Is there a ribis issue with the contract paragraph below?
At the time of execution of this Agreement, Buyer shall deposit with the
Title Company (as defined herein) (“Escrow Holder”) the amount of $406,250 (including any
interest thereon, the “Deposit”). The parties hereto direct Escrow Holder to place the Deposit in
escrow in an interest-bearing account in a federally insured bank (or such other investment
instrument(s) as the parties hereto may mutually select) pursuant to the Escrow Joinder attached
hereto and made a part hereof as Exhibit B. At Closing, the Deposit shall be paid to Seller and
credited against the Purchase Price.
This clause of the contract does not pose a ribbis issue. My understanding of the clause is that the interest, (with the assumption that it is with a non-Jewish bank) is credited to the buyer and given to the seller. Thus being the case, the money is still the buyer’s, and there was no ribbis given. Even if the interest would be credited to the seller, it would not be ribbis, because this is the money that was given as part of the price of what is being purchased, and it is considered as if it is the seller’s already.
Nevertheless it is still a good idea to write a heter iska, becuase there might be other parts of the contract that can have ribbis.