Rent / Lease in Islam
Rules Regarding Lease/Rent
The person who gives something on lease, as well as the person who takes it on lease, should be adult and sane, and should be acting on their free will. It is also necessary that they should have the right of discretion over the property. Hence, a feeble-minded person who does not have the right of disposal or discretion over his property, his leasing out anything or taking anything on lease is not valid. The same applies to a bankrupt person, in the wealth over which he has no right of discretion. Of course, such a person can give himself for hire.
A person can become the agent of another person and give his property on lease, or take some property on lease, on his behalf.
If the guardian of a minor gives his property on lease, or makes him the lessee of another person, there is no harm in it. And if some period after the child’s Bulugh is also included in the period of lease, the child can cancel that included part of the lease after his becoming baligh, even if the inclusion of that period after the child’s Bulugh was in his interest. But if the inclusion was based on some religious grounds, and excluding it would be against Shariah, and if the leasing was done with the permission of the Mujtahid, then the child cannot cancel the lease after becoming baligh.
A minor child who has no guardian, cannot be hired without the permission of a Mujtahid. And if a person does not have access to a Mujtahid, he can hire the child after obtaining permission from a M’omin who is ‘Adil.
It is not necessary for the lessor and the lessee to recite the formula in Arabic. In fact, if the owner says to a person: “I have leased out my property to you”, and the other replies: “I accept it”, the lease contract is in order. Also, if they do not utter any words, and the owner hands over his property to the lessee with the object of leasing it out, and lessee also takes it with the intention of taking it on lease, the lease contract by such conduct is in order.
If a person wants to be hired for doing some work without reciting the formula, the hire contract will be in order, as soon as he starts doing that work.
If a dumb person makes it known with signs that he has taken or given a property on lease, the lease contract is in order.
If a person takes a house, shop or room on lease, and the owner of the property imposed the condition that only he (the lessee) can utilize it, the lessee cannot sublet it to any other person for his use, except that the new lease is such that its advantage devolves on the lessee himself, like, if a woman takes a house or a room on lease, and later marries, and gives the room or house on lease for her own residence to her husband. And if the owner of the property does not impose any such condition, the lessee can lease it out to another person, but, as a precaution, he should seek the permission of the owner before giving it on lease. And if he wishes to lease it out for a higher amount in cash or kind, he can do so, if he has carried out some work on it, like, white washing or renovation, or if he has suffered some expenses in looking after the property.
If a person who is hired on wages, lays down a condition that he will work for the hirer only, he (the hirer) cannot lease out his service to another person, except in the manner mentioned in the foregoing rule. And if the hired person does not lay down any such condition, the hirer can lease out his services to another, but he cannot charge more than the agreed wage for the hired person. Similarly, if he himself accepts employment and then hires someone to do the task, he cannot pay him less than what he will receive himself, unless he joins that hired person in completing some of his work.
If a person takes or hires something other than a house, a shop, a room a ship, and a hired person, say, he hires a land on lease, and its owner does not lay down the condition that only he himself can utilize it, and if the lessee leases it out to another person on a higher rent, it will be a matter of Ishkal.
If a person takes for example, a house or a shop on lease for one year, on a rent of one hundred rupees, and uses half portion of it himself, he can lease out the remaining half for one hundred rupees. However, if he wishes to lease out the half portion on a rent higher than that on which he has taken the house, or shop on lease, like, if he wishes to lease it out for hundred and twenty rupees, he can do it only if he has carried out repairs etc. in it.
Conditions Regarding the Property Given on Lease
The property which is given on lease should fulfill certain conditions:
(i) It should be specific. Hence, if a person says to another: “I have given you one of my houses on lease”, it is not in order.
(ii) The person taking the property on lease should see it, or the lessor should give its particulars in a manner which gives full information about it.
(iii) It should be possible to deliver it. Hence, leasing out a horse which has run away, and the hirer can not possess it, will be void. However, if the hirer can manage to get it, the lease will be valid.
(iv) Utilization of the property should not be by way of its destruction or consumption. Hence, it is not correct to give bread, fruits and other edibles on lease for the purpose of eating.
(v) It should be possible to utilize the property for the purpose for which it is given on lease. Hence, it is not correct to give a piece of land on lease for farming, when it does not get sufficient rain water, and is also not irrigated by canal water.
(vi) The thing which a person gives on lease should be his own property, and if he gives the property of another person on lease, it will be correct only if its owner agrees to it.
It is permissible to give a tree on lease for utilizing its fruit, although fruit may not have appeared on it yet. The same rule applies if an animal is given on lease for its milk.
A woman can be hired for her milk, and it is not necessary for her to obtain her husband’s permission. However, if her husband’s right suffers owing to her giving milk (to the child of another person), she cannot take up the job without his permission.
