Beit Midrash

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Dimei Mafteiach Rights to an Apartment


Various Rabbis

[ Background: D’mei mafteiach (key money) is a real estate agreement in which a "renter" pays for a percentage of the sales value of a property without receiving ownership. Rather, it allows him to live there for the rest of his life at a low rent. The renter is protected from abuses by "The Law of Protection of the Tenant" (=LPT). One of the rules that sometimes applies is that the renter can transfer his rights in the apartment to a new tenant for a percentage of the key money.]
The d’mei mafteiach agreement that was signed at the outset stated that the renter (=pl) could live as long as he wants in the apartment, unless the landlord’s son (=def) married and needed it, in which case pl must vacate and either receive much of the d’mei mafteiach money or other living quarters. Indeed, def had married and pl had been asked to vacate and was offered money or other living quarters, but did not deem either option acceptable. Def did not have him legally evicted. Now, pl wants to transfer his rights to the property, and def refuses to approve the deal.

Ruling: LPT is halachically binding based on the halacha that the people of a city may make rules to govern prices in a variety of circumstances (Shulchan Aruch, Choshen Mishpat 231:27). The idea that the landlord cannot evict the tenant has halachic basis, as a renter needs proper warning before being asked to leave. The parameters are based on the likelihood of finding a suitable alternative (Shulchan Aruch, CM 312:6), so it is possible to say there is no alternative.
Although society may implement such legal innovations only when there is no "great person responsible for the community" (Shulchan Aruch ibid.:28), that refers to penalties to enforce the enactment. They can set the prices in the first place. Furthermore, Rashi (Bava Batra 9a) says that it is necessary only for the rav of the city to not protest, which has been the case regarding d’mei mafteiach. Since this system is a major part of the real estate financial fabric [today, less so], questioning its viability would destabilize the market and therefore it is in society’s benefit to uphold the practice.
Although the original contract ceased and was not renewed, since the renters continued living there, we presume the old conditions to continue (based on Shulchan Aruch, ibid.:9). The issue here is the contract’s provision that pl must vacate if def needed the apartment, which he did. Despite pl’s protestation that the alternative apartment offered was "a stable, not an apartment," the contract indicates that the landlord could either offer alternative quarters or return a portion of the key money. This was written as an obligation on the landlord, not a condition to enable eviction. Pl’s continued living in the apartment was thus improper. While there is evidence that def accepted the situation under duress, we have indications that this was for no more than his continued occupation of the property, not for him to be further covered by LPT. Therefore, pl does not have the right to sell his rights under this law to someone else.
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