Eretz Yisroel: THOUSANDS of Chareidim Left Homeless After Major Bankruptcy

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10.jpg(Click HERE to see pictures) Yeshivaworld received the following, disturbing email late Wednesday night:

Dear YW Editor: Cheftziba Construction Company in Israel has gone bankrupt. They sold tens of thousands of apartments still under construction in Beit Shemesh and Kiryat Sefer. Askanim have asked all people who purchased apartments there, and whose apartments are not just on paper but partly built, to move into the apartment TONIGHT before the banks take possession of the buildings. Askanim who are on site say that it’s an unbelievable balagan. There are many families involved, such as my my son with his wife and six children, who sold his tiny two and a half room apartment to purchase a larger one in Kiryat Sefer, and might now be left with nothing except enormous debts.

If I sound a bit exhausted, it’s because I am. I, together with thousands of other families, have been on the phone all night, and saying Tehillim, and running to Beit Shemesh or Kiryat Sefer.

Additional email received Thursday morning: Fifteen complexes throughout the country are being taken by the bank. Most people had no bank guarantee for their mortgages. We were being pressured by both the bank and the company to take out the mortgage for our daughter’s apartment and told that if not, we’d have to pay enormous fines, but refused to do it until we received the bank guarantee, so we only lost the down payment on my daughter’s dira, and not the entire cost of the dira. But thousands of families are left with enormous mortgages and no apartment. My son entered an apartment that had never been sold and is now living there, 24/7 with his family. He’s hoping that at least he’ll end up with that instead of nothing. Since his apartment is just concrete walls without doors etc., and since it’s unlivable, the government won’t see him as really living there. But we’re lucky. Some chashuva large Yerushalmi families lost 4-5 apartments, and will now end up paying those mortgages for the rest of their lives.

An investigation by “Globes” has discovered that Heftsiba Building Development & Investments Ltd. has NIS 800 million in debts, including NIS 460 million owed to suppliers. This figure does not include the company’s bonds. Hundreds of families have invaded apartments that the company built in Modi’in Ilit, a new haredi (ultra-orthodox) town, worried about Heftsiba’s liquidity.

In addition, hundreds of company employees, who have not been paid for months, were notified that the company is bankrupt. At 6 am today, security guards, apparently hired by Heftsiba’s receiver, arrived at the building site to ensure that no construction material would be stolen.


30 COMMENTS

  1. How can you post news with obvious incorrect information, such as;
    “They sold tens of thousands of apartments still under construction in Beit Shemesh and Kiryat Sefer.” TENS of THOUSANDS??? That would mean at least 20,000 apartments!
    or such as;
    “I, together with thousands of other families, have been on the phone all night..”. Again an obvious exaggeration of thousands..
    In any case I don’t understand how some of our frum brothers in Israel are all willing to break the law and go against Halacha by invading buildings which do not yet belong to them. Until the construction is completed and a closing occurs they have no legal right to move in. So what in the world are these people thinking! The Army and Police will be more than happy to arrest all of them and they will be the cause of great Chillul Hashem!

  2. Didn’t the payments for the yet-unfinished apartments cover the costs? What did the contractors do with the money? Or did people sign up but not pay their share?Isn’t there insurance for this kind of problem?

  3. Rebbishe Macher,
    Regardless of whether or not you are technically correct, at least show some sympathy to these people who for no fault of their own are in a horrible situation.

    I think most people if in a position where they stand to lose hundreds of thousands of dollars would try anything to prevent that from happening.

  4. Dvorah,
    Are you a novi? Of course its the yad Hashem, but do you know for certain why it happened? To rush and say they got what they deserved without an ounce of sympathy for your brothers and sisters is disgusting.

    If anything ch”v goes wrong in YOUR life are you also so quick to say its the yad Hashem and to try to understand the message He is sending you, or do you only do that when others have tzaros?

