In 1997, Scott, a US citizen, bought a luxury penthouse with a
floor area of approximately 100 sq.m. in one of the high-end areas
of Jerusalem. Some of the time, the property was used as the
family's residence, and the rest of the time – it served
as an investment property and was rented to tenants.
Approximately 10 years after the purchase, Scott decided to sell
his rights in the property. He received an offer that would have
netted him a handsome profit, and the parties commenced
negotiations. Simultaneously, the potential buyer's lawyer
conducted several preliminary examinations, and found that only 25
sq.m. of the property had been built pursuant to lawful building
permits, while most of the property was built in violation of the
permits.
