Erez questioned why the new leadership had not resumed discussions after several months. Gellert subsequently assured the court that negotiations would continue, saying there was an existing basis for resuming talks.
The judges also questioned the ILA’s position that it was merely an outside party. Justice Ofer Grosskopf asked how the authority could consider itself uninvolved when it administered the leases on KKL’s behalf.
Barak-Erez said the state was expected not to remain indifferent to the situation, given its involvement in the original arrangement. The state’s representative said the government was monitoring the broader dispute and referred to legislative proposals that had not progressed. The judge observed that unsuccessful legislative efforts did not remove the state’s ordinary administrative responsibilities.
The company’s lawyer, Zvi Agmon, said his client was ready to resume negotiations immediately and claimed earlier discussions had come close to an agreement. The company has maintained that existing leases remain valid until their contractual expiry dates and says its proposals to sell land rights to residents could offer greater long-term certainty.
However, leaseholders remain divided over the way forward. A lawyer representing another group told the court that his clients had negotiated directly with Extell and already reached an arrangement, arguing that KKL was obstructing its completion.
The Jerusalem Municipality, which has an interest in public properties and spaces on the land, has said it is not responsible for renewing KKL’s leases. KKL and the ILA have also argued that contractual disputes should be heard in a civil court, while petitioners maintain that the High Court should intervene because public bodies have a responsibility to address the issue.
The court left the jurisdictional question unresolved. An earlier request to freeze transactions was rejected in September 2025 after KKL undertook to consult affected leaseholders before signing an agreement concerning their rights. The organisation has also said any agreement would be made public and that affected parties would have an opportunity to challenge it.
The High Court is now awaiting tangible progress in negotiations before deciding how to proceed with the petition.