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Beit Midrash Series P'ninat Mishpat
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Damages of Delay in Home Construction – part II

The plaintiff (=pl) bought from the defendant (=def), a real estate developer, an apartment “on paper.” Their contract set, among other things, a date for receiving a completed apartment. Def missed the date by a wide margin. [Much of the p’sak deals with compensation for the buyer during the delay]. During August 2014, def sent letters to buyers indicating that the apartments would be ready soon and recommending signing up their children in local schools, which pl did. The apartment was ready only in Oct. 2015. In the meantime, two of pl’s three children went to school in the new city while the family remained where they were (16 kms away). Pl demands compensation for the need to buy a second car and the price of transportation. Def argues that such damages are too indirect to obligate, that many of the claimed expenses are exaggerated, and that the legal obligations to compensate a buyer for delays at a high rate for rental is meant to cover side expenses such as these.
---- ---Adar II 28 5779
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Based on ruling 76070 of the Eretz Hemdah-Gazit Rabbinical Courts
P'ninat Mishpat
Rabbi Yosef Goldberg
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3 - A Will That Was Not Publicized
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Case:
The plaintiff (=pl) bought from the defendant (=def), a real estate developer, an apartment "on paper." Their contract set, among other things, a date for receiving a completed apartment. Def missed the date by a wide margin. [Much of the p’sak deals with compensation for the buyer during the delay]. During August 2014, def sent letters to buyers indicating that the apartments would be ready soon and recommending signing up their children in local schools, which pl did. The apartment was ready only in Oct. 2015. In the meantime, two of pl’s three children went to school in the new city while the family remained where they were (16 kms away). Pl demands compensation for the need to buy a second car and the price of transportation. Def argues that such damages are too indirect to obligate, that many of the claimed expenses are exaggerated, and that the legal obligations to compensate a buyer for delays at a high rate for rental is meant to cover side expenses such as these.



Ruling: [Last time we saw that there are generally grounds for payment. Now we will see the extent to which the claims were justified without going into the details.]

Def claimed that if there were great expenses, pl should have returned their children to local schools. However, pl’s claim that it is not reasonable to switch young children back and forth is logical. This is especially true because throughout this time, it was unclear how long the delay would be.

On the other hand, before the school year began, pl was (or should have been) aware that there would be a significant delay in moving into the apartment. Thus, misinformation received from def did not force them into the schooling decisions. In such a case, one cannot extract money from the one who put them into a position of possible loss that they should have gotten out of (see Rambam, Zechiya 6:24).

However, we must look at the damages within the framework of def’s professional obligations toward pl, based on the following sources. If one hired someone to work and the work became impossible to carry out, if it was the employer alone who should have been aware of the situation, then he has to pay the employee (Bava Metzia 77a). We see that not informing the other side to the agreement of what he needs to know is held against the one who had the knowledge. This is also required by the legal requirement of honesty in business dealings. Therefore, we will obligate def in some of the losses that resulted from decisions pl took without the benefit of the information def was obligated to provide.

One basic rule of determining the amount of such expenses is that they need to be proven (Rambam ibid.; Rama, Choshen Mishpat 14:5). When the level of expense is unproven, we are to estimate conservatively (Pitchei Teshuva, CM 14:16). Beit din also has to confirm that the circumstances justified that level of expense (Shach 14:16).

Based on these principles, beit din did calculations and applied compromise as appropriate.
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