Conditions for the Utilization of the Property Given on Lease
The utilization of the property given on lease carries four conditions:
(i) That it should be halal. Hence, leasing out a shop for the sale or storage of Alcoholic drinks, or providing transportation by leasing for it, is void.
(ii) That doing the act or giving that service free of charge should not be obligatory in the eyes of Shariah. Therefore, as a precaution, it is not permissible to receive wages for teaching the rules of halal and haraam, or for the last ritual services to the dead, like washing it, shrouding etc. And as a precaution, money should not be paid in lieu of any services which is deemed futile .
(iii) If the thing which is being leased out can be put to several uses, then the use permissible to the lessee should be specified. For example, if an animal, which can be used for riding or for carrying a load is given on hire, it should be specified at the time of concluding the lease contract, whether the lessee may use it for riding or for carrying a load, or may use it for all other purposes.
(iv) The nature and extent of utilization should be specified. In the case of hiring a house or a shop, it can be done by fixing the period, and in the case of labor, like that of a tailor, it can be specified that he will sew and stitch a particular dress in a particular fashion.
If the time of commencement of a lease is not fixed, it will be reckoned to have commenced after the recitation of the formula of lease.
If, for example, a house is leased out for one year, and it is stipulated that the period of lease will commence one month after the recitation of the formula, the lease contract is in order, even if the house had been leased out to another person at the time of reciting the formula.
If the period of lease is not specified, and the lessor says to the lessee: “At any time you stay in the house you will have to pay rent at the rate of $10 per month”, the lease contract is not in order.
If the owner of a house says to the lessee: “I have leased out this house to you for £10 per month” or says: “I hereby lease out this house to you for one month on a rent of $10, and as long as you stay in it thereafter the rent will be $10 per month”, if the time of the commencement of the period of lease was specified or it was known the lease for the first month will be proper.
If travelers and pilgrims stay in a house not knowing how long they will stay there, and if they settle with the landlord that they will, for example, pay $1 per night as rent, and the landlord also agrees to it, there is no harm in using that house. However, as the period of lease has not been specified, the lease will not be proper except for the first night, and after the first night the landlord can eject them as and when he so wishes.
Miscellaneous Rules Relating to Lease/Rent
The property which the lessor gives on lease should be identified. Hence if it is one of the things whose transaction is made by weight (e.g. wheat), its weight should be specified. And if it is one of those things whose transaction is made by counting (e.g. currency coins), the amount should be specified. And if it is like a horse or a sheep, the lessor should have a sight of it, or the lesser should inform him of its particulars.
If land is given on lease for farming, and the produce of that very land which does not presently exist, is treated as its rent, the lease contract will not be valid. And the same applies if he assumes a general responsibility to pay the rent on the condition that it will be paid from the harvest. But if the source from which rent will be paid exists, there is no objection.
If a person has leased out something, he cannot claim its rent until he has delivered it. And if a person is hired to perform an act, he cannot claim wages until he has performed that act, except in the cases where advance payment of wages is an accepted norm, like Niyabat for Hajj.
If a lessor delivers the leased property, the lessee should pay the rent, even if he may not take the delivery, or may take its delivery but may not utilize it till the end of the period of lease.
If a person agrees to perform a task on a particular day against wages, and appears on that day to perform the task, the person who has hired him should pay him the wages, even if he may not assign that task to him. For example, if a tailor is hired to sew a dress on a particular day, and he appears to do the work, the hirer should pay him the wages even if he may not provide him with the cloth to sew, irrespective of whether the tailor remains without work on that day or alternatively does his own or somebody else’s work.
If it transpires after the expiry of the period of lease, that the lease contract was void, the lessee should give the usual rent of that thing to the owner of the property. For example, if a person takes a house on lease for one year on a rent of $100, and learns later that the lease contract was void, and if the normal current rent of the house is $50, he should pay $50. And if its normal current rent is $200, and the person who leased it out was its owner, or his agent, and was aware of the current rate of rental, it is not necessary for the lessee to give him more than $100. But if a person other than these gave it on lease, the lessee should pay $200. And the same order applies, if it is known during the period of lease, that the lease contract is void in relation to the outstanding rent for the past period.
If a thing taken by a person on lease is lost, and if he has not been negligent in looking after it nor extravagant in its use, he is not responsible for the loss. Also, if, for example, a cloth given to a tailor is damaged or destroyed, when the tailor has not been extravagant, and has also not shown negligence in taking care of it, he need not make any replacement.
If an artisan loses the thing taken by him, he is responsible for it.
If a butcher cuts off the head of an animal, and makes it haraam, he must pay its price to its owner, regardless of whether he charged for slaughtering the animal or did it gratis.
