Repercussions of a Sale that Turned Out Not Happening – part III | 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 only 38,000 NIS. Pl allowed def to do major renovations in the unit before further payment was made. 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 had him vacate the unit. In the meantime, def had control over the property for around 35 months. During almost all of this time, def received rent from renters (the court had assumed, as of 3 months before it was returned to pl, that it was 60,000 NIS). The sides agreed that beit din should accept the court’s findings as the binding basis of the adjudication in beit din. Pl demands to receive the rent def took; neither side knows exactly how much def received. The two 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 wants to invoke a statute of limitations on many of pl’s claims.

Ruling: We end off with pl’s claim of unneeded expenses and def’s claim of statute of limitation.

Expenses: The source to obligate one who causes another to lay out expenses that turn out to be unnecessary is the following Rama (Choshen Mishpat 14:5, based on the Maharam Me’rutenberg). If one told his co-litigant to travel to a court for litigation and the former did not appear, he has to pay the latter’s expenses. The Maharam explains that the one who breaks his promise to come implies agreement to cover the consequences. If so, arguably, if he did not imply self-obligation, he would be exempt. However, the Netivot Hamishpat (200:13) reasons that the obligation is based on the rules of semi-direct damages. The Shut Harama (12) posits therefore that if the person who caused the damage was not at fault, he is not obligated.

In our case, while def did not premeditatedly renege on the deal, he cannot claim that it was beyond his control. Therefore, he is obligated to pay for the cost of the lawyer and the realtor. Regarding the sales tax, pl submitted proof that he paid the tax and claims that the authorities refused to return it despite the fact that the sale was nullified. Our understanding of the law is that the authorities must return the tax payment, and pl can appeal. Therefore, we will not obligate def for tax that was paid unless an appeal’s court rejects pl’s request of reimbursement.

Statute of limitations: This concept is against the halacha (see Ketubot 104a). It developed over the centuries out of interests that, according to the poskim, do not fit into the authority of dina d’malchuta, nor do the courts treat it as a regular right (e.g., the relevant litigant must claim it at the first opportunity). Only when a longstanding lack of claim is a likely sign of a falsely contrived claim should beit din prevent its advancement (Shulchan Aruch, CM 98:2).