Interest in profit-sharing from an investment in an apartment on condition it yields a fixed payment
Question
Shalom.
The groom owns an apartment worth about two million shekels, but it is in a condition not fit for living. His father-in-law wants to invest another approximately one million in it on the understanding that the rental income will be his until the amount of one million shekels is reached, and afterward they will share the profits until the father-in-law reaches the age of 120. If there is no rental income, the groom will not be obligated to pay his father-in-law anything. Is there any prohibition of interest (ribit) in this arrangement?
Answer
Shalom u’vracha.
Yes, it is permitted.
Source
Since the groom does not accept responsibility for his father-in-law’s investment, there is a partnership between them (what is called in the terminology of Chazal “close to profit and to loss” — Bava Metzia, daf ע), and nevertheless, for any large transaction of this sort it is recommended to sign a heter iska document, since problems of interest (ribit) often arise due to lack of attention.