If a person takes an animal on hire, and specifies as to how much he will load on it, and if he puts a heavier load on it, and as a result, the animal dies or becomes defective, he is responsible for it. And even if the quantity of the load is not specified, and he puts an unusually heavier load on it with the result that the animal dies or becomes defective, the person concerned is responsible. And in both the cases, he must pay extra rent than is usual.
If a person gives an animal on hire so that fragile goods may be loaded on it, and the animal slips or trots and breaks the things, the owner of the animal is not responsible for it. However, if the owner beats the animal severely, or does something like it, as a result of which the animal falls down on the ground, and breaks the goods he (the owner of the animal) is responsible.
If a person circumcises a child, and as a consequence of it the child dies, or is injured, the person who circumcises is responsible if he has been careless or made a mistake, like having cut the flesh more than usual. However, if he was not careless, or did not make any mistake, and the child dies due to circumcision, or sustains an injury, he will not be responsible, provided that, he had not been consulted earlier about the possible injury, nor was he aware that the child would be injured.
If a doctor gives medicines to a patient with his own hands, or prescribes a medicine for him, and if the patient sustains harm or dies because of taking that medicine, the doctor is responsible, even if he had not been careless in treating the patient.
If a doctor tells a patient: “If you sustain harm I am not responsible” and then exercises due precaution and care in the treatment, but the patient sustains harm or dies, the doctor is not responsible.
The lessee and the lessor can cancel the lease contract with mutual consent. Also if a condition was laid down in the lease contract that one or both of them would have the option to cancel the contract, they can cancel the contract as agreed.
If the lessor or the lessee realizes that he has been cheated, if he did not notice at the time of making the lease contract that he was being cheated, he can cancel the lease contract. However, if a condition is laid down in the contract of lease, that even if the parties are cheated, they will not be entitled to cancel the contract, they cannot cancel it.
If a person gives something on lease, and before he delivers it to the other party, it is usurped, the lessee can cancel the lease contract and take back whatever he has given to the lessor, or he may not cancel the lease contract, and take from the usurper rent at the usual rate, for the period the thing remained in his possession. Therefore, if a person takes an animal on lease for one month for $10, and someone usurps if for ten days, and the usual rent for ten days is $15, the lessee can take $15 from the usurper.
If a lessee hires something and someone prevents him from taking its delivery, or usurps it from him, after he has taken the possession, or prevents him from using it, he cannot cancel the lease. He is entitled only to take rent of that thing from the usurper at the usual rate.
If the lessor sells the property to the lessee before the expiry of the period of lease, the lease contract does not get cancelled, and the lessee should give the rent of the property to the lessor. The same rule will apply if the lessor sells the leased property to someone else.
If before the commencement of the period of lease, the leased property gets so impaired that it cannot be utilized in the manner agreed upon, the lease contract becomes void, and the money paid by the lessee will revert back to him. And if it is possible to utilize the property partly, the lessee can cancel the lease contract.
If a person takes something on lease, and during the period of lease it becomes so impaired that it is not fit for the required use, the remaining lease contract will be void, and the lessee can cancel the lease for the past period also. And for that period, he may pay usual rent.
If a person leases out a house which has, for example, two rooms, and one of those rooms is ruined and he gets it repaired, but it does not match the standard of the previous room, the rule mentioned in 2221, will apply in this case also. But if it is repaired by the hirer at once, and its use does not get interrupted, then the lease does not become void, and the lessee cannot cancel the lease. However, if the repair takes too long, and its use is interrupted, then the lease will be invalid for that much period, and in this case, the lessee can cancel the whole lease, and in exchange of whatever use he may have made, he should pay a usual rent.
If the lessor or the lessee dies, the lease contract does not become void. But if the house is not the property of the lessor – for example, another person made a will that as long as he (the lessor) is alive, the income derived from the house will be his property, and if he gives that house on lease, and dies before the expiry of the lease period, the lease contract becomes void from the time of his death. It can become valid again if the owner of the house endorses the contract, and the rent for the remaining period of lease, after the death of the lessor, will accrue to the present owner.
If an employer appoints a contractor to recruit laborers for him, and if the contractor pays the laborers less than what he receives for them from the employer, the excess he keeps is haraam for him, and he should return it to the employer. And if the contractor is given a full contract by the employer, to complete a building, and is authorized to either construct it himself or give a sub-contract to another party, if he joins with the other party in doing some work, and then entrusting him to do the remaining work against lower payment than what he has collected from the employer, the surplus with him will be halal for him.
If a person who dyes the clothes, agrees to dye a cloth with indigo, he has no right to claim any charges if he dyes it with something else.
Source: adopted from www.islamic-laws.com