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What is the ruling of Islamic law on taking money in exchange for relinquishing a shop rented from the state?

1 min readAlso available in العربية

The Council of the Islamic Fiqh Academy holds that "badal al-khuluw" (premium for vacating) is divided into four categories:

1. Between the landlord and the tenant at the commencement of the contract: It is permissible to pay a lump sum amount as part of the agreed-upon rent. 2. Between the landlord and the tenant during or after the expiration of the contract period: During the period: It is permissible for the landlord to pay the tenant an amount in exchange for the tenant relinquishing his right to the usufruct for the remainder of the period. After the expiration of the period: It is not permissible to pay "badal al-khuluw" because the tenant's right has expired. 3. Between the tenant and the new tenant during or after the expiration of the contract period: During the period: It is permissible to assign the remainder of the period in exchange for an amount exceeding the periodic rent, while adhering to the lease contract and prevailing laws. It is not permissible for the tenant to sublease the property or take "badal al-khuluw" in long-term leases except with the landlord's consent. After the expiration of the period: It is not permissible to pay "badal al-khuluw" because the original tenant's right has expired. 4. Between the new tenant and both the landlord and the original tenant before or after the expiration of the period: The Council did not elaborate on the ruling for this category.

Summarized from the full answer at Ftawy · reviewed Sep 2, 2026

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