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Ruling:Four questions have to be determined before formulating a compromise: 1) Should pl have reducted his tenants rent? 2) Were def’s renovations justified? 3) Did pl lose his right of compensation by not protesting the plans? 4) Are pl’s losses direct enough to warrant payment?
1) The Shulchan Aruch (Choshen Mishpat 312:17) says that if a rented property is damaged during the rental period, thus lessening benefit from it, the tenant still has to pay in full because the damage is "his bad luck." In this case, though, the upcoming renovations were a known fact at the time of the renting, and the apartment’s value was already reduced. While one might claim that the tenants accepted the inconveniences and cannot demand a refund, it is clear they were unaware of the extent of the disturbance and would not have rented the apartment (at full price) had they known.
The tenants cannot void the rental due to "blemishes," as the situation would be livable for most people and because they continued to live there and did not demand to back out of the rental. However, it is likely that they overpaid considering the situation. While the laws of returning mispricing do not apply to real estate (Shulchan Aruch, CM 227:35), it is still forbidden to overprice (see S’ma 227:51), and therefore pl was correct in rectifying that (although one can argue whether it is necessary if the landlord was also unaware of the full impact of the renovations). Furthermore, here the overpricing is not because of a lack of knowledge of prices but based on serious blemishes, and blemishes are grounds for grievances even regarding land (see Shulchan Aruch, CM 232).
2. In apartment buildings, every owner has ownership of his apartment and partial ownership of joint areas. There is also an ongoing relationship, which governs the exercising of one’s personal rights when it affects others. It is accepted in our society that owners have the right to do renovations even though it causes hardship to others. Considering that at some times one builds and another suffers, while at other times others build and the previous builder suffers, this arrangement is beneficial for society. While there are standards of behavior that are expected to be kept by the builder, there is no proof that def did not do so.
[We will continue next week.]
P'ninat Mishpat (829)
Various Rabbis
247 - Closing the Door on the Window Maker
248 - An Apartment that Was Barely Livable
249 - An Apartment that Was Barely Livable
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Various Rabbis
Various Rabbis including those of of Yeshivat Bet El, such as Rabbi Chaim Katz, Rabbi Binyamin Bamberger and Rabbi Yitzchak Greenblat and others.

Moreshet Shaul Moreshet Shaul: A Crown and its Scepter – part II
Based on Siach Shaul, Pirkei Machshava V’Hadracha p. 294-5

P'ninat Mishpat P'ninat Mishpat: Problematic Lights?
based on appeal of ruling 84085 of the Eretz Hemdah-Gazit Rabbinical Courts

P'ninat Mishpat P'ninat Mishpat: A Contractor’s Leaving the Job in the Middle – part III
based on ruling 84013 of the Eretz Hemdah-Gazit Rabbinical Courts

P'ninat Mishpat P'ninat Mishpat: Smoking Rights in a Rental? – part I
based on ruling 85076 of the Eretz Hemdah-Gazit Rabbinical Courts

P'ninat Mishpat P'NINAT MISHPAT: A Mess of Loans, Repayments and Grievances – part II
based on ruling 83033 of the Eretz Hemdah-Gazit Rabbinical Courts
Lessons
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