Civil Case (Tel Aviv) 72240-05-24 Shalev Elhaik v. Prosper Ben Shitrit - part 4

To this, the plaintiffs' counsel replied:

"Okay."

1. In light of this correspondence between the parties dated June 3, 2021, there is no dispute that at least on the day of signing the form ordering the brokerage services, the plaintiffs became aware of the personal interest of defendant 3 and the plaintiffs' counsel confirmed this.  In addition, it can be learned from the language of defendant 3's statement that it is not impossible that the plaintiffs learned of defendant 3's personal interest as early as the first telephone conversation between the parties.
2. Section 10 of the Realtors Law does not prescribe an obligation that the disclosure of the personal interest be made in writing on the brokerage order form, but rather focuses on the substantive requirement that the client give his explicit written consent to continue the brokerage activity despite the existence of the personal interest, a condition that was fulfilled in the case before me.  Therefore, I reject the plaintiffs' arguments regarding the violation of section 10 of the Realtors Law by defendant 3.
3. Another question that must be addressed is whether defendant 3 was entitled to demand brokerage fees, taking into account section 25T(b)(3) of the Rent and Loan Law, which states that the tenant will not directly bear the payments that the landlord owes to a third party, including brokerage fees to the realtor if the realtor acted on behalf of the landlord.
4. The prohibition set forth in the law applies only when the landlord passes on his own debt to the tenant (payment "on the landlord's" place).  When the tenant signs an independent and separate brokerage agreement with the realtor, it is an independent obligation that does not fall within the scope of the prohibition in the law.
5. In this case, the plaintiffs knew even before they arrived at the apartment that the advertisement was published by defendant 3 as an intermediary.  The plaintiffs signed a form ordering the brokerage services independently and voluntarily, in which they undertook to pay defendant 3 the sum of ILS 10,000 for her services.  There is no dispute that this is an independent obligation and not an obligation that defendants 1 and 2 undertook towards defendant 3.
6. The plaintiffs' claims regarding the failure to disclose the realtor's personal interest in the execution of the transaction were examined and discussed above in the framework of the discussion on the question of the violation of section 10 of the Real Estate Brokers Law.  In this context, it should be noted that both the evidence that was brought shows that, at a minimum, the plaintiffs knew about the existence of defendant 3's personal interest on the day of signing the brokerage services order form, on June 3, 2021, i.e., about three days prior to the date of the actual signing of the rental agreement.
7. Therefore, insofar as the plaintiffs sought to withdraw from the engagement in view of these circumstances that came to their attention, they had the opportunity to do so, but they refrained from doing so, and completed the transaction knowing and agreeing, in writing and through their counsel, to the existence of defendant 3's personal interest.
8. In light of the above, the necessary result is that the collection of the brokerage fees on behalf of defendant 3 is in fact a lawful collection and the plaintiffs' claims in this context should be rejected.

• Deposit Amount

1. The plaintiffs provided the sum of ILS 30,000 in cash as a deposit to the landlords, and the defendants refused to return it, which should be assessed as the main ground for filing the proceeding.  I do not accept the defendants' argument that they hold the deposit lawfully and are entitled to repay it, since the total debts and damages caused to them by the plaintiffs exceed the amount of the deposit.
2. Given my determination that there was no basis for the notice of termination of the agreement on the part of the defendants and that they were the ones who breached the lease agreement, there was also no place to hold the entire amount of the deposit, and it was correct to return it.
3. After reviewing the arguments of both parties, I am satisfied that the sum of ILS 3,000 should be deducted for 9 days that were not paid in May, so that the sum of ILS 27,000 should have been refunded as early as June 2022.
4. Therefore, my conclusion is that the plaintiffs should be refunded the deposit in the amount of ILS 27,000 plus linkage and interest as required by law from June 2022 until the date of this judgment.

1. Payment for rental gaps

1. The defendants demanded payment in the amount of ILS 7,000 for the time difference between May 15, 2022, the date of the actual eviction of the leased property by the plaintiffs, and June 6, 2022, the contractual date of the end of the first year of the agreement.  The defendants claimed that the plaintiffs breached the agreement by vacating the apartment early and not paying rent for this period.
2. Given the determination that the eviction notice given by the landlords was unlawful, I do not find the plaintiffs liable for these three weeks, which constituted an eviction prior to the date stated in the lease agreement.
3. As is well known, and as the plaintiffs testified, there was a shortage of apartments for rent in the area where the apartment is located, and I accept their version that when they found an alternative apartment, they rented it immediately.  And insofar as there was a lack of overlap in the dates, I do not find the plaintiffs to be obligated in this regard.