  5. To a Rebbishe Macher,

    My brother, along with many many others, paid for his entire apartment upfront. That is the way things work in Isreal for many. How is moving into the apartment going against Halacha???? a Rebbishe Macher makes you a rav?

    If he hadn’t moved in last night he would be left without a place to live long term. HE is there now in the Kiryat Sefer heat without electricty or running water. What are his options? He has two kids, one newborn and has been living in a underground 2 room apartment for 2 years waiting for the home he was told would be ready a long time ago. He has no money for extra rent.

    I can tell you are not effected by this, just feel the need to minimize the issue obviously not thinking about the poeple involved here.

  6. Dvorah,
    with all the talk recently here on YW about the hafganos in RBS, I thought you were implying that that was the cause for this incident. If I was wrong, I apologize.

  7. Chaftziba was a 40 year old company, and it going bankrupt is like the Federal Bank collapsing) there are 5000 apartment affected by this disaster.

    Also, most people did not recieve a bank guarantee on the mortgages, The company put everyone under tremendous pressure to pay the sum covered by the mortgage, threatening fines etc., if it was not paid “on time”, therefore most people will end up paying the mortgage for the next twenty years without owning an apartment. Yes, I really was up the entire night, and I know many many other families who were also up the entire night. We personally recieved three different phone calls from friends (at one AM, three AM and four thirty AM) warning us about the situation. The apartments on the whole WERE paid for, but because of the lack of a bank guarantee on the mortgage, people stand to lose a lot of money. That’s why they went into their as yet unfinished appartments — hoping not to lose everything. After all, people paid for a finished apaprtment, not one that still has to be completed!

  8. To Joe Schmo and all of you who think that it is ok to move into an apartment which you do not own, you need to speak with your Rov or Rebbe and straighten yourself out. A loss of money, no matter how large, does not give one a right to unlawfully occupy a building or apartment. If the law says that it belongs to a receiver then your son and his friends are ganovim. Poshite ganovim! They were stupid to put down money without a bank guarantee and I am sorry for them for being so stupid. Nevertheless, stupidity does not permit gezeilah.

  9. Dvorah,
    by the way you comment about things which happen in erets yisroel you probably dont live there-probably in the U.S.-i get really annoyed some of your comments (which you probably sent from one of your latest model blackberry(s)/i-phone(s),as you were cruising in the catskills in your brand new latest model Lexus/Bmw/Audi/Mercedes vacation car (your spouse has another similiar kind of vacation car;so do your kids when they pass their test…)with the ice cold air conditioning blowing on you-and you give mussar to those in e.y. most of whom are in a TOTALLY different matsav-How about a little sympathy instead of lessons on Yad Hashem….V’day L’chakeema B’rmizah…..

  10. Dvorah, you are a wonderful woman but you express yourself with a little bit too much ga’avah. A little bit of humility on your part would be a nice touch.

    I would like to know if there will be a fund set up to raise money for these unfortunate families. It appears from the e-mail sent to the YWEditor that these are kollel families at the least if not chareidi families. They have been financially wiped out, literally. I hope there is because I would like to donate to it. Nebech on our Jewish brothers and sisters in Eretz Ha’Kadosh!

  11. Back in the early 1980’s one of the big constructions companies in Netanya went bankrupt and all the buildings they were in the middle of just sat empty. We had friends who owned the airspace of a 5th floor apartment in a building whose construction stopped on the 3rd floor. As a child fo 10 I thought it was a riot. It lay dormant for years until one day construction began again. I don’t recall all the details but I believe some company bought the rights to continue building.
    It was at that point that I realized that no matter how bad off you are, you can never take a chance and pay up front for a phantom home. You are gambling away your life savings in doing this. Purchasing futures on the Chicago exchange is one thing, it is a calculated risk and the investor should only spend what he can afford to lose, these bochrim/young families have lost their savings, destroyed their credit and are still out on the street.

