How Toronto Siblings Cleared a Neighbour's Encroachment and Sold in Full

Result: 46 square metres of encroached land recovered and a NIS 2,450,000 sale completed at the agreed price · Timeline: 7 months · Challenge: Neighbour's structures stood inside a registered boundary for twelve years · Authority: Magistrates' Court, with the Land Registry record and a licensed surveyor's measurement · Financial Impact: NIS 210,000 price reduction avoided, NIS 40,000 in costs recovered

Background

Two siblings, one in Toronto and one in Vancouver, inherited a stone house on a 640 square metre plot in a Galilee town when their mother died in 2011. Neither of them lived in Israel. The house was let for a few years, then stood mostly empty with a local caretaker looking in, and the family visited roughly every third summer. In early 2025 they decided to sell, signed with a broker, and accepted an offer of NIS 2,450,000 within six weeks.

The buyer was taking a mortgage, and his lender required a current surveyor's measurement. The surveyor's map came back showing that the neighbour's paved terrace, a block storeroom and a stone retaining wall all stood inside the plot, together covering about 46 square metres along the eastern boundary. Comparing photographs, the family worked out that the terrace had gone up around 2013, roughly two years after they inherited. Nobody had told them. The buyer's lawyer did the obvious thing and asked for NIS 210,000 off the price, or a clean boundary before completion.

The Challenge

The neighbour's answer, when his lawyer wrote back, was the one absentee owners abroad most fear. He had used the strip openly for twelve years, he had built at his own expense, and he offered to buy it at what he called its agricultural value. His letter also invoked Section 21 of the Land Law 5729-1969 and required the owners to choose within six months whether to keep the structures or demand their removal.

That letter was more dangerous than it looked, and not for the reason the family assumed. Section 21 gives the choice to the owner of the land, not to the builder. But Section 22 provides that an owner who does not make that choice within six months of receiving a written demand from the builder is treated as having chosen to keep the structures. And Section 24 then requires the owner who keeps them to pay the builder either his investment at the time of building or the value of the structures when the choice is exercised, whichever is lower. So a letter in Hebrew, sent to a house nobody was living in, could have converted the family from wronged owners into purchasers of a terrace they did not want, at a price set by somebody else's spending. The clock had already been running for five weeks by the time it reached Toronto as a photograph of an envelope.

What defeated the rest of the neighbour's position was the register. The land was settled land, recorded in the Rights Register by block and parcel, and Section 125(a) of the Land Law 5729-1969 makes that entry conclusive evidence of its contents. Section 159(b) then provides that the Limitation Law 5718-1958 does not apply to a claim to establish a right in settled land, which is why twelve years of use, or fifty, cannot ripen into ownership of registered Israeli land. Possession does not become title here. The acquisition route the neighbour was reaching for, under Section 23 of the same Law, allows a builder in good faith to buy the land at its value without the structures, but only in unregistered land, and only where his investment exceeded the land's value and the purchase would not seriously harm the owner. None of those conditions was available to him, and the first was decisive on its own.

In Practice: Under Section 21 of the Land Law 5729-1969 the choice between keeping a structure built on your land and demanding its removal belongs to the landowner, but Section 22 deems the owner to have chosen to keep it if he does not answer a written demand within six months, and Section 24 then makes him pay the builder the lower of the investment or the current value. For an owner abroad whose Israeli address is an empty house, that six-month clock is the single most expensive provision in the chapter. We answered the neighbour's letter 11 days after it reached Toronto.

What We Did

The first step was procedural and took an afternoon. We wrote to the neighbour's lawyer in Hebrew, on the record, exercising the Section 21 choice in favour of removal and expressly reserving every right, which stopped the Section 22 clock and closed off the deemed-purchase trap before anything else was decided.

Then we bought our own evidence. The buyer's surveyor worked for the buyer, so we instructed a licensed surveyor of our own to produce a measurement map keyed to the original settlement boundary marks held by the Survey of Israel, not to the fence lines on the ground. Fences move. Settlement marks do not, and in a Galilee town where the parcels were settled decades ago the marks are usually still findable. The two maps agreed to within half a metre, which mattered later, because the neighbour's first response to any measurement was to dispute it.

