Is this transaction considered legitimate, where a person buys a commercial shop and pays its price over a period of two years, during which both parties are considered partners on paper, and the seller leases the shop to the buyer for 20,000 dinars per month, and after two years the shop becomes the property of the buyer?
The form of Ijara [leasing] ending in ownership is impermissible due to its inclusion of -prohibited elements:
1. Contracting over a single asset with two unstable contracts, namely sale and lease, each of which has conflicting rulings. 2. The installment designated as "rent" often does not correspond to the market rent; rather, it is a portion of the price. If the buyer defaults on payment, the asset is repossessed, and they may have paid more than its value, which constitutes devouring people's wealth unjustly. 3. These contracts have led to the bankruptcy of many due to leniency in debt.
Installment sale, with sufficient guarantees, suffices as an alternative to this invalid contract.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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- Ftawy
- Original fatwa ID
- 37605
- 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