I rent a store in the Old City of Yerushalaim. It is in a very good location since normally we are swamped with tourists. Because it is a very good location I pay high rent but it is generally worthwhile because I have so much business. However, since Israel now does not allow tourists in, I have no business and I don’t even open my store. I have two questions. Am I entitled to break my contract and just stop paying rent since it does not look like many tourists will be coming until the crisis is totally behind us? My second question concerns the past. For the past two months I have been closed. If I can break my contract for the future, can I also force the store owner to return the money I paid him in rent during the past two months?
It is important to give a bit of background. The Gemara (Bava Metsiyo 105B) discusses a situation of a person who rented a field where his payment was a fixed amount but which was to be paid exclusively from the crop he harvested and due to unforeseen circumstances the crop was severely damaged. The Gemara rules that if the other farmers in the vicinity suffered the same problem, the situation is classified as a Makas Medino and the renter is not blamed for the loss. Thus, he is entitled to a reduction in his rent.
Your question is very similar to a situation which is discussed at length by the Maharam of Padua (res 39) and many others afterwards. The situation he discussed concerned a person who rented a concession in Venice for seven years which allowed him to lend money with interest to non-Jews. They only gave a limited number of such concessions. In the middle of the rental period, the governor enacted restrictions on those who lent money with interest. For the next nine months, the owners attempted to influence the governor to rescind his decree. After those nine months the owners gave up hope and then asked whether they can sue for a reduction in the rent for those nine months since their profits were severely curtailed. They based their claim on the previously cited Gemara.
The Maharam ruled that they could not ask for a reduction. His argument was that the Gemara applied exclusively to situations like one who rented a field, where the renter invested money and work to produce a crop and if the renter would cancel the rental he would forfeit his own prior investment. However, the moneylenders should have asked to end their rental when the decree was first issued since they would not have suffered any loss by doing so. Therefore, he ruled that they are not entitled to any reduction for the past since they did not return the store to the owner. It is important to note that he allows the renter to cancel for the future but as far as the past is concerned he does not require even a reduction.
The ruling of the Maharam is controversial. The Rama (siman 321) disagrees and argues on two facets of the Maharam’s ruling. First, he rules that a renter can only cancel his contract if the owner of the rental is at fault. However, in the case of a makas medino, since we do not attribute the loss of income to the owner, we do not allow the renter to cancel the rental agreement. The proper ruling is that we reduce the price of the rental appropriately. Since the renter could not have voided the rental agreement anyway, he disagrees with the Maharam and maintains that the renter can ask for a reduction in price even if he didn’t do so right away. There are many who side with Maharam (Sema, Chassam Sofer and seemingly the Shach) and there also many (Taz to a certain extent, Nesivos, Oruch Hashulchan) who side with the Rama.
It should be noted that when we say that the renter is entitled to a reduction there is a dispute as to how large a reduction he deserves. Most poskim understand that the reduction is fully commensurate with the loss of income. In the case of the Gemara the renter would compute the size of his loss and put it all on the owner. For example, if due to the makas medino the field produced half the usual amount, the renter would only pay half of the amount he originally agreed to pay. Others, however (Ra’avan response 98, Nesivos) maintain that since in a makas medino situation we cannot ascribe the loss to either party, the two sides share in the loss.
There is a further dispute concerning stores, in case of a makas medino. The Maharshach (2, 198) was asked about one who rented a store and the ruler ordered all those who were engaged in this trade to relocate to a different location. The question was whether the renter can say that this is a makas medino and cancel the rental or perhaps, since the property could be used for a different activity, the renter should use it for a different activity.
The Maharshach ruled that it is a makas medino since a person can claim that this is his occupation and he is not required to engage in a different profession. However, there are others (e.g. Ra’anach 1, 38) who maintain that it is not a makas medino since the store is usable for something else.
This dispute is not relevant in your situation since there probably aren’t any activities that you could use the store for and make a profit in the Old City at the present. Furthermore, nowadays there are major expenses involved in renovating a store and often one also requires a license which may take a long time to obtain. Therefore, the owner would not be justified in claiming that you could use the store for something profitable.
Based on the above, if you did not pay for the future, according to the Maharam you can cancel your rental agreement and you would have to do so in order to free yourself of the obligation to pay rent. You should take into account the fact that the owner will be free to rent the property to someone else in the future. Furthermore, the owner can require you to remove all your goods from the premises.
According to the Rama, even if you do not vacate the property you can later claim that the location could not generate income for anyone and therefore you do not owe any rent. However, the owner can ask you now to pay rent or vacate. If you do pay rent, you may not be able to recoup your payment as we mentioned before, since there are opinions that you must pay half. Perhaps, the best tactic is to discuss it with the owner and come to some type of agreement.
As far as the past is concerned, you cannot force the owner to refund any money since according to the Maharam you are not entitled to a refund. However, since the Ramo disagrees, if you do compromise with the owner you can compromise on the as well.