We took a power of attorney from both siblings so that neither had to fly. It was executed before the Israeli consulate under Section 50(a) of the Notaries Law 5736-1976 for the sibling in Toronto, and for the one in Vancouver, who could not get a consular appointment in time, before a local notary with an Ontario apostille and a Hebrew translation certified in Israel under Section 15 of the same Law. Canada has issued apostilles since 11 January 2024, and Ontario issues its own rather than routing through Global Affairs Canada, which saved about two weeks.

With the position secured we filed a claim in the Magistrates' Court for delivery of possession under Section 16 of the Land Law 5729-1969 and removal of the interference under Section 17, together with an application to restrain any further construction pending judgment. Section 51(a)(3) of the Courts Law [Consolidated Version] 5744-1984 gives the Magistrates' Court claims concerning possession or use of land whatever the value at stake, so the venue was straightforward even though the plot was worth well over the ordinary monetary ceiling.

We also looked hard at the commercial solution and rejected it. Selling the neighbour the 46 square metres would have needed a subdivision of the parcel, which needs planning approval before it can be registered, and on local timelines that meant a year at best. The sale contract could not survive it. The buyer wanted a clean boundary at completion, not a promise about a future parcellation, and once we understood that, the negotiation stopped being about price per square metre.

In Practice: Section 159(b) of the Land Law 5729-1969 disapplies the Limitation Law 5718-1958 to claims to establish a right in settled land, and Section 125(a) makes the Rights Register conclusive evidence, so long possession of registered Israeli land creates nothing. The measurement that proves it costs about NIS 3,800 for a single plot from a licensed surveyor, takes two to three weeks, and is the document the Magistrates' Court works from under Section 51(a)(3) of the Courts Law [Consolidated Version] 5744-1984.

The Outcome

The case settled at the second hearing, four months after filing. The neighbour removed the storeroom and the retaining wall, cut back the terrace to the surveyed line and moved his fence, all within the 60 days the settlement gave him, and paid NIS 40,000 towards the surveyor and legal costs. The buyer's lender accepted a fresh measurement map showing the boundary clear, and the sale completed at the full NIS 2,450,000 seven months after the first surveyor's report landed.

The tax side ran in parallel and without incident, on the ordinary track for a non-resident seller: the self-assessment declaration to the Israel Tax Authority within 30 days of the contract, a withholding certificate obtained so the buyer could release the balance of the price, and the Israeli tax then reported in Canada against the siblings' own capital gains, where the Canadian credit covers Israeli tax properly imposed rather than tax that could have been reclaimed. Their Canadian accountant had also been filing the foreign property form each year on a plot whose cost exceeded the CAD 100,000 threshold, which turned out to be the one piece of the file nobody had to reconstruct.

The part the siblings found hardest to accept was that none of this was close. Their neighbour had a genuine belief he had acquired the strip, and in a jurisdiction with adverse possession he might have. In Israel he had nothing, and the only real risk in the whole matter was a letter sitting unopened in an empty house while a six-month clock ran.

Key Takeaways

What this case illustrates for non-residents in similar situations:

1. Long possession of registered Israeli land creates no rights. Section 159(b) of the Land Law 5729-1969 shuts out limitation claims in settled land, and Section 23's acquisition route is available only in unregistered land, so a neighbour's twelve years of use is a negotiating posture rather than a legal position.
2. Answer a Section 21 demand in writing and quickly. Six months of silence under Section 22 makes you the owner of the structure and, under Section 24, its purchaser at the builder's figure.
3. Commission your own surveyor keyed to the settlement marks. A buyer's map is evidence for the buyer, and fence lines prove nothing about a boundary that was fixed at settlement.
4. Have a current Israeli address for service and somebody who opens the post. Almost every expensive surprise in this file began with a letter reaching Canada weeks after it was sent.
5. Fix the boundary before completion rather than promising to fix it afterwards. A subdivision needs planning approval and outlives most sale contracts, which is why removal, not a sale of the strip, was the only remedy that fit the timetable.

---

Facing a Similar Situation?

If you own Israeli land you rarely see, a measurement before you list it costs a fraction of the discount a buyer will ask for once his own surveyor finds something. Our guide to selling Israeli property as a Canadian resident covers the tax and completion mechanics on both sides of the border.

Contact us for a confidential consultation about your Israeli legal matter.