The Case – First Right of Refusal

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Avi, a former resident of a yishuv close to Gaza, was evacuated from his home on the seventh of October. Together with his wife and six children, he was transferred to a small hotel in Jerusalem. After living in the hotel for nearly two months, he was bored, frustrated, and his family dynamics were failing. Avi found a job in Jerusalem and decided to leave the Gaza area permanently because of the continuous missile attacks over the years. He rented an apartment in a popular neighborhood in Jerusalem, but after only one month of rental he was informed that his landlord was in contract to sell the property. Avi confronted his landlord and offered to buy the apartment, claiming that as the present tenant he is entitled to the right of first refusal to purchase the property. The landlord was uninterested in dealing with Avi after he already signed with another buyer and dismissed Avi’s claim. In Bet Din, the two presented their respective claims.  

Is Avi entitled to purchase the apartment? Does his landlord have the halachic right to sell his apartment to an outside party? How should the Bet Din rule and why? 

 

Torah Law 

According to the ruling of the Shulhan Aruch, a next-door neighbor is entitled to the right of first refusal (ROFR) when a property is up for sale. However, multiple rules and regulations govern these laws. Thus, prior to determining that a next-door neighbor is within his right to force a purchase, a competent halachic authority is to be consulted. 

A considerable debate exists between early halachic authorities regarding whether a tenant residing at a property is entitled to the right of first refusal to purchase a property next door. Leading Ashkenazic halachic authorities view a tenant as an owner for the duration of his termed contract, thereby affording him the right to match an outside bid for the purchase of an adjacent property. 

However, leading Sephardic halachic authorities, namely the Rambam, and the author of Shulhan Aruch, differ. In their view, since a tenant does not own the property and is only temporarily residing at the property, he does not possess the benefits of the right of first refusal. 

Additionally, according to this latter view, even in the instance in which a tenant is seeking to purchase the property he is renting, he can be denied the right of purchase by the seller. Hence, even if the tenant is willing to match or increase the bid of an outside buyer, the property owner and the outside buyer are not required to consider his offer.  

The underlying reason for the benefit of the right of first refusal extended to a neighbor, is to enable a homeowner to maximize his property’s location. This benefit was instituted by our sages to help people consider others needs by acting justly and offering the property next door to the neighbor first.  

Although at times it is just to consider a tenant, especially in the present state of war in Israel, nevertheless, when all parties involved are of Sephardic origin a Bet Din will not intervene on a tenant’s behalf. This ruling is especially accurate after a seller already signed with another buyer.  

 

VERDICT:   Shopping the Market 

Our Bet Din ruled in favor of the landlord and permitted him to proceed with the sale of his apartment to an outside party. Since Avi is only a tenant temporarily residing on the property, he is not entitled to the benefit known as the right of first refusal. By rule of the Shulhan Aruch only a homeowner can exercise such a right. Avi, the tenant, the landlord, and the outside buyer were of Sephardic origin and are required to follow the halachic opinion of the Rambam and Shulhan Aruch. Although the view of Ashkenazic halachic authorities differs, in light of the origin of the participants we ruled accordingly.  

Notwithstanding, our Bet Din requested of the landlord to consider Avi’s traumatic experience due to the present war, but the landlord replied that it was too complicated for him to retract and begin the process all over. Our Bet Din resorted to blessing Avi that he should find the perfect property to satisfy his family’s needs. 

In Loving Memory of Vera Bat Carol, A”H 

YOU BE THE JUDGE 

 

A Snowball Effect 

Due to severe snow conditions, Alan chose to park his car in front of his home, instead of in his snow-filled driveway.  The following morning, he found his left taillight smashed and a note on his front window. Sari, his next-door neighbor, when pulling her car out of her driveway, skidded on ice, and crashed into Alan’s car. Alan assessed the cost of damage by his mechanic, and Sari agreed to pay the $500 cost of repairs. The car repair was scheduled for the following morning. That evening, Alan chose to park his car on the opposite side of the street, to distance his car from Sari’s driveway. However, his efforts were to no avail, as Jacklyn hit Alan’s right taillight as she exited her driveway. Once again, Alan found a note on his front window, and naturally Jacklyn was willing to cover the cost of repairs. As scheduled, Alan brought his car to the garage the following morning, now repairing two identical smashed taillights. The garage mechanic quoted him a total price of $800, which included repairing two taillights, body work, and parts. The mechanic explained that although each side of the car is estimated at $500, since both sides are being done together, the collective price is $800. The three neighbors came before Bet Din, to determine how they should split the payment between them.  

Is Sari to pay $500 for the left tail and Jacklyn $300 for the right, each bearing liability according to the sequence of events? Or perhaps, since the total of damage is $800, each is to pay $400. Or is Alan entitled to collect from both Sari and Jacklyn $500 each and pocket a $200 balance? Since each neighbor caused $500 worth of damage, perhaps the discounted price is to be credited to Alan.  

How should the Bet Din rule and why?