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(Based on ruling 81022 of the Eretz Hemdah-Gazit Rabbinical Courts)

Unpaid Rent during Corona


Beit Din Eretz Hemda - Gazit

Cheshvan 5 5783
Case: An organization (=pl) rented out a building to a yeshiva (=def). The contract called for reduced payment of rent (20,000 NIS monthly) but added that def was responsible to pay for renovations. Def closed during the year, due to the Corona pandemic, and did not finish rental payments. Also, upon moving out, def took with them some things (air conditioning, light fixtures) they had installed. Pl claims 85,000 NIS in rental fees, compensation for the things def took, and a penalty for late payment of rent. Def originally admitted owing money and asked for an extension until the municipality paid promised funds. Subsequently, def demanded a reduction in rent because they did not use the building during Corona. Regarding the things removed from the premises, they claimed they were mostly things that are not part of the building.

Ruling: Corona discount for the rent: Def’s initial agreement to the rental payment is considered a binding admission of obligation, and therefore we do not accept the new claim of partial exemption. Furthermore, the exemption due to a makat medina (a broad problem that prevents use of something rented – see Bava Metzia 105b) does not apply here, because many yeshivot were able to use their buildings during the pandemic. Therefore, def has to pay the unpaid rental fees in full (85,000 NIS).
Payment for removed improvements: Beit din accepts pl’s fundamental claim. First, the contract requires def to leave whatever they permanently installed into the structure, which applies to air conditioning and light fixtures. Secondly, the contract requires def to provide those things in the renovation for which they were compensated. That which was included in the contract is binding based on two kinyanim: 1. Chatzer – pl’s property acquired that which was placed into in. Although there is a machloket of whether kinyan chatzer works with property that is rented out (see Shulchan Aruch, Choshen Mishpat 313:3 and Acharonim ad loc.), since the contract says that the provisions shall take effect "in the best possible way," we accept the opinions that it works. 2. Situmta (societally accepted finalization – see Shulchan Aruch, CM 201:2) – Whatever is stipulated in a signed, written contract is considered binding.
However, beit din reduces (by 8,211 NIS) the amount due on the air conditioning, as units that pl was to have received depreciate over the year (fixtures do not).
Late payment – The contract speaks of 400,000 NIS payment without the need to prove damage for delay in implementing the contract. However, beit din agrees with def that the lateness penalty is for def not leaving the building at the end of the contract, not for payment.
Cosigners: Since the yeshiva has folded and is unable to pay, the cosigners are responsible to do so. One cosigner claimed he did not read the contract he signed. It is not clear what he thought he was signing, and such claims are anyway non-starters (Shulchan Aruch, CM 45:3). The second cosigner agrees that he is obligated. The Shulchan Aruch (CM 132:3) brings two opinions on whether a creditor can extract the entire obligation from either cosigner. Since the matter is not clearly decided, pl must ask both cosigners for payment, and only if one does not pay, may pl demand the second half as well from the cosigner who paid.

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