Behar – Overpriced Real Estate

Behar – Overpriced Real Estate

The Halachot of Ona’ah – fraud state that when an item is priced a sixth or more above or below its market value the one who has been taken advantage of can insist on returning the item or the difference. This includes a buyer pricing-down an item that is truly of a higher value. You can view this as a protection against used car salesmen types. The Sifra connects these laws with the following Pesukim.

When you sell an offering to your nation or when you purchase an offering from the hands of your nation, do not act fraudulently when dealing with your brethren. According to the years after the Jubilee (50th) year purchase from your nation, according to the years of harvest he should sell to you. (Vayikra 25, 14-15)

From this Pasuk our Rabbis of Blessed Memory have stated that real estate is NOT covered by the rules of Ona’ah – fraud! (Mishna Baba Metziah – Chapter 4, 9) The Sifra even seems to contradict itself while explaining this Pasuk.

…From here I have only seen this rule applied to LAND, how do I know that that the Pasuk also applies to movables? The Pasuk states ‘offering’. How do we know that there are no rules concerning Ona’ah – fraud for LAND? The Pasuk states ‘when you purchase an offering from the hands of your nation.’ (Sifra Behar – Perasha 3)

Would you think that the opposite should be the obvious explanation? Do these Pesukim really teach us that it is permissible to take advantage of people when trading real estate?

Indeed, commentators starting from Rashi have said that the text means the exact opposite.

The Ramban – Nachmanades continues to discuss this issue. According to him our Pesukim teach us that it is forbidden to overprice any item whether it is land, a jewel or a Sefer Torah. The Mishna says that these items may be overpriced. He differentiates between fraud, which is certainly always forbidden and the Talmudic rule of Ona’ah. Ramban says that Ona’ah rules which regard invalid sales of items priced higher than a sixth of their value is a tradition. Our Rabbis of Blessed memory made an Asmachta to our Pesukim. An Asmachta is a rule which is either Rabbinical in nature or an ancient tradition that Our Rabbis connected to a Pasuk. The Pasuk really has nothing to do with the rule.

This explanation is fine because we can not argue when we know that Our Rabbis of Blessed Memory have a tradition.

However, the Seforno and the Bechor Shor come up with another interesting explanation. He says that when selling a plot of land the land is not actually sold. Only the years of usage are sold. If the buyer purchases 30 years of crops but pays for only 20 the deal would still be considered invalid from the law of Ona’ah. This explanation certainly fits well with the plain meaning of the Pasuk. Rashi also seems to be implying this.

Related to the real estate exception is one who purchases personal items from their owner. The Gemarah (Baba Metziah 51a) says that since personal items have sentimental value the buyer should know that the price might be a little inflated.

Real estate that is dealt with by the Torah is not real estate speculation. A plot of land in the state of Israel had its ownership transferred almost exclusively as an inheritance from a close relative. The sale of this land, which is its owner’s livelihood, was done only due to dire economic problems. Perhaps the reasoning behind the Gemarah in Baba Metziah 51a is similar. The land has sentimental value and the seller will accordingly raise the price.

As much as I dislike pushy, lying real estate brokers every property is really different from others which may seem to be the same. The Gemarah in Baba Metziah 104a and Baba Kama 7a quote the Tosefta, which says that if one person sold a “plot of vineyard” even though no vines grew there, the sale is valid. This is because it is the name that is important.

Poskim have stated that when we say the laws of Ona’ah do not apply this does not refer to totally overpriced items. Indeed, they say that one can charge up to and including a sixth but not more. The difference being for an item which” does have Ona’ah “a price inflated by exactly a sixth is invalid while for” Non-Ona’ah” items it would be valid. (See Shulchan Aruch 227)

The above is not meant in any way to be a guide for the laws of Ona’ah. It is higly suggested to read the source material.