Is it ethical for landlords to charge all the market will bear?
Q. Is it ethical for landlords to charge all the market will bear? When they do, many people are priced out of their homes.
A. The tension between landlord and tenant is hardly new. The Torah speaks about charging a fair price for land that will return in the Jubilee year, which is like a rent. (Leviticus 25:14-17.) And the Talmud gives detailed rules about fair relationships between landlord and tenant. Let us examine the ethical basis of these rules.
The mishna, an ancient concise summary of Jewish law which is elaborated in the Talmud, states that a tenant cannot be evicted without reasonable notice. “One who rents out a house in the winter can’t evict him before the Pesach holiday; in the summer, not before giving 30 days notice. And in the city, whether summer or winter twelve months.”
This rule creates a fair balance between the interests of landlord and tenant. The landlord is the owner of the property; he does have the right to evict the tenant in order to use the property himself or rent it to someone else. But this right needs to be exercised in an equitable way, a way that will not leave the tenant out on the street without a reasonable opportunity to find new lodgings in the same area.
How much time does this require? Our sages recognized that there is no one-size-fits-all answer. Different locales have different realities, which is why the mishna gives different answers for different times and places.
The Talmud adds, “Rav Huna stated, but if he wants to raise the rent, he may.” This raises the objection that the poor tenant is over a barrel; the passage in the Talmud then clarifies that “this holds when the price of housing rises.”
In other words, it is improper to raise the rent beyond what is accepted in order to take advantage of the tenant, who is a captive customer. But it is permissible to raise rents in measured response to a rise in housing prices. The fairest course of action is to give the tenant some notice before the rent increase, even if there is no contract.
This answer is in harmony with the passage from Leviticus, which forbids charging a price that is out of line with the price of land, but does not establish any independent standard for rental rates.
Of course if the exact term and rate of the rental is fixed by contract, then both sides are bound by these terms. The rules of the mishna and Talmud are meant to give fair principles for people who don’t want to hammer out terms specific to their situation. And even when there is a contract, we know that it is very common for the tenant to overstay the original contract period without a new agreement, and then too we need to refer to the Talmud’s timeless principles of fairness.
Despite this basic leniency, if the tenant is needy and you can afford to keep the rent down, you should think twice before raising the rent to what the market will bear. Remember that the highest form of charity is to help someone through normal market transactions, rather than giving them a handout. The best way of giving help is to patronize others’ business, to give them a business loan, or to do business with them on favorable terms. In this case the landlord has a unique opportunity to fulfill this highest level of helping others.
SOURCES: Babylonian Talmud Bava Metzia 101b; Tur and Shulchan Arukh codes Choshen Mishpat 312; Yoreh Deah 249.