Rambam - 1 Chapter a Day

Which is equivalent to four dinarim.

Thus, he will be receiving a dinar as interest.

Thus, he will be receiving a se’ah as interest.

The Lechem Mishneh explains that the word “any” indicates that it is forbidden to take interest even if the interest is not worth a p’rutah (the coin of least value employed in the Talmudic age). The Shulchan Aruch (Yoreh De’ah 161:1) states that taking interest worth less than a p’rutah is forbidden by Scriptural Law, but it may not be expropriated from the lender through legal process.

The intent is that all forms of interest - whether money for money, produce for produce, money for produce, or produce for money - are prohibited.

As stated in Chapter 4, Halachah 3.
The Shulchan Aruch (Yoreh De’ah 161:5) states that the lender may be compelled physically to return the interest.

At the time the loan is agreed upon, in contrast to the situation which is described in Halachah 3.

From the particulars mentioned in Halachah 2, it appears that even when one would not ordinarily pay rent for a property, and the owner of the property is not accustomed to renting out his property, if a stipulation is made at the time of a loan that the lender may dwell in this property, it is considered to be interest forbidden by Scriptural Law [Beit Yosef (Yoreh De’ah 166)].
The Ramban and the Rashba differ and note that a person is not obligated to pay rent when he squats in a courtyard that is not ordinarily rented out. (See Hilchot Gezelah 3:9.) Hence, they argue, dwelling in such a courtyard is not considered interest as forbidden by Scriptural Law. Their opinion is quoted by the Shulchan Aruch (Yoreh De’ah 166:2). The Siftei Cohen 166:6 questions why the Rambam’s opinion is not mentioned, since it is supported by other authorities.

If the lender or tenant did not make this stipulation at the time of the loan, even if such an arrangement was agreed upon afterwards, it is not considered interest as forbidden by Scriptural Law (Rashba, Vol. V, Responsum 165).

Note the contrast to the laws applying to a field or orchard, as mentioned in Halachah 7. The Rambam’s approach follows that of Rabbenu Yitzchak Alfasi. As will be explained, there are opinions that differ.

Although landed property is involved, since the lender receives a tangible benefit from his loan, that benefit is considered interest.

As explained in Hilchot Mechirah, Chapter 11, which describes an asmachta when a stipulation is not confirmed by a kinyan and/or it is apparent that one of the principals never made a hard and fast commitment to the transaction involved.

I.e., the money given by the purchaser will be returned because the transaction is not binding. Thus, if the purchaser were also given permission to benefit from the produce, he would receive both his money and an increment. This is considered as taking interest. See Halachah 4.

See Halachah 6, which explains why both of the principals may not benefit from the produce.

This subject, the forms of interest forbidden by Rabbinic decree, is the subject of the laws from Halachah 7 until the conclusion of Halachah 10.

The Tur and the Shulchan Aruch (Yoreh De’ah 161:2-3) rule that although the court does not expropriate interest forbidden by Rabbinic Law from the lender, the lender has a moral and spiritual obligation to return it. They also rule that if the borrower seizes possession of such interest after paying it to the lender, it is not expropriated from his possession.

As the Rambam states in Hilchot Gezelah 3:7, when a person takes a colleague’s slave who is sitting idly and has him work, he is not liable. In this instance, however, since he has given the colleague a loan, having the slave work for him as interest.

The Maggid Mishneh explains that this ruling applies whether he dwells in the courtyard with or without the knowledge and/or consent of the owner/borrower. By paying rent, he removes any question of there being interest involved.

The Maggid Mishneh states that if the courtyard is usually rented out, even if the lender dwells in it without the borrower’s knowledge, he is liable to pay rent to the borrower. Although it is merely “the shade of interest,” and therefore would not normally be expropriated by the lender, in this instance he could be required to pay the rent even if he had not given a loan at all. Hence, the fact that he did give a loan does not minimize his obligation.

As mentioned in the notes on Halachah 1, the Rambam’s wording appears to indicate that had such a stipulation been made at the outset, the prohibition would have been Scriptural in origin, despite the fact that the courtyard is not fit to be used for a dwelling. As mentioned above, other authorities differ.

The borrower is entitled to make such a reduction, because as mentioned in Chapter 4, Halachah 6, interest that is forbidden by Rabbinic law need not be paid to the lender.

