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 Shabbat Parashat Tzav| 5767P'ninat MishpatA Cooperative Society’s Charging Policy - Based on Halacha Psuka 5 - Condensation of a P’sak Din of the Beit Din of Gush Etzion
Case: Israeli settlements are built as a joint project between the government and a cooperative society (agudah shitufit)that is formed to coordinate the development of the area and the sale and development of individual plots. The plaintiff bought a plot of land and agreed to pay a certain fee for development. They now are suing the agudah shitufit to lower the fee, which is much higher than that which earlier buyers paid. As all residents are members of the agudah shitufit, the plaintiff does not think he should pay more than other members.He demands to see the records of the income and expenses of the agudah shitufit to determine what his proportional fee should be. The agudah shitufit’s board says that it is possibly damaging to make their records public and, since the plaintiff agreed to pay the amount in question, he is obligated to do so in any case.
Ruling: The agudah shitufit is not a private partnership that has a right to sell property to whoever pays the highest fee. Their mandate is to administer the sales and development in a manner that covers expenses. The fact that the plaintiff agreed to pay a certain amount does not empower the agudah shitufit to charge more than the service it provides is worth. Therefore, the plaintiff has the right to question it.
Often in such arrangements, the government’s Department of Housing pays for the land development and charges the landowners itself. In this case, they were involved until a certain point but then pulled out and left the responsibility to handle these government-owned lands entirely in the agudah shitufit’s hands. At a certain point in the process, certain agencies were interested to get the project going and ensure its viability. They offered those who committed themselves to the project at an early stage to pay less than market value for the development. The agudah shitufit is not responsible to provide all of its members explanations of how they obtained beneficial rates at different points in the process as long as there are not tangible suspicions of wrongdoing.
The equal opportunity that the agudah shitufit must provide buyers is only in regard to prices at a given time for those in equivalent situations. In fact, the government, on whose authority the agudah shitufit operates, also offers different rates to buyers according to certain factors that exist at a given time. These include supply and demand, expenses, and interest in encouraging growth of the community at the time.
As long as the fee the plaintiff is paying is in line with the value of the work, it is legitimate. Being a member in the agudah shitufit does not mean that one should receive direct financial benefit from funds that become available to the agudah shitufit.
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