Business Halacha: Renting a Summer Home


summer-home-bungalowQ: I am renting a summer home for July and August at $2,500 a month. The landlord is willing to accept $4,500 if the entire sum is prepaid. Can I accept this offer?

A: The Mishna (B.M. 65a) teaches that although prepayment discounts for merchandise are considered ribbis, as discussed previously, it is permissible to provide a discount for rental prepayments.

One explanation of this distinction is that in prepayment for merchandise, there is no monetary obligation before consummation of the sale. Therefore, any advance payment is considered a loan to the seller, and hence potential ribbis. However, in prepayment of rental, there exists a monetary commitment from the beginning of the rental, even if the actual payment is due only month by month. Therefore, the prepayment is not viewed as a loan to the landlord, but as payment of an existing obligation, so that it is permissible to provide a discount for the months ahead. (Y.D. 176:6; Bris Yehuda 26:1 ftnt. 1)

According to many authorities, it is permissible to provide this discount even before the renter moves in. For example, the landlord may demand that payment be made by June 1, a month before the rental period. However, there must be a binding commitment to the rental, either through a signed lease or kinyan sudar. (Taz 176:7; The Laws of Ribbis 11:14-22)

Authored by Rabbi Meir Orlian

These articles are for learning purposes only and cannot be used for final halachic decision. The Business Halacha email is a project of Business Halacha Institute ( and is under the auspices of Rav Chaim Kohn.

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  1. For those of us who do not have a yeshiva education, could someone please detail what exactly “ribbis” encompass? This deals with whether you can “give a loan”? Perhaps someone can comment on the details of when a Jewish person can give a loan and what it involves as far as Halacha is concerned.

  2. A Jew should loan another Jew money if needed. A Jew is not allowed to charge or receive interest, gifts or anything else of value for that loan. Some Rabbis ruled that the borrower may not even say thank you. There are special circumstances where a Jew may receive interest for the loan but that requires a competent Rabbi to work out the special agreement called heter iska. You may loan money to a non-Jew and charge interest.

  3. To answer #1 briefly:

    When you learn through Shulchan Aruch on Hilchos Ribbis you find that many common business transactions may be considered ribbis. This case is one such case. The reason is that ribbis is defined, essentially, as giving you some benefit in exchange for a loan. In certain instances, chazal forbade transactions that are not loans (similar to this case) that may have an outward appearance of providing benefit in exchange for a transaction.
    In this case, the rentor is getting an advanced payment, which could be viewed in a sense as a monetary loan, since at the moment of receiving the money there are no goods changing hands, only money. In exchange for this ‘loan of money’ he lowers the price of the rental for the rentee. The lowering of the rent is the ‘tovas hanah’ that the rentor gives in exchange for the money. This tovas hanah is like ribbis, just like saying hello or thank you after getting a loan is ribbis.

  4. For those of us who do not have a yeshiva education, could someone please explain how someone with only a yeshiva education can afford $4,500 for a summer home?

  5. “ribbis” means interest. A Jew may not charge another Jew interest on a loan. The Torah’s prohibition is where interest is stipulated in the making of the loan. The Rabbis forbade many other forms of kick-backs under the rubric of interest.