  12. Does anyone have hard information, e.g. what are knowledgeable Israeli real estate lawyers saying to do? What are Rabbonim saying to do? Is there an official receiver and what has he decided to do?

    In the meantime, would everyone who reads this please offer a short tefila: “Ribono Shel Olam, You have the power to do anything You see fit and You have infinite love for Your children. Please, we implore You to have compassion on Your children and give them suitable housing and not make them lose money, as our Sages have taught us that the Torah has pity on the money of Israel. Please also bring all the relevant company officials to do teshuva shleima and make good on all their commitments.”

    BTW, from accounts I’m getting from my son in Beit Shemesh, the hundreds of yungeleit there are showing enormous achdus and cooperation and helping each other overcome the difficulties they face together. Mi ke-amCha Yisroel! It seems like one good outcome of this might well be that those neighborhoods, if and when they are eventually settled (and Hashem can make that happen if He chooses) could well have a lot more achdus and cohesion based on shared experience than many ordinary neighborhoods.

  13. Rebbishe Macher,
    You dare to call these B’Nei Torah Ganovim and stupid, “They were stupid to put down money without a bank guarantee and I am sorry for them for being so stupid…”
    It seems more stupid to me to put yourself in a position, just before Chodesh Ellul, where you have to personally ask Mechilla from every single one of the “stupid” people you referred to!
    Remember, all your Shukelling on Yom Kippur won’t help your Kaporah. Ain Yom HaKippurim Mechaper Al Bain Adam L’Chavero, Ad ShYeshal…
    Be VERY careful, I beg you…

  14. Rebbishe Macher,
    When young families with no business experience are dealing with a reputable company and being pressured to sign on the dotted line or else, I don’t think you can blame them for signing. Especially if people have been doing this for years without any problems. To call them stupid is quite harsh.

    And I also think you should climb down from your ivory tower and be nosei be’ol instead of hitting them while they are down.

  15. To Rebbishe Macher,

    Israeli property law is quite complex, and there are rules relating to “squater’s rights” that allow one who is living in an apartment, even if they have no ownership rights, to stay under certain circumstances. When one does have some degree of ownership rights, as in this case, moving into an apartment can grant you the “first claim” as a debtor on that particular piece fo property; it is not theft.

    IsraeliYid

  16. rebbishe macher i imagine that you mean your comments in a more jestful manner but why try to provoke? it is obviously an extremely difficult situation….

  17. rebbishe macher,
    I would like to see how you would react in this situation;people who have bought a couple of diras for their kids after borrowing from gmachim thousands of dollars;then to find out they could lose everything-they still have to pay for these AND for the diras of the rest of their kids….;Why of course you would go to the kosel and say tehillim to thank hashem B’LAYV SHOLEIM that you got this nisoyon…..with such tsadikim in the velt its a pele otsum that moshiach hasnt yet come…….

  18. Aug. 2, 2007 19:44 | Updated Aug. 2, 2007 20:12
    Buyers warned to steer clear of ‘Heftziba’ homes
    By JPOST.COM STAFF

    Following reports that the real estate company ‘Heftziba’ had gone bankrupt, police on Thursday were preparing to confront those who were planning to break into homes they had signed deals to purchase from the company.

    “Whoever enters the homes will be forcefully evacuated,” police told Army Radio.

    The company owes an estimated 1.2 billion shekels to the public, banks and construction companies.

    Earlier, hundreds of angry haredim across the country forcefully entered homes they had bought from Heftziba, including those in Beit Shemesh, Beitar Illit, Ma’aleh Adumim, Netanya, Petah Tikva, Kiryat Sefer and Jerusalem’s Har Homa, fearing the properties would be seized by the company’s creditors.

    Also Thursday, one of Heftziba’s senior employees tried to commit suicide in Jerusalem’s Crown Plaza Hotel by cutting his veins. He was evacuated in moderate condition to the capital’s Hadassa Ein Kerem Hospital.