The Rambam’s statements have aroused the attention of the commentaries. As related by the Tur (Yoreh De’ah 166), there is a difference of opinion between Rabbenu Yitzchak Alfasi and Rabbenu Ephraim concerning this issue. Rabbenu Yitzchak Alfasi maintains that even though the lender has a monetary obligation to the borrower for living in his property, the prerogative belongs to the lender. If he chooses to ignore that obligation and demands payment of the entire debt, the borrower is required to pay him. His rationale is that deducting the money would be considered as forcing the lender/squatter to return “the shade of interest.” Rabbenu Ephraim differs and states that if the borrower has not paid the debt, he may deduct the money due from the debt. His rationale is that since the borrower may not be required to pay “the shade of interest” and the borrower is owed this money, he has a right to withhold payment.
The Rambam’s position: a) appears to be a compromise between the two views, but does not satisfy the halachic demands of either of them; b) does not specify what amount should be deducted.
In his commentary on the Tur, the Beit Yosef quotes the Rashba (Vol. V, Responsum 158), who explains that it would appear that the Rambam accepts the foundation of Rabbenu Ephraim’s approach. Nevertheless, the Rambam does not free the owner/borrower of total responsibility for the debt. For if he did so on the advice of the court, it would be as if the lender were forced to return “the shade of interest.” But, the Rashba asks, why doesn’t the Rambam say that the borrower is freed of liability entirely except for the last p’rutah? In this way, it could not be said that the court forced him to pay “the shade of interest.” He concludes that perhaps since the entire amount is not deducted, we deduct only the amount that is common in that locale. (See the Ra’avad.)
The Shulchan Aruch (Yoreh De’ah 166:3) ignores the Rambam’s position and quotes the views of both Rabbenu Yitzchak Alfasi and Rabbenu Ephraim. The Ramah states that Rabbenu Ephraim’s view should be followed.

The Rambam appears to be inferring that since the proof-text speaks of “giving” a loan, as long as the neshech interest was not specified when the loan was given, the Scriptural prohibition is not violated (Maggid Mishneh). Significantly, the commentaries have not pointed out any prior Rabbinic source in which this concept is derived from the exegesis of this verse.
As the Ramah comments (Yoreh De’ah 166:2), this ruling does not apply only to dwelling on property, but rather to any type or form of interest. According to the Rambam, as long as interest was not agreed upon at the time the loan was given, even when the borrower volunteers it afterwards, it is considered only as “the shade of interest,” and is not prohibited by Scriptural Law.
The Ra’avad, the Ramban, the Rashba and others differ and maintain that offering benefit when the lender agrees to extend the term of the loan is also considered interest forbidden by Scriptural Law. The Shulchan Aruch (Yoreh De’ah 166:2) quotes both perspectives. The Siftei Cohen 166:8 states that most halachic authorities follow the Ra’avad’s position.

I.e., even though the borrower does not return the debt within the time period stated, the field is not transferred to the owner for the reason the Rambam states.

See Hilchot Mechirah, Chapter 11, which explains that an asmachta is an agreement that at least one of the principals did not take seriously at the outset. And since he did not take the transaction seriously, it is not binding. To illustrate using the example the Rambam employs: The borrower fully expects to repay the debt before the three years. Hence, he does not take the stipulation made by the lender seriously. Accordingly, it is not binding upon him.

Both the produce consumed within the three years and the produce consumed afterwards.

E. g., if the loan was for $5000 and the lender consumed $700 worth of produce, the borrower is required to return only $4300.

Since the field does not belong to the lender, he is not entitled to its produce. Taking it is considered to be interest, because, as stated in Halachah 1, produce can be considered interest for money. The Ra’avad and the Tur differ and maintain that the produce consumed within the three years is considered only as “the shade of interest.” The Shulchan Aruch (Yoreh De’ah 164:4) quotes the Rambam’s view, while the Ramah cites the other perspective. [Moreover, when quoting this law in (Choshen Mishpat 207:10), the Shulchan Aruch quotes both perspectives without favoring one over the other.]

The same laws would apply if the stipulation were stated by the lender and agreed to by the borrower (Lechem Mishneh).

I.e., the borrower/seller recognizes the possibility that he will not repay the loan and states that, in such an eventuality, the money will be considered as having been given to purchase the property. Moreover, the sale will be considered as having been made at the time the money was transferred.

For the field belongs to the borrower, and taking the produce would be interest, as explained above.

Since the payment was delayed, the transaction is binding and the field is considered as having been transferred to the lender/purchaser. If he desires, he can return it to the borrower/owner, but that would represent a new transaction. In the interim, the property belonged to the purchaser and he is entitled to benefit from its produce.

