I arranged to sell my house to a third party. Documents were signed and a deposit was placed in escrow.
My health [and the buyer’s too] deteriorated to the point where it didn’t make sense to complete the transaction.
We mutually agreed to dissolve the agreement and the deposit was returned.
I do not want the buyer to be liable for any expenses related to the sale because it is not his fault that I needed to back out but I don’t want it to be considered ribbis.
I have always signed a Heter Iska before the endeavor was undertaken. Now, we are applying the rules of ribbis in retrospect. May I pay for lost interest that he may have made had the money sat in a bank or pay for legal expenses or pay for the house inspection? Is there a Heter Iska that matches my situation?
The potential Ribbis would be for the money he gave as a deposit. If we considered this a loan being returned to him it would be forbidden to add funds to this amount. However in this case you never received funds, rather they were placed in escrow. As such you never received a “loan” and there would be no problem compensating him for his losses.
See Shu”t Minchas Yitzchak 5:19, Bris Yehuda, Ikrei Dinim 15:1.