Question:
B”H
Kavod haRav,
1. In the following scenario, I am seeking guidance if this is ok to do. A building is sold by a Jew to another Jew. The total sale price was 2 million. The first lump sum (given at the closing and not part of the yearly fixed installments) was 1 million. There are 5 installment payments (no interest) at $200,000 once per year. One $200,000 payment was made for 2020 thus far, so the total in the sellers possession to date from the deal is 1.2 million out of the total of 2 million. The buyer has possession of the building, and has full rights to the building and does receive rental income from the property. The seller does not receive rental income any longer from this property. Buyer also pays electric etc. for the property. Because the original owner still has some sort of connection to the building (the final amount has not been given yet), they are still required to pay taxes on the entity. My question is: there is no heter iska between the buyer and seller. There is no interest charged on the payments made each year, they are a fixed amount. Is there any issue with the seller paying their regular taxes that they are charged on the property (this is in the US) because there is no heter iska?
2. Regarding getting a Pruzbal document before the conclusion of 5782 for this arrangement- may a Pruzbal document be emailed to the buyer for him to sign and then emailed back to the seller to sign and that is considered an acceptable Pruzbal document? I ask with respect to a. if both sides do not do it at the same time/ meeting place and b. if both may sign without witnesses if they are both ok with it. Would signing a Pruzbal without witnesses and without the other party there when it is signed still keep the Pruzbal acceptable according to halacha? Thank you sincerely.
Answer:
Hi,
- The answer to your question really depends on who has the actual ownership of the building at this point. ( This is something that you should be able to see in the contract- when is the date the transfer of the ownership) If the ownership was already transferred then you owe the seller the money and the rent that was received by you is fine. However if the ownership has not yet gone over to the buyer, then the money $1 mil. that was given to the seller is essentially a loan, as the buyer has not yet been given the product. Therefore the rental money that the buyer is being awarded is considered like ribbis on the loan, (d’rabonon), and the rental payments would have to be given to the owner of the building. The question now is what can be done about it at this point. There are two points here, one is to make a heter iska from now on, (which has to be done slightly differently than usual, since there is a need to make a kinyan on the iska). the second more difficult point is if the is any way that the rental money of the last two years should not have to be given to the seller. It is a little complicated, therefore I would advise you to call the Bais Horaah Linyonei Ribbis in the U.S.A. at 1845-493-8604 and discuss this with them, to see what your options are.
- The Pruzbul document is not an agreement between the two sides, rather it is a form of submitting the loan to a bais din, and therefore the loan is not void at the end of shmitta. Therefore it does not have to be signed nor agreed to between the two sides. When we get a little closer to Rosh Hashana, the proper from will be available.
Best wishes
