1) PAYING IN ADVANCE IN RETURN FOR A DISCOUNT IN THE RENTAL FEE
QUESTION: The Mishnah states that a person may rent out his courtyard and offer the prospective tenant two methods of payment before he moves in: he may pay ten Sela for the year, or one Sela per month. The Mishnah says that the property owner may give the tenant this option only in the case of a rental, but not in the case of a sale. What is the difference between a rental and a sale in this case? The Gemara explains that in the case of a rental, the lower price (ten Sela for twelve months) is a discount for paying in advance; the market price for the courtyard is one Sela per month (twelve Sela for twelve months). No Ribis is being paid, since the proper time to pay the rental fee is only after the property has been used that month. In contrast, if the person were to purchase the field, he would have to pay all of the money right away, and if the seller lets him pay in payments, he surely is charging Ribis.
The NESIVOS SHALOM (p. 608) asks that although the Gemara addresses why no Ribis is being collected by the owner of the property, it does not address why no Ribis is being collected by the buyer. The Gemara later (73a) quotes Rav who says that one is not allowed to advance payment to a farmer for the crops of his orchard for that year. Such a payment is considered like a loan which the buyer gives to the farmer, who later pays back the loan with crops which are almost always worth more than the money advanced by the buyer. When someone rents property for ten Sela for the year, why is that not the same as purchasing the crops of an orchard in advance?
(a) The KOVETZ HE'OROS in Yevamos (502:3) and the KEHILOS YAKOV (Bava Metzia #37) give similar answers to this question. They explain that it is possible for a person to rent a property in two different ways. He can pay for his actual usage of living on the property, in which case he pays at the end of the year, or he can pay for the right to live on the property, in which case he pays at the moment he receives the right to live there. Accordingly, when the Gemara explains that one is allowed to pay ten Sela at the beginning of the year, it means that the landlord and the tenant agreed that the tenant is renting the right to live on the property. Since the rental fee in such an agreement is due at the beginning of the year, the tenant is paying on time, not in advance, in contrast to the case of the orchard in which the buyer pays in advance. If the tenant chooses to pay by the month, the agreement is that he is paying for the actual usage of the property, payment for which is due only at the end of the month.
The Nesivos Shalom has difficulty with this approach. According to this approach, it is possible to pay only at the beginning or end of a month. If one wants to pay in the middle of the year (a higher payment than he would pay if he were to pay at the beginning, but a lower payment than he would pay if he were to pay at the end), he would not be able to do so. If he is paying for the actual usage of the property, then he is paying a lower price for paying somewhat in advance. If he is paying for the right to live there, then he is paying more money than he really owes because he is not paying at the beginning of the year when he is supposed to pay. Not only do the Poskim not mention such a prohibition, but the SHULCHAN ARUCH HA'RAV (YD 176:14) specifically mentions that the parties involved may agree that payment be made in the middle of the year as well!
(b) The NESIVOS SHALOM answers that there is a fundamental difference between the two cases. When a person rents a courtyard and pays ten Sela in advance for twelve months, he is not merely loaning money to the landowner, as in the case of the orchard. He is already renting the courtyard, which means that he is actually paying his rent. Although the Gemara says that one must pay rent only at the end of the month, this means merely that he must pay rent at the end of the month; it does not mean that if one pays his landlord before the proper time, the payment is considered a loan. Since he now has the right to use the property, any money paid towards the rent is considered rent and not a loan. This is why the renter is allowed to pay ten Sela in advance.
The Nesivos Shalom proves this from the Gemara in Bava Basra (87a) which discusses paying workers in advance. The RASHBAM (DH Aval) explains that if one hires a worker for one hundred days and pays his wages in full at the beginning of his service, it is not called a loan but rather a payment of his wages, despite the fact that he does not have to pay him until later. (Y. MONTROSE)
2) THE FORBIDDEN SALE AND THE PERMITTED LOAN
QUESTION: The Mishnah here discusses two cases. In the first case, a landowner sells a field to a buyer who makes a down payment. The seller says, "Whenever you want, you may bring the money and take your field." The Mishnah states that this arrangement is forbidden. RASHI (DH Machar Lo) explains that the field retroactively becomes the buyer's when he pays the rest of the money. Accordingly, if the seller ate the fruit of the field in the interim time, the seller effectively has taken Ribis for letting the buyer delay payment. If, on the other hand, the buyer eats the fruit of the field during this time, there is a possibility that the buyer will be taking Ribis: in the event that the buyer defaults on the sale and does not deliver the rest of the money by the given time, the down payment that he gave will retroactively be considered a loan to the seller, and the buyer (lender) will have eaten the fruit of the field of the seller (borrower), effectively taking Ribis for his "loan" to the seller.
In the Mishnah's second case, a borrower gives his field as collateral to a lender, and they stipulate that if the borrower does not pay back the loan within three years, the field retroactively becomes payment for the loan. The fruit of the field is sold and the money held by a third party until the three years pass. If the borrower pays back the money on time, the profit from the fruit goes to the borrower and the field stays in his possession. If he does not pay back, the ownership of the field is considered to have been transferred to the lender three years ago, and the profit of the fruit goes to the lender.
The TOSFOS YOM TOV asks the following question. The Mishnah's point seems to be that when there is a possibility that the ownership of a field will be transferred retroactively when a certain time arrives, neither party may eat the fruit in the interim because of Ribis. Why does the Mishnah express this point in the case of a sale which is forbidden and in a case of a loan which is permitted? The point seems to be the same in both cases.
(a) The TOSFOS YOM TOV answers that the Mishnah teaches its point in the first case with regard to a sale because it wants to show that even though the Halachah is often lenient in cases of sales (as Rebbi Yehudah indeed is lenient in this case because he rules that "Tzad Echad b'Ribis" is permitted), in this case the Halachah is not lenient and such a transaction is forbidden. On the other hand, the Rabanan were generally stringent in cases of Ribis of loans. The Mishnah therefore teaches a second case to show that such a transaction is permitted even in the case of a loan.
(b) Alternatively, the Tosfos Yom Tov explains that the case of a permitted loan is necessary only because of the testimony which the Mishnah quotes afterwards. The Mishnah relates that Baitus used to manage his loans this way according to the Chachamim. To maintain consistency with the case of Baitus, the Mishnah teaches the second case, in which the law is lenient.
The CHIDUSHEI MAHARI'ACH has difficulty with the question of the Tosfos Yom Tov. The Mishnah teaches the first case involving a sale because it needs to teach the potential problem of Ribis involved in selling a field. A deal in which the fruit is given to a third party until the ownership of the field becomes clarified is not problematic at all. The Mishnah therefore needs to teach a case in which the deal is forbidden. The second case of the Mishnah is also necessary: since the borrower is offering his field as security for a loan which is due only three years from now, it is possible that this type of transaction should be forbidden because presumably the borrower offers a field of greater value as collateral in order to receive a loan for three years. This means that a default on the loan will provide the lender with a field worth more than the loan -- which is Ribis. The Mishnah teaches that the Halachah in the case of such a loan is lenient and such a deal is permitted. (Y. MONTROSE)