Tuesday, June 13, 2023

Fwd: Business Halacha Daily

---------- Forwarded message ---------
From: Bais HaVaad Halacha Center <info@baishavaad.org>
Date: Tue, Jun 13, 2023, 10:06 AM
Subject: Business Halacha Daily
To: <agentemes4@gmail.com>

If a Landlord Overcharges a Tenant, Is It a Problem of Onaah?

Question: Reuven is looking for an apartment to rent. He finds one he likes and the owner tells him it is $2,000 a month. After he signs the agreement, he speaks to his new neighbors and discovers that all of the identical apartments to his are paying only $1,200. Can he demand that the landlord renegotiate the rent because he overcharged him?

Conversely, what if a tenant says he'll pay $1,200 and the landlord agrees, but the landlord later discovers that the going rate is actually $2,000? Can he demand that the rent be renegotiated because he is being underpaid?

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Answered By Rav Baruch Meir Levine

Answer: The prohibition of onaah goes both ways. A landlord cannot overcharge a tenant and a tenant cannot underpay. In a normal case of significant onaah, either party can annul the deal; however, we know that there is a rule of "ain onaah l'karkah", onaah does not apply to land, which would seem to mean that one cannot negate a rental of property because of onaah.

There are, however, two caveats to this. Firstly, the Ramban and other Rishonim say that "ain onaah l'karkah" only applies b'dieved. This means that after the fact, a deal cannot be annulled due to overcharging or undercharging. It does, however, apply l'chatchilah, meaning that it is forbidden to overcharge or underpay going forward.

Secondly, a house is not necessarily classified as karkah. Technically, it consists of moveable objects that are attached to the ground. Regarding such an object, there is a machlokes Rishonim if it has the status of karkah or not.

Since this is a case of a safek d'ohraysa, it would seemingly be forbidden for the landlord or tenant to continue with this arrangement, provided that the overcharge or undercharge is more than one-sixth of the normal price and that the aggrieved party was unaware he was getting a bad deal at the time he agreed to it.

Question: What if a tenant signed a lease for $1,200, and then the market went up and the standard price rose to $2,000? Can the landlord claim that he is being underpaid?

Answer: If they are in the middle of a contract, there would not be an issue of onaah because the price was correct when they made the deal. A renewal option at the same price also would not be onaah if the price was set according to the market at the time. Once it converts to a month-to-month basis, the halacha is not so clear, but even in such an instance there is a strong case to be made that since this was the correct price when the tenant moved in, there is no issue of onaah.