The Sasson Report in 2003 introduced criteria for determining the legality of a given settlement under Israeli law. In June 2007, Haaretz reported that 179 of the 600 buildings in Ofra are considered illegal by the Israeli administration.
Ofra is built on private Palestinian land. In a December 2008 report, B'Tselem has argued that while all Israeli settlements in the West Bank are illegal under international law, Ofra is illegal even under Israeli law stating that it violates 3 of the 4 established criteria for legality in the Sasson report. According to the report, while Ofra was authorized in 1979, it was never defined a jurisdictional area, never had an outline plan approved and no lawful building permits were issued. The report added that at least 58 percent of the settlement's built-up area is registered in the Land Registry Office under the names of Palestinians. Ofra residents claim the land was purchased legally from the Palestinians. They contended that the land was purchased legally but suggested that showing documents of the purchases would lead to Palestinian retribution attacks. Land deals are usually kept secret to protect Palestinian sellers.  The Yesha Council accused B'Tselem of trying to remove Jews from their land saying the group "will spare no means - even lies" in order to harm the settlements.
Homes were built on land bought with forged documents. Hundreds of structures in Ofra came under a demolition order from the Civil Administration after the villagers of Ein Yabrud laid a petition at the Israeli High Court of Justice over construction on their private land.
A secret database, published by Haaretz in 2009, confirmed that Ofra was largely built on private Palestinian lands, without approval. In September 2011, the Israeli government set up plans to legitimise the settlement retroactively.
Ofra's settlement fence was built without permits over wide swathes of land belonging to the Palestinian villages of Deir Dibwan and Silwad. The IDF has confirmed that permits were lacking, and undertook to rebuild the fence closer to Ofra within 2012. Top quality soil from this agricultural land is systematically harvested, according to Haaretz 'stolen', for settlement use.