Preferential Marketing May Constitute Discrimination
According to minutes from a hearing conducted by the Israel Lands Authority’s Central Committee for Gindi Holdings, preferential marketing and granting benefits may constitute discrimination. The committee stressed that purchasing groups are also obligated to equality.
In April 2019, the Israel Land Authority’s Tenders Committee demanded, following a complaint by the Association for Civil Rights in Israel, that Gindi Holdings pay 1,000,000 NIS in compensation after the company marketed significant discounts for its Or Yehuda housing project to members of the “Hever” organization, despite the fact that the company had committed not to discriminate in marketing its real estate.
Minutes of the hearing, which were transferred to ACRI following a freedom of information request, demonstrate how the company discriminated against the general public. According to the minutes, Gindi signed a marketing agreement with “Hever,” a consumer club; Club membership is granted primarily to those currently serving or those who formerly served in Israel’s security forces.
The company later launched an advertising campaign targeting Club members, and only in the fine print did it note that the general public would also be able to purchase apartments in the Or Yehuda real estate project. Club members were also given significant discounts - ranging from 250,000-400,000 NIS- when purchasing apartments, as well as benefits pertaining to payment methods, which were not offered to the general public.
Gindi Holdings also committed to “Hever” not to grant discounts or benefits to members of the general public who were interested in apartments during the sale. Gindi also committed not to sell apartments at better prices to non-Hever members for three months after the conclusion of the sale for Club members. As a result, 250 apartments were sold to “Hever” members, and only 23 were sold to members of the general public.
“This is a result that, according to the Committee, indicates discrimination based on preferential marketing and harsh conditions drawn up for the sale of apartments to the general public, as opposed to the more lenient conditions given to members of “Hever,” which essentially blocked the general public from purchasing property in the project,” according to committee members. The committee also rejected Gindi’s claim that a company can give preference to military veterans, and clarified that commercial companies cannot offer the same discounts granted by government bodies.
Committee members stated that developers, as well as acquisition groups, cannot discriminate when marketing real estate. The committee also noted that even if there was no intent to discriminate, discrimination will be determined according to results and actions that led to the discriminatory result.
The head of ACRI’s social rights and equality unit, Attorney Gil Gan-Mor, said in response: “The Israel Lands Authority decision is important and justified, and developers given land to establish a housing project cannot designate the land exclusively for a specific group. That is discrimination. The fine imposed is relatively low, as it is a precedent, but if this happens again the fines will increase.”