What is the ruling on lease-to-own agreements for real estate, which is a lease contract that ends with ownership of the property after paying monthly installments, with a penalty clause (late fee) for delayed installments, knowing that the contract is made with a third party who buys the property immediately and sells it on credit, and that this property will be used as a mosque?

The well-known form of Ijara Muntahia Bittamleek (Lease-to-Own) is impermissible due to its inclusion of gharar (excessive uncertainty), such as the lessee's inability to pay an installment, leading to the loss of what they have already paid.

The Islamic Fiqh Academy has proposed two Shariah-compliant alternatives: 1. Installment sale with sufficient guarantees. 2. A lease contract that grants the lessee the option to extend the lease, terminate it, or purchase the leased asset at market price after the installments conclude.

Imposing a penalty for late payment of installments is forbidden, as it constitutes Riba (usury). It is permissible for a company to purchase the property and then lease it or sell it on installments to a third party, provided the contract is free from impermissible conditions.