What is the ruling on purchasing a building through a lease-to-own system, or a sale, with the condition that it returns to the seller after achieving double its value, and is this considered usury (riba)?
The fundamental principle is that sale applies to tangible assets, while lease applies to usufructs. However, terminology and formulations can overlap and contradict the intended meaning. Therefore, in contracts, what matters are the intentions and meanings, not the words and structures. Contracts are concluded by whatever indicates their purpose, whether through words or actions. The two examples mentioned in the question have the same ruling: they constitute a voidable contract, because neither the conditions for a valid sale nor those for a valid lease have been met. As for the first example, it is voidable because a lease must have a known term, whereas the contract mentioned links it to an unknown term, which is impermissible. As for the second example, it is either a lease expressed as a sale, which is voidable because a lease is not valid when expressed as a sale, or it is a sale as it appears, which is also voidable because it contradicts the meaning and implication of a sale. Therefore, dealing in the manner inquired about is impermissible, and its contract is voidable. A voidable contract must be rescinded.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
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