Rabbi Daniel Dombroff
Answer: Let us analyze this case from a halachic perspective of whether the agreements effected between the various parties are binding. Shimon gave Reuven a deposit to secure the rental, which many poskim hold is considered to be a valid halachic kinyan. This thereby gives Shimon ownership of the house. However, Levi never effected any kinyan (such as giving money) to consummate his agreement with Shimon to sublet the house. Thus, this agreement between Shimon and Levi remains a verbal one only.
If Reuven then wants to retract on his agreement with Shimon, who currently owns the house, Reuven is essentially asking Shimon for a favor to retract his acquisition of the house. In theory, Shimon is certainly allowed to agree to Reuven's request, but is Shimon permitted to retract on his verbal agreement to Levi?
Normally, one is not supposed to retract on a verbal agreement with another for no reason. However, in this case, the situation is different than when it began, as Shimon expected a more prompt payment from Levi of the deposit money.
This scenario where a change occurred during the course of the transaction is known in halachah as a case of trei tarei. In such circumstances, the Rema (C.M. 204) cites some opinions that one is not obligated to uphold his word. Although the issue is subject to dispute (and even the Rema himself prefers the more stringent opinion), some poskim do rule that this opinion is accepted as the practical halachah.
It would therefore seem that there are poskim to rely upon in this case to allow Shimon to retract his agreement with Levi and simply ask Reuven to refund his deposit, if he wishes to do so. Levi will thus be compelled to search for an alternate summer home.
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