Civil Case (Tel Aviv) 72240-05-24 Shalev Elhaik v. Prosper Ben Shitrit

Judgment

A young couple rented a 4-room apartment in Tel Aviv from the owners of the apartment and their daughter, who served as a broker in the deal.  The parties signed a one-year lease agreement with an option to extend for two additional periods, but near the end of the first year, the landlords informed the tenants that they intended to sell the apartment and therefore could not exercise the right of option.  The tenants vacated the apartment and moved on to rent an alternative apartment at a higher rent.  In practice, it became clear to the tenants that the landlords had not taken any action to sell the apartment and rented it out for a higher sum shortly afterwards.  As a result, they filed a lawsuit against the landlords and their daughter, in which they demanded, inter alia, the return of a deposit deposited by the landlords that was not returned by them, as well as compensation for the breach of the lease agreement.

The main legal question before me is whether the defendants met the terms of the lease agreement that allows them to deprive the plaintiffs of the right of option, and hence whether their conduct constituted a breach of the agreement that entitles the plaintiffs to compensation.  At the same time, a decision is required on two accompanying issues: whether the plaintiffs are entitled to the full refund of the amount of the deposit deposited in the hands of the landlords, and whether the brokerage fees were lawfully collected from the plaintiffs by the landlords' daughter, in light of the plaintiffs' claim that she did not disclose in time the existence of a personal interest in the transaction as required by law.

 Introduction

1. I have before me a monetary claim in the amount of ILS 180,000 filed by the plaintiffs against the defendants, which concerns a dispute that arose between the parties regarding the lease agreement in relation to the leased property - a 4-room apartment at 9 Yeshe Hefetz Street, in Gush HaGadol, a civil case (hereinafter: "the leased").
2. The plaintiffs are Mr. Shalev Elhayek and Ms. Bar Shahal (hereinafter: the "Plaintiffs" or "the Tenants") a couple who rented the leased property from the Defendants in accordance with a lease agreement signed between the parties on June 6, 2021 (hereinafter: the "Lease Agreement" or the "Agreement").
3. Defendants 1-2 are the couple Prosper and Sarah Ben Shitrit, the owners of the leased property that is the subject of the lawsuit, and who rented the property to the plaintiffs from June 7, 2021 until the date of their eviction from the property on May 15, 2022 (hereinafter: the "defendants" or "the landlords").
4. Defendant 3 is Mrs. Ricky Aycourt, the daughter of the landlords (hereinafter: "defendant 3" or "the landlords' daughter").
5. On June 6, 2021, a lease agreement was signed between the parties, according to which the plaintiffs rented the leased property from the defendants for a period of one year, from June 7, 2021, until June 6, 2022.
6. The lease agreement included two additional option periods of one year each. The monthly rent was set at ILS 10,000 plus 5% in each rental year during the option period.
7. The disputes that are the subject of this proceeding are rooted in the defendants' demand of February 17, 2022, for the eviction of the plaintiffs from the property at the end of the first year of lease, in accordance with clause 9 of the lease agreement, which allows the landlords to deprive the tenants of their right to exercise the option periods if they wish to sell the leased property.
8. As a result of the defendants' demand that the plaintiffs vacate the leased property at the end of the first year of rent, the plaintiffs filed their claim demanding, inter alia, the return of a deposit of ILS 30,000 deposited with the landlords, the restitution of brokerage fees in the amount of ILS 10,000 collected by defendant 3, compensation for rent differences paid by them in an alternative apartment, and compensation for mental anguish and breach of the rental agreement between the parties. The defendants, for their part, reject the plaintiffs' claims outright, claiming that the plaintiffs were the ones who breached the agreement, and that their actions were lawful.
9. The Ottoman Settlement [Old Version] 1916 At the center of the disputes is the question of the defendants' breach of the agreement due to the denial of the option periods, the issue of holding the deposit by the landlords, as well as the issue of the collection of brokerage fees by defendant 3.

12-34-56-78 Chekhov v.  State of Israel, P.D.  51 (2)