1. The Proper Compensation

E.1.  The plaintiffs' claim for rent differentials (for the new apartment)

1. I do not accept the plaintiffs' claim of rent differentials for the new apartment they rented.  Since the plaintiffs rented a larger apartment (5 rooms rather than 4 rooms, as well as an area of 130 square meters as opposed to 90 square meters), it is natural that it will cost more.
2. Compensating the plaintiffs at the rate of the full rent paid for the new apartment they chose to rent will place the plaintiffs in a better position than they would have been if the contract had been in place, which constitutes unlawful enrichment at the expense of the defendants, and there is no room for this (and see in this context: Civil Case (Central District) 48179-09-19 Toy Store in Tax Appeal v.  D.N.  Dan Properties in Tax Appeal .( (17.01.2025)

E.2.  Compensating the Plaintiffs for the Breach of the Lease Agreement

55. The plaintiffs had the right to exercise two option periods of one year each, so that if they had exercised their right, they could have lived in the apartment for an additional 24 months of rent.

1. The compensation due to the plaintiffs for the payment of alternative rent is expressed in the difference between the amount they were required to pay under the contract, and the amount they were required to pay for the alternative property they rented, based on the assumption that the payment paid for renting the alternative property reflects the proper rent for a property similar to the leased property that is the subject of the claim (and see in this context: Civil Appeal Authority 4982/16 Hacohen Harel v.  Nissan Eli (March 7, 2017)).
2. After the breach of the agreement by defendants 1 and 2, the plaintiffs chose to rent an apartment that is not identical in nature and size to the apartment that is the subject of the statement of claim, and paid a monthly rent of approximately ILS 14,500 for it.  As stated, the improvement in the plaintiffs' housing conditions must be taken into account and a certain amount must be reduced in respect of this.

58. In addition, no appraiser's opinion was brought in this matter to prove a real increase in the rental price due to which the plaintiffs lost, and therefore I do not award compensation for a higher payment for the new apartment.
59. In the circumstances of the case before me, I find it appropriate to determine that the value of the rent of an alternative property that is similar in its characteristics to the apartment that is the subject of the statement of claim is ILS 11,500 per month, which is the amount determined in the agreement with the new tenants in respect of that apartment. In accordance with the lease agreement between the parties, the plaintiffs were entitled to exercise the option period and continue to live in the leased property in the monthly sum of ILS 10,500 per month in the first year and then ILS 11,025 in the second year.  Therefore, the damage caused to the plaintiffs due to the need for temporary housing during the period of the breach of the option is approximately ILS 17,700.

E.3.  General Compensation and Mental Anguish

1. I accept the plaintiffs' claim that they experienced great mental anguish in the eviction notice, which was given about eight months from the date they moved into the apartment, out of a desire to realize three years of rent.  The plaintiff was pregnant and chose a location close to her parents' home.  I also took into account that it is possible that if they had not been subject to the pressure of time and the circumstances of the case as they were, they would have chosen to rent a 4-room apartment, and not a 5-room apartment as it was actually rented.
2. I also accept the argument that moving during pregnancy, with all that it entails, constituted a nuisance that could have been avoided, especially since there was no legal reason to bring the agreement to its conclusion.  I award general compensation for mental anguish in the amount of ILS 20,000, which also includes the ancillary expenses involved in moving, including transportation, packing, brokerage furniture, etc.

 Conclusion

62. In view of the above, the claim should be accepted in part so that defendants 1 and 2 pay the plaintiffs the sums specified below:
63. For the return of the deposit: a sum of ILS 27,000 plus linkage and interest as required by law from June 2022 until this day.
64. Compensation for payment of alternative rent: ILS 17,700.

• Compensation for emotional distress and moving expenses: ILS 20,000.

63. With regard to the issue of expenses, further to what I have said above, I have found it appropriate to award expenses to the debt of defendants 1 and 2 in the total sum of ILS 15,000, and the defendants will bear the fee as paid.
64. The said amounts will be paid within 45 days.

Granted today, 2 Av 5786, July 16, 2026, in the absence of the parties.