For the week ending 20 November 2010 / 12 Kislev 5771

An Honest Broker

by Rabbi Mendel Weinbach zt'l
Become a Supporter Library Library

Question: A real estate broker is an agent for selling a house which he knows has some defects of which the potential buyer is unaware. Does he have a responsibility to inform the buyer even though this may ruin his prospects for making this transaction?

Answer: In the Talmud (Mesechta Bava Metzia 50b) a distinction is made in regard to the remuneration responsibility of a seller or buyer who overpaid or underpaid depending on the discrepancy between the normal price and the amount paid. If this difference is more than a sixth the transaction is null and void. If it is an exact sixth the deal is valid but the difference must be returned to the injured party. If the difference is less than a sixth we assume that the injured party forgives such a slight discrepancy and there is no need for compensation.

Based on this rule it would seem that the broker would not be required to reveal the defect if it lowered the value of the house by less than a sixth. There are two considerations, however, which compel us to conclude that he must make the disclosure.

First of all there is the question raised in Shulchan Aruch Choshen Mishpat 227:6 as to whether it is permissible to deceive someone in regard to a sum less than a sixth of the value of the object sold even though he cannot compel him to make remuneration. In addition there is the ruling of the halachic authority "Kiryat Sefer" (Chapter 15 of Laws of Sale) that the concept of a buyer forgiving a discrepancy of less than a sixth applies only to a situation in which the seller deceived the buyer in regard to the price. Should he deceive him, however, in regard to weight, size or any other deficiency there are no grounds for assuming that the buyer waives his right for redress.

Since the broker is an accomplice to such deception it is incumbent upon him to reveal the house's defect if knowledge of such a defect would have discouraged the buyer from purchasing the property at the stipulated price.

(Adapted from the Response of Rabbi Yitzchak Zilberstein, Rabbi of the Ramat Elchanan community in Bnei Brak.)

© 1995-2024 Ohr Somayach International - All rights reserved.

Articles may be distributed to another person intact without prior permission. We also encourage you to include this material in other publications, such as synagogue or school newsletters. Hardcopy or electronic. However, we ask that you contact us beforehand for permission in advance at and credit for the source as Ohr Somayach Institutions

« Back to Ethics

Ohr Somayach International is a 501c3 not-for-profit corporation (letter on file) EIN 13-3503155 and your donation is tax deductable.