Repercussions of a Sale That Turned Out Not Happening – part II | Beit Din Eretz Hemda - Gazit | Beit Midrash

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Case: In 2013, the plaintiff (=pl) sold a "residential unit" to the defendant (=def), who planned to rent it out, for 380,000 NIS; def paid 38,000 NIS. Pl allowed def to do major renovations in the unit before further payment. Def discontinued payment, and the sides went to secular court to determine blame for the sale stalling. In 2016, the court ruled that def was in breach of contract and must vacate the unit. In the meantime, def controlled the property for 35 months. During almost all of this time, def received rent. Pl demands to receive the rent def took; neither side knows the exact amount received. The sides also disagree about damages to the unit during this period, with pl claiming he paid a contractor 30,000 NIS to fix them. Pl also wants def to pay for expenses of the sale, which became moot – lawyer’s and realtor’s fees and mas shevach (tax on real estate appreciation). Def claims to have spent 67,000 NIS on renovations, which made the unit fit for rental, and he demands to be reimbursed. Def also wants to invoke a statute of limitations on many of pl’s claims.

Ruling: [Last time we discussed how much rental proceeds def must give to pl.]

P'ninat Mishpat (802)

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The contractor told a different story from that which pl did. He did not charge specifically for fixing def’s damages but generally improved the unit (especially regarding leakage). Def admitted to doing some damage (to electricity and uprooting the outer door) in order to get the last tenants to leave. Beit din estimated those damages, as it would not be cost effective to hire an expert for these, smaller charges.

The question emerges from the following point. Pictures from various occasions indicate that some damage took place from the time that def vacated the unit until pl took charge, as the uprooted front door enabled trespassing; a trespasser apparently damaged the unit. The Yad Ramah (Bava Batra 2b) obligates someone who, due to negligence in his own property, enabled thieves to steal from his neighbor’s property. The Rama (Choshen Mishpat 155:44) cites those who agree and disagree (Rosh) with the Ramah’s opinion, without deciding between them, and Acharonim disagree which to accept. However, even according to the Rosh, there is at least a moral obligation to pay, and our arbitration agreement authorizes beit din to levy payments according to its judgment even for moral obligations. Beit din obligates def in two thirds of its estimation of the damages even though it might have been done by others due to def’s actions to pl’s property.

Regarding improvements that def made, the rule is that if one makes improvements in another’s property without permission, and the owner would have had the improvements done at some point, the owner must pay their fair value (Shulchan Aruch, CM 375:1). A witness said that before the improvements, the unit was uninhabitable. The same is true when the improver did it after what appeared to be his purchase, but the purchase was nullified (ibid. 232:14). Def did not prove that he improved the unit by 67,000 NIS, but since he is obligated 56,550 NIS, he is believed enough to not pay that money.

We will finish off the final elements next time.

P'ninat Mishpat