The Case
To Sell or Not To Sell
Upon the passing of their father, Harry and Steven inherited a valuable piece of real estate. Harry, a father of seven children, told his single brother, Steven, that he wished to sell the property as he was in desperate need of funds. Steven responded that it would clearly be a mistake to sell at this time, and suggested that they maintain their partnership and share in the rental proceeds equally. In Bet Din, Harry submitted a written offer from a third party for the purchase of the property and commented that it would be a shame to reject such an aggressive offer. Steven refused, and instead offered to advance to Harry 100 percent of the rental proceeds as a loan. Steven made it clear that he was in no rush to get paid back his share of the rent, and in the meantime, Harry could use the extra cash flow to provide for his family. Steven’s only stipulation was that he be the one to decidewhen to sell the property, and that upon the property’s sale he be paid back the rent he advanced to Harry. Harry rejected his brother’s offer, explaining that he was presently indebted to others and was not interested in additional loans.
Can Harry force Steven to sell? Can Steven force Harry to be his partner? Is Steven’s offer to extend Harry his share of the rent as a loan an enforceable option? How should the Bet Din rule and why?
Torah Law
According to the ruling of the Shulhan Aruch, an heir of an estate is entitled to sell his share of a property to an outside party. Hence, if two brothers inherit a property, one brother cannot prevent the other from selling his half to a third party.
However, this rule of the Shulhan Aruchdoes not allow one heir to force another to sell a commercial property in its entirety. Likewise, an heir cannot require his fellow heir to buy his share when seeking to terminate the partnership. As long as the possibility of selling his share alone to the outside market exists, no further rights are extended to him. In the instance in which private property is inherited and it is impossible for one heir to sell his own individual share to an outside buyer, a competent halachic authority is to be consulted.
Nevertheless, as with all partnerships, the right of first refusal is granted to one’s fellow partner before a joint property can be sold to a third party on the outside market. Hence, before an heir can finalize the sale to an outside third party of his portion of the estate, his fellow heir and partner is entitled to buy his share if he is willing to match the terms and purchase price offered by the third party. The laws governing the right of first refusal are extensive, and only a competent halachic authority can determine when and if they are applicable.
Although it is a positive commandment from the Torah to extend a loan to a fellow Jew in need, nevertheless, it is obvious that one cannot compel another to accept a loan. Furthermore, the laws of interest are violated if a lender stipulates, when extending a loan, that any benefit or gift of any sort is to be provided by the borrower over and above return of the money that was loaned to him. This restriction prohibits a lender from stipulating to more favorable terms in a partnership agreement on account of a loan he is extending to his partner.
VERDICT:The Right of First Refusal
Our Bet Din rejected the claims of both Harry and Steven. Even though Harry received a written offer from a third party to purchase the entire property, he is still not entitled to require Steven to sell his share of the estate to the third party. On the other hand, although Steven offered Harry a loan, Harry is not required to borrow money to maintain their partnership in the property.
Furthermore, Steven’s imposition of a condition on the loan offer to Harry, his partner, would violate the Torah’s prohibition on interest. The stipulated right to determine when and if the property is to be sold would constitute a prohibited benefit received by Harry from Steven because of the loan he is extending to Steven, and is therefore forbidden. Our Bet Din explained to Harry that since the property inherited was commercial, he can readily find a buyer for his share. But the mere ability to find an outside buyer for the whole property is insufficient to require his brother Steven to sell to that buyer or to buy out Harry’s share. Four months later, Harry found a potential buyer for his share of the estate. At that point he had the right to sell to that buyer. However, his brother Steven did offerto match the purchase price and terms of the buyer. Once Steven expressed his intent to exercise his right of first refusal, Harry was required to sell his share to Steven on the terms the outside third party had offered. Upon selling to Steven, Harry thus terminated his partnership with his brother.
YOU BE THE JUDGE
The Most Valuable Possession on Earth
Charles, may he rest in peace, was a leading community member who back in the 1970s dedicated a Sefer Torah to his local synagogue. Upon his passing, his two sons built a new synagogue in memory of their beloved father and they requested of their local synagogue to return to them their father’s Sefer Torah. They explained that their father never intended to give the Sefer Torah to the shul as a gift. As heirs of their father’s estate they wish to reclaim the deposited Sefer Torah and transfer it to the new synagogue dedicated in honor of their father. The shul’s committee objected to returning the Sefer Torah insisting that it was the shul’s property. They reasoned that Charles, a”h, donated it over forty years ago and although he was a regular congregant, he never mentioned his intent to one day remove it from the shul. Furthermore, Charles passed on nearly two years ago and this is the first time his sons are requesting the Sefer Torah. The sons counterclaimed that the simple reason why they or their father never mentioned their ownership rights, is because it was obvious to them all along that the Sefer Torah was their private property.
Do the sons have the right to transfer the Sefer Torah to another shul? Who is the rightful owner of the Sefer Torah? How should the Bet Din rule and why?