Because the seller never really intended to sell it. In the back of his mind, there is always the thought: “Soon, somehow, I will get the money to pay for my field.” Hence, the sale is considered an asmachta which is not binding.. Compare to Hilchot Mechirah 11:11.

The Ramah (Yoreh De’ah 174:1) states that even when the seller did not make such a stipulation himself, but this was the usual practice in that locale, the purchaser is forbidden to benefit from the produce. The rationale is that local business practice is binding, and the seller has the right to retake his property. Hence, the produce belongs to him.
The Siftei Cohen 174:1 states that the opinions mentioned in the notes on Halachah 7 that maintain that consuming the produce of a field given as security without deducting from the principal is only “the shade of interest” would maintain that the agreement mentioned in this halachah would fall into that category.

Note the comments of the Maggid Mishneh and the Kessef Mishneh on Hilchot Mechirah, loc. cit. They cite two opinions: one that states that the purchaser must make this statement after the sale is concluded, and one that allows it, even if the sale has not yet been concluded. The rationale is that once the seller has agreed to sell the field without any condition, the fact that the purchaser adds a condition that is to his benefit is of no consequence.
The Shulchan Aruch (Yoreh De’ah 174:1) rules that if the purchaser makes these statements in the midst of the negotiations, and the seller focuses on the matter and includes it as part of the terms of the transaction, the agreement is an asmachta and the purchaser is not entitled to the produce. If, however, the seller does not insist on the matter, the transaction is binding even though the purchaser mentioned this point before the transaction was concluded.

I.e., the transaction is binding. If the seller brings money, he will be repurchasing the field in a new transaction. Hence, the purchaser may consume the produce, for it belongs to him and he does not have any obligation to the seller. Instead, the agreement is his own voluntarily decision. (See Hilchot Mechirah, loc. cit.)

I.e., if the field was sold for 100 zuz and the purchaser paid 70, he acquires 70% of the field. The seller retains the remainder until he is paid the outstanding amount. In this situation, each one owns a portion of the field and is entitled to the produce of the portion that he owns.

Lest that benefit be considered interest, as the Rambam continues to explain.

I.e., it would be as if the remainder of the money were a loan, and the produce he consumed as interest given him because the loan was not yet paid.

I.e., it would be as if the money he paid were given as a loan, and the produce he consumed as interest given him in consideration of that loan.

I.e., until the transaction is completed or nullified.
The Shulchan Aruch (Yoreh De’ah 174:5) suggests an alternative: that the purchaser be allowed to benefit from the produce and if he defaults on the purchase, the seller will deduct the value of the produce that the purchaser consumed from the money that he is obligated to return to him.

I.e., the transaction will not be completed until the entire amount is paid. In this instance, the field remains the property of the seller and he is entitled to the produce.

For it is considered to be interest forbidden by Scriptural Law, which can be expropriated by legal process. The money the purchaser paid is considered to be a loan, and it is as if he were receiving benefit for having given that loan.

This also is considered to be interest forbidden by Scriptural Law, which can be expropriated by legal process. It is as if the purchaser were giving the seller benefit for extending him the credit to purchase the property.

I.e., Rav Yosef MiGash, in contrast to the perspective of his own teacher, Rabbenu Yitzchak Alfasi, which is mentioned in the following halachah.

I.e., in contrast to the present custom, in the Talmudic era - when an article was designated as security - it was physically transferred to the lender and he was given the opportunity to derive benefit from it.

See Chapter 7, Halachah 1 and notes.

Rav Moshe HaCohen (as quoted in the Shitah Mekubetzet) equates an orchard with a courtyard, for the orchard will certainly produce some benefit.

As the Rambam continues to explain, when a person gives a house or a courtyard as security, it is considered to be interest forbidden by Scriptural Law, and the value of the rent may be expropriated from the lender.

For despite a person’s effort and investment, there are times when a field does not yield a crop.

I.e., with regard to a house the benefit is readily available, for dwelling in the house is worth money. Since the lender receives immediate and tangible benefit, that benefit is considered to be interest forbidden by Scriptural Law. Since the lender may not receive such benefit from a field, using the produce is considered merely “the shade of interest.”

Which, as explained in Halachot 4-6, may involve interest forbidden by Scriptural Law.