  19. makes me very sad to read this. But I wish I could say I was surprised. it is a bad thing – but it often seems that there is no law in Israel & no enforcement.

    To indict a Knesset member who barely did anything wrong (Likud – MK Blumnethal) – that they know how to do. But to allow thousands of people to be hurt like this…..I wonder if the politicians will step up & help.

    Really…it is tragic. It is simply awful that it more & more feels that the “leaders” of Israel are really just out for themselves.

  20. “THOUSANDS OF FAMILIES ARE LEFT WITH ENORMOUS MORTGAGES AND NO APARTMENTS”- scanned the article quickly and thought it was the 2 year yahrekeit story of GUSH KATIF families. You are right many “THOUSANDS OF FAMILIES ARE LEFT WITH ENORMOUS MORTGAGES AND NO HOMES….or parnossa at all” Pretty frightening, no!!!

  21. The comments here are very saddening, as are many of the comments made on the site by people who have no schaychus of what it is liked to live in E”Y, the culture and the business practices. I own in Kiryat Sefer and lived there quite a few years. Anyone who has bought in E”Y knows the score and how things work. The contracts can not be negotiated as the developer of the city own everything and decides on the clauses in the contract. You can not buy if you change something. Take it or leave it. In fact no one owns in Kiryat Sefer. All the apartments are really 50 year leases, which is a common practice in E”Y (except it is more common the 100 year lease). Although this is becoming lease common (I think) this was the regular way of selling property in E”Y, based on the fact that the government never transfered permanent title to anyone on property that they sold.

  22. Devorah; no one knows what you were thinking. But your words were hurtful, or uncaring at best, to those involved.
    To reb mordche, please brush up on your halocheh (or perhaps drop the reb).
    These people did precisely right. As long as they move in before the bank seized then they are repossessing from the people who owe them. Halachikly correct and obviously so. This is called “Toifes” a halocheh principle of taking what can be PROVEN to be yours. Once the bank repossess then it is no longer the creditors and “tefisa” may not be exercised.
    As for corruption, unfortunately it is rampant in Israel. (Statistically ranked as one of the top 10 corrupt countries)

  23. As you can see from this incident, everyone has the potential to be an activist.
    1. You can protest shame parades.
    2. you can rally for shmiras shabbos
    3. you can rally for land for yishuvim
    4. you can rally against destroying outposts
    5. you can rally for better government
    5. you can rally & protest grave desecrations
    6. you can rally & protest to ensure your $$ apt.
    There is always an occurences in life, that will stir your heart & soul and move a person to stand up for their rights and protest for justice.

  24. I don’t understand how anyone can feel anything but absolute sympathy for these poor families. Just put yourself in their shoes for one minute!

  25. 1. “toifes” still needs a “tayna” that you bought it (or it was given as a gift). and it takes three years (or more) of “toifes”. ref: perek chezkat habatim. (its a chazaka, not a toifes)

    2. i feel sorry for these people, but how do you buy / give substantial sums of $$$ without a deed / 50/100 year lease / something from a person that is legally allowed to give it to you? that is to say, if cheftizbah never owned the land, how did they give it to you? and

    3. what is a bank guarantee? it seems, from what i read here, that they sold the property, with an existing lien (otherwise known as already “meshubad”). if so, these people bought land (or rather high rise air over nonexistent air) from someone who specifically told you someone else owns it!

    if so, the lawyers involved should be disbarred, and required to make good! of course, it will never happen. remember the line from the godfather “a lawyer with a briefcase is a license to steal”

  26. I DONT UNDERSTAND WHY THEY WOULD HAVE TO PAY THE MORTGAGES FOR THEY REST OF THIER LIVES, WHY

    WHAT WILL HAPPEN IF THEY WONT? LET THE BANK FORECLOSE ON ALL O F THEM & LOOSE THE DEPOSIT KEEP YOUR HARD EARNED $