Jack verbally agreed to sell his home to Sam for the sum of two million four hundred thousand dollars. In preparation for the purchase, Sam put his current home on the market and found a buyer ready to close at one million eight hundred thousand dollars. Both sales were steadily progressing when Bobby, a real estate agent, approached Jack and informed him that another buyer was interested in his property. Jack rejected the offer, explaining that he was already committed to Sam. Bobby and his client aggressively persisted, and repeatedly submitted higher offers for Jack’s home. Ultimately, Jack buckled under pressure and accepted an offer for an additional two hundred thousand dollars for his property. Sam was frustrated by the news, especially since he needed to renege on the sale of his own home. He did his best to convince Jack not to back out, but Bobby, Jack’s new agent, was simultaneously helping Jack to justify his two hundred-thousand-dollar decision. Sam was unwilling to pay more than his original offer, let alone create a price war. Sam turned to our Bet Din for assistance.
How should our Bet Din proceed and why?
According to the ruling of the Shulhan Aruch, the sale of real estate is final after money is transferred and the required legal documentation is signed. In the absence of either payment or a legally documented closing, both the buyer and seller are not legally bound to finalize a sale.
Albeit, in many instances reneging in an advanced stage of a real estate purchase can result in penalty fees for damages and the like.
Nevertheless, even prior to the signing of an enforceable agreement between a buyer and seller, there exists a moral and ethical obligation to uphold their verbal agreement. This ethical obligation is recorded in the Talmud and in the laws of the Shulhan Aruch. Our sages labeled one who reneges on his word as an untrustworthy individual. They further expressed their view of one who reneges on a verbal agreement by classifying the offender as possessing unsatisfactory social behavior.
By contrast, our Sages extend immeasurable blessing to men of their word. Hence, aside from earning a fine reputation, Divine providence assists a man who is true to his word.
By Torah law, a third party who wrongfully interferes in a purchase by snatching a deal away from a buyer is publicly denounced by a Bet Din. Such deplorable conduct is not tolerated by a Bet Din and such an individual is labeled as wicked and evil. This severe restriction of wrongful interference applies to any instance in which a buyer and seller had a confirmed verbal agreement to complete a sale. Thus, the restriction is only applicable if the sale would have come to fruition if not for a third party deliberately interfering.
It is important to note, that deal snatching is restricted even if the third party is willing to pay more for the property.
A real estate agent interested in earning a commission is as well included in the above restriction. An agent who is made aware that a property is spoken for, and deliberately interferes by prying away the property, is subject to the same penalty and treatment by a Bet Din. Too often, agents who regularly interact in the market are found guilty of wrongful interference. This restriction is compounded when an agent influences a buyer or a seller to snatch a deal away from another. Serving as an accomplice to such activity is shameful and promotes corruption within our community.
Lastly, although deal snatching is a severe wrongdoing, if a third party interferes and purchases the property, the sale is nevertheless final. Since the original buyer did not have a binding agreement with the seller, he is legally unprotected from a potential snatcher. Apparently, it was the wishes of our Sages that certain business laws be subject to an honor system. As Jews we have a responsibility to live honorably and respectably.
Hence, it is our fervent responsibility not to renege on our word and surely not to deal snatch.
Not long ago, our community interacted with nobility of character and in good faith. Even without extensive Torah knowledge, our grandparents understood right from wrong and naturally conducted themselves in accordance with Torah law. Their ability to do so stemmed from their deep respect and admiration for each other, and from training, which was embedded in their noble spirit.
VERDICT: Fair Warning
Our Bet Din issued a warning to Bobby, the real estate agent, that if he continues to wrongfully interfere with Sam’s verbal agreement to purchase Jack’s property, action will be taken against him. A Bet Din has the halachic right to publicly denounce someone who is wrongfully attempting to snatch a deal from another. Bobby’s interference was detrimental and halachically forbidden, and if he chose to violate Torah law, our Bet Din would have no choice but to subject him to the measures discussed in the Torah law section of this article. Thereafter, our Bet Din explained to Jack the immeasurable blessing gifted to those who honor their word, and the negative consequences in store for those who conduct themselves in an unsatisfactory manner, such as those who renege on their word. Jack acted honorably and sold his property to Sam for the original price agreed upon.
Not long thereafter, Jack contacted our Bet Din to thank us for our guidance. He informed us that Bobby’s client was not approved by the bank for a mortgage to purchase a smaller, less expensive property. Jack explained that had he reneged on Sam, it is likely he would have lost out on both customers.
YOU BE THE JUDGE
Better Late Than Never
Rachel rented an elaborate gown for her granddaughter’s upcoming wedding. The terms of the rental included a one-time wearing of the gown for the price of fifteen hundred dollars. After wearing the gown on the night of the festive wedding occasion, the next morning Rachel experienced pain on one side of her body and shortness of breath. She wisely phoned an ambulance and was rushed to the hospital before losing consciousness. In the hospital she recovered quickly and was discharged only a week after being admitted. When she returned home, she remembered that it was her responsibility to return the gown to the store it was rented from within three days of usage. When she finally called the store and explained her predicament, the store owner patiently explained that since the gown was not returned as scheduled, he lost a paying customer that was scheduled to rent the gown. Rachel explained that she lived alone, and her family was unaware of the urgency of the prompt return of the gown. The store owner sympathized with her condition but reasoned that she rented the gown knowing the consequences of a late return. In Bet Din, he further claimed that he understands that Rachel fell ill, however, renting a gown is like renting a car, if for any reason you do not return it, you are required to pay.
Is Rachel required to reimburse the store owner with an additional fifteen hundred dollars in damages for the lost customer? How should the Bet Din rule and why?