Is it permissible to take money from the insurance company to repair a house that was purchased through a lease-to-own system, given that the bank is the one paying the insurance company?

Firstly, an Ijara-Wal-Iqtina (lease ending in ownership) contract has permissible forms and prohibited forms. The criterion for prohibition is the simultaneous occurrence of two different contracts for the same asset at the same time. The criterion for permissibility, however, includes the existence of two separate contracts, that the lease is genuine and not merely a disguise for a sale, that the guarantee for the leased asset rests with the owner, that the insurance is cooperative Islamic insurance borne by the lessor, that the rulings of both leasing and selling are applied each at its respective time, and that non-operational maintenance expenses are borne by the lessor.

Secondly, if the contract is prohibited, it must be annulled or rectified. If it is permissible, then liability for damage to the property rests with the owner (the bank), unless the damage resulted from the lessee's transgression. If the bank permits the lessee to repair it and undertakes to bear the cost, the lessee has the right to claim the actual cost of the repair from the bank.

Thirdly, if the money was disbursed to the lessee in his capacity as an agent for repairing the house, he must spend it according to the house's best interest and return any remaining amount to the bank. It is not permissible for him to benefit from it as if it were his own property. However, if the bank gave the money to the lessee as ownership in compensation for the damage without requesting repair, this indicates that the transaction is in reality a sale and not a genuine lease, which makes it prohibited from the outset.