As Salaam Aleikum wa Rahmatullahi wa Barakatuh. (May Allah's Peace, Mercy and Blessings be upon all of you)

One of our brothers/sisters has asked this question:

Is it permissible for a Muslim to lease / to rent / to mortgage, in other words to sell and/or to purchase a house in the following manner?

•          One who doesn’t own a house to live in, shall lease/purchase a house for an agreed tenancy period i.e. 3 to 5 years, against a fixed lump sum rental /sale consideration amount to be paid upfront by him in his capacity as lessee/purchaser to the land lord/lessor/seller of the house, with an understanding that no monthly rentals shall be paid during the whole tenancy period.

•          Furthermore, the lessor/land lord shall benefit from the rental amount/ sale consideration, as he likes, while the lessee/purchaser of the house shall make use of the house for personal family dwelling, as he doesn’t own a house to live in; and also, is unable to pay the monthly rentals.

•          Upon expiry of the lease / sale contract, the entire lump sum amount with no interest or any additional amount shall be refunded by the landlord/lessor to the lessee.

You are kindly requested to elaborate on the issue from both the lessee’s and the landlord’s points of views.

(There may be some grammatical and spelling errors in the above statement. The forum does not change anything from questions, comments and statements received from our readers for circulation in confidentiality.)

Answer:

Renting house for rental amount refunded when tenancy expires

In the name of Allah, We praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is none worthy of worship but Allah Alone, and we bear witness that Muhammad (saws) is His slave-servant and the seal of His Messengers.

Pronouncement:

Quest for Islamic guidance on any issue is highly commendable. It’s a requirement of one’s Imaan that he always ensures Islamic ruling about any act, well in advance to his action. May Allah strengthen our Iman and help us to strictly adhere to Islamic Shariah in its true sprit.

Dear Brother,

The issue in question is not a new one in Islamic Shariah and history. It has been discussed in great detail and addressed as well. Jurist called it “Bai`a al-Wafa” means “Sale of Trust” or a deal based on good faith.

Definition of  Bai`a al-Wafa: 

According to section 118 of Majallah al-Ahkam al-'Adliyyah (Civil code of the Othman Empire), it is defined: “as a sale with a condition that when the seller pays back the price of the goods sold/properties, the buyer returns the goods/properties to the seller.

•        In the 5th century A.H Cr to 12th century A.D, people of Bukhara, (capital of Uzbekistan nowadays), had suffered from the huge debt and were forced to sell their houses and properties. They wanted to bailout themselves by  mortgaging or putting lien on their properties in favor of their creditors, in other words selling out these properties, with an understanding that whenever the debtors, the properties’ owners are able to settle their debts they would do so and get back their properties.

•        Unfortunately, nowadays, it’s also practiced by many Muslims in many parts of the world. It is knows in India as “GHAR KA KIRAYA  NAAI, PASE KA BEYAAJ NAAI” means “Leasing the house for no rentals and availing the cash for no interest”.

•        Majority of the Jurists, Islamic Shariah Scholars in all ages are of opinion that this kind of contract is impermissible.

•        International Islamic Fiqh Academy Makkah, K.S.A, (Shariah council worldly reputed, recognized and represented by the Shariah scholars form all over the world), in its resolution No 66 (7/4) ruled out as follows:

•        In fact this sale contract involves the Fiqh maxim, “Lending that generates any benefit is considered as Riba, the interest, and it is a deceptive dealing to avail the interest”; it is impermissible according to the majority opinion of the Shariah Scholars.

Conclusion:

One should fear Allah and try to avoid unlawful even dubious things in all respects. The minimum of Halal, lawful is far better than maximum of Haram, unlawful.

On the authority of Abu Abdullah Al-No`amaan bin Basheer, (may Allah be please with him) who said: I heard the Messenger of Allah (Pease be upon him) say:

"Truly what is Halal, the lawful is evident, and what is Haram, unlawful is also evident, and in between the two (Halal and Haram) are matters which are doubtful; and which are not known by many people. Thus, he who avoids doubtful matters clears himself in regard to his religion and his honor, but he who indulges in doubtful matters, in facts, indulges in unlawful matters, like the shepherd who pastures his flock around a sanctuary, all but grazing therein. Beware, every king has a sanctuary, and the tings Allah has declared unlawful are His Sanctuary. Beware, in the human body there is a morsel of flesh; if it is sound, the whole body is sound, and if it is diseased and corrupt, the whole body is diseased and corrupt, and behold, it is the heart." (Bukhari, Book 1 V 2, Hadith No 49, and Muslim Book 10 Hadith No 3882)

Wa Allah A`alam bil Ssawab.

Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is only ones. Allah Alone Knows Best and He is the Only Source of Strength.

Your brothers and well wishers in Islam,

Members of Islamhelpline