Shabbat Parashat Behar 5776

Pninat Mishpat: Agent’s Fee for a Sale Cancelled After Contract

Case: The plaintiffs (pl 1, pl 2) are in-laws who signed a contract to buy an apartment for their children, with the help of an agent (def), whom they paid. The bank turned them down for a mortgage because part of the apartment was built illegally (one room appears in the Land Registry as a balcony) and the apartment which they were told is 70 sq. meters is registered as 52 meters. Pl sued the seller in a beit din and received a ruling that stated the sale was void due to mekach taut (misinformed sale). Pl demand that def return the agent’s fee, as he withheld pertinent information, which, as a friend of the seller, he certainly had. Def claims that the first beit din made a mistake, as a converted balcony is not grounds for mekach taut. He points out that pl are satisfied with the apartment as it is, and 70 meters are indeed usable. Def denies knowing about the apartment’s legal status, which buyers should check themselves at the Land Registry.

Pl 2 asked def to find a renter for the apartment, which he did, and def is countersuing for an agent’s fee for this. Pl 2 responds that since the rent is now going to the seller, as the sale was cancelled, the seller should pay the fee.

Ruling: Pl did not prove that def was aware of problems with the apartment.

Does an agent receive his fee for brokering an agreement that was made but not brought to fruition? The Rama (Choshen Mishpat 185:10) says that there are different local practices of whether a matchmaker, whom he compares to a commercial agent, receives his fee from the time of engagement or the time of marriage and that this determines whether he receives pay if there is a broken engagement. (Israeli law talks about an agent as being the one to bring the sides to a binding agreement.) The Maharshal (Bava Kama 10:39) says that the shadchan is deserving once he brings them to an agreement that includes a penalty for breaking it (tenaim).The Aruch Hashulchan (CM 185:11) adds that in that case, the side that breaks the engagement has to return the other side’s part of the shadchan fee, but the shadchan does not return anything.

The matter is different, though, when mekach taut causes the sale to be naturally void, as just as the sale was a mistake from the outset, it turns out that there was never the basis for the fee. However, in our case, the contract sets special financial provisions (penalties) for the case that problems in the apartment are uncovered, which included the possibility of upholding the sale and making financial adjustments (which does not exist according to halacha). Thus, this sale was not naturally void even in the case of serious illegal construction. The wording of the contract makes it clear that even contradictions between what they were told and that which is in the Land Registry do not void the sale, except that an appendix to the contract made it possible to back out if they could not receive a mortgage.

The ruling of the previous beit din does not impact this case. While beit din does not contradict the ruling of a previous beit din, that is only in regard to the specific issues and litigants involved. It does not mean that another beit din has to accept the assumptions of the previous one in different contexts.

In summary, def does not have to return the fee he was given. However, he is not entitled to a fee for the rental agreement because according to Israeli law, an agent’s fee is not due when there was no signed agent’s contract, which is the case here. Although halacha can obligate the party due to the benefit he received from the agent, this does not apply here since there does not turn out to be benefit.

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