The Rambam is saying that when a person sold a field under an asmachta, he did not transfer the ownership of the land to the purchaser. Hence, since the sale is nullified, the produce belongs to the seller, and by benefiting from it, the purchaser is taking benefit (consuming his produce) from the lender for the fact that he gave the seller money. That is considered interest.
When, by contrast, a borrower designates a field as security, he is transferring the right to the produce to the lender. Hence, if produce does in fact grow on the land, it belongs to the lender. He is not taking anything from the borrower. And giving the lender the right to benefit from the produce is not in and of itself considered to be interest forbidden by Scriptural Law, because - as the Rambam explains - it is possible that there will not be any benefit at all. Thus, at the time of the loan, ti1e borrower did not agree to pay the lender interest (Chiddushei Rav Chayyim HaLevi).

Bava Metzia 62a quotes Ravina as telling Rav Ashi that when property is given as security without a deduction being made, the interest cannot be expropriated by a Jewish court. Thus, he is stating that it is forbidden by Rabbinic Law.

For Bava Metzia 67a relates that Ravina expropriated produce as interest when a field was sold under an asmachta. Similarly, Bava Metzia 64b implies that letting a person live in a home is interest forbidden by Scriptural Law. According to the Rambam’s teachers, these statements can be reconciled with the statement of Ravina quoted previously, only by making the distinction the Rambam suggests. Note, however, the commentaries of the Ra’avad and the Ramban, who offer different interpretations of these passages, which support the view stated in the name of Rabbenu Yitzchak Alfasi.

Since he can continually benefit from the property, he will certainly receive an increment for his money. Hence, such an arrangement is considered to be fixed interest.

Ordinarily, rent for such a courtyard would be much more. Nevertheless, a deduction is being made and paying only the lesser amount is not considered to be fixed interest, because (in contrast to the situation described in Halachah 1) the lender did not say that he is demanding such a low rental in consideration for having given the loan.

Since it is unsure that there will be a profit, and the lender has paid for the use of the property, leniency is granted.
The Tur and the Ramah (Yoreh De’ah 172:1) quote opinions that do not make the same distinction the Rambam does, and maintain that whenever a deduction is made - whether for a house or for a field - the property can be given as security and the lender may derive benefit from it.

As mentioned above, this is the opinion of Rabbenu Yitzchak Alfasi, the Ramban and others.

The apparent contradiction in the words of Ravina cited in the notes on the previous halachah.

This arrangement is referred to by the Talmud as “security [as prescribed] in Sura.” For it was in that city, the site of one of the great Talmudic academies in Babylon, where this formula was developed. All authorities agree that such an arrangement is permitted.

The Ra’avad differs with the Rambam with this point, maintaining that just as giving property as security and making a deduction is forbidden; so, too, making this stipulation is forbidden. According to his perspective, the only arrangement permitted is the “security [as prescribed] in Sura” mentioned above. The Maggid Mishneh defends the Rambam’s position as explained below and his opinion is cited by the Shulchan Aruch (Yoreh De’ah 172:1).

The use of this term has attracted the attention of the commentaries, for seemingly, the borrower is the owner of the field and this clause is simply a repetition of the previous one. Indeed, there are some who suggest that a printer’s error crept into the text, and the proper version is “If the lender stipulated....” Nevertheless, most - though not all - of the authoritative manuscripts and early printings of the Mishneh Torah substantiate the version reflected in our translation.
The Kessef Mishneh differentiates between the two clauses as follows: The previous clause is speaking about the rental of a field, while this clause speaks about the rental of a courtyard or house. In such an instance, since there is little likelihood of loss involved, there are opinions (Rashi, Bava Metzia 64b) that maintain that this resembles interest. Hence, it is necessary to state explicitly that it is permitted (Turei Zahav 172:2).
The Lechem Mishneh offers a different explanation, stating that the previous clause represents an instance where at the outset, the rental agreement was made for each year individually. The present clause, by contrast, speaks of an instance where the agreement was originally made for a ten-year period. Hence, it is necessary to state that the arrangement can be shortened.

I.e., rather than consider this as a loan involving interest, we consider it a rental agreement with a stipulation that the owner can redeem the property. The difference between this arrangement and the designation of other properties as security is that in other instances, the arrangement is fundamentally a loan and is indeed referred to as such. At any time, the lender has the right to return the property and demand payment from other properties belonging to the borrower. In this instance, by contrast, the lender has no choice but to retain the property for the entire time stipulated. Even if the property was flooded and he suffers a loss, he cannot demand payment from other properties belonging to the owner. Instead, he must bear the responsibility for the loss himself (Maggid Mishneh).

Hilchot Sec hi rut 7:1.