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Beit Midrash Series P'ninat Mishpat

Chapter 15

Backing Out of a Rental After Checks Were Given

The plaintiff (=pl) rented an apartment to the defendant (=def). When the contract was signed, def gave pl checks for the entire rental period. However, before handing over the contract, pl demanded a security deposit and refused to hand over keys to the apartment, prompting def to back out of the whole agreement. Pl demands that the agreement should stand.
Various Rabbis28 Shvat 5768
3548
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Case:
P'ninat Mishpat (577)
Rabbi Yosef Goldberg
14 - The Option to Indefinitely Extend a Lease
15 - Backing Out of a Rental After Checks Were Given
16 - When a Couple Both Want the House After Divorce
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The plaintiff (=pl) rented an apartment to the defendant (=def). When the contract was signed, def gave pl checks for the entire rental period. However, before handing over the contract, pl demanded a security deposit and refused to hand over keys to the apartment, prompting def to back out of the whole agreement. Pl demands that the agreement should stand.

Ruling: The Shach (Choshen Mishpat 190:1) says that one cannot acquire land by presenting the seller with loan contracts of those who owe money to the buyer. This does not serve in lieu of money, which is a kinyan (act of acquisition) for land, because the seller lacks confidence that he will receive money included in the contracts (the buyer could relinquish his rights to receive payment from the debtors). However, the K’tzot Hachoshen (190:1) and the Netivot Hamishpat (190:1) say that the seller does not fear the relinquishing of the debts because if this occurred, he would simply demand the money from the buyer. According to them, loan contracts are equivalent to money and constitute a kinyan.
The case of a check is the equivalent of a loan contract, in that in general the check enables one who possesses it and has it in his name to collect the money, whereas it is possible that the account holder will cancel the check. Therefore, according to the latter poskim we do not have to fear that the checks will be cancelled and the kinyan is valid to acquire the rental of the property.
The Rashba (Shut I, 1028) says that if one rents property for a year and dies in the middle, the inheritors must pay the balance of the rental because rental is a full acquisition. However, the Shach (CM 334:2) says that, according to Tosafot, rental is not a kinyan but only a mutual obligation between landlord and tenant. Based on the Rashba, we can say that since the kinyan took effect, pl was not allowed to withhold the key to the apartment. However, that does not mean that def could back out of the agreement due to pl’s breach. Rather, he should have compelled pl to allow him into the apartment. According to Tosafot’s approach of mutual obligations, it follows that if one side is not fulfilling his obligations, the other one does not have to do so either. However, Tosafot’s and the Rashba’s argument applies when the payment is made at the end, whereas if the renter pays in advance, all should agree that the rental is finalized as a kinyan.
The Netivot (312:5) says that the landlord has a personal obligation to provide property for the renter so that if he sold the property to a non-Jew, he has to find him another home. Based on this, we could say that since pl does not want to provide the apartment, def can back out of the agreement. However, that applies only when the renter has no other remedy, but when the apartment is fit for occupancy, def may not back out but should compel pl to allow him to occupy his house.
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