In clause 11.4, the tenant undertook to invest a minimum amount of ILS 8 million in the adaptation works to convert the leased property into a hotel.
In clause 12, the tenant undertook to use the leased property in an appropriate and reasonable manner, to maintain its integrity and good condition at all times. It also undertook to maintain the integrity of the leased envelope as it was received at the time of the delivery of possession.
As stated, the monthly rent for the area designated for the restaurant was set at ILS 60,000 plus VAT or 7% of the monthly turnover, whichever is higher; The rent for the area designated for the hotel was set at ILS 70,000 plus VAT until July 2021, after which it will increase to ILS 80,000 plus VAT (clause 5 of the 2018 agreement). A grace period of one year has been set from the date of signing the 2018 agreement, i.e., until July 2019, in which the rent will not be paid at all.
- The lease period as aforesaid was set at five years, and three option periods of five years each were determined.
- In clause 3.2, the plaintiff undertook to pay the tenant the sum of ILS 700,000 in two installments: first, ILS 350,000 on the date of signing the agreement and there is no dispute that it was paid; the second, the sum of ILS 350,000 within 7 days from the date an agreement signed between the tenant and a contractor to carry out the renovation and adaptation work in the area designated for the restaurant. and in clause 3.3 it is stated that the tenant undertakes to start executing the finishing works on the original leased property no later than 6 months from the date of signing this agreement, i.e., in January 2019.
- There is no dispute that the date of payment of the second payment of ILS 350,000 did not arrive, because the defendants never presented an agreement with a contractor to carry out the renovation work. And there is no dispute that the fit-out work did not begin in January 2019, nor until the date of the defendants' eviction from the property.
- From all of the above, it emerges that only as of August 2019 was the tenant required to pay the rent. In fact, the tenant has been in payments for less than a year, with no dispute that in certain months during the Corona period , only 50% was paid, as part of the "Corona Arrangement" between the parties, and from October to December 2020, nothing was paid on account of the rent or the completion of the rent set between the parties in the Corona Arrangement.
The correspondence between the parties
- In order to understand the events underlying the lawsuit, the relevant correspondence between the parties as presented in the appendices to the affidavits will be presented below.
- On September 3, 2020, the company's attorney sent an email to the defendant stating that following a conversation between the parties, "we are waiting for you to submit a planning status and the date of the start of the work and the expected completion. In light of your request for a two-month grace period and your proposal to deduct from the payment of Ahad Ha'am 20 according to the lease agreement, we would like to propose a layout plan that also relates to the date of commencement of work" (Appendix G to the defendant's affidavit).
- On September 14, 2020, Maharoni and the defendant sent the following email (hereinafter: email describing the situation):
"Hi Sarah (the company's attorney - A.R.) and Yaakov (the plaintiff's husband - A.R.),