What is the legal ruling on renting a piece of land, and the tenant building upon it, then the ownership of the building transfers to the landlord after the lease term ends, without compensation? And what is the legitimate alternative for such a transaction?
It is not permissible to lease land with the condition that the landowner takes ownership of the structure built by the lessee at the end of the contract. This is because it makes the value of the structure part of the rent, leading to an unknown rent () and invalidating the contract.
The -compliant alternative is to lease the land for building purposes for a specified period with a known rent. Then, upon the expiration of the term, the owner is given the choice to either: 1. Take ownership of the structure at its value. 2. Leave it for a rent equivalent to its fair market value (ujrat al-mithl). 3. Demolish it, while guaranteeing its value unless the lessee demolishes it.
This is in accordance with the Malikis, Shafi'is and Hanbalis schools of thought, and to avoid harming the lessee, based on the Prophet Muhammad's (peace be upon him) saying: "A tyrannical vein (i.e., a wrongfully established claim) has no right."
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
Read the full answer on Ftawyhttps://ftawy.com/en/questions/78908
Where this answer came from
- Source platform
- Ftawy
- Original fatwa ID
- 78908
- Added here
- . This is when the answer was added to El Fatwa, not the fatwa's date.
- Text
- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
- Read the full ruling
- Read the full answer on Ftawy