Is Rent to buy allowed?

Question

Recently I've been searching for a house online, of course I do not want to get involved in Riba Astagfir-Allah, so I started subscribing to all these "sale in execution" property auction websites, so I can see whether I could get some good deals.

Anyways, I came across this one car they said you can buy it on "rent to buy".

So I looked up "rent to buy" and according to this explanation on Forbes.com you pay a deposit / down payment on the property (car / home/etc) and the rent you pay each month includes rent plus a downpayment on the innitial price of the house, and the price does not fluctuate with the interest rate.

Is it Halal to be involved in such a transaction? Please give a reason for your answer, Shukran.

Answer 1

The contract is originally a rent contract with one term. The term is after paying all duties(your monthly payment and other things) the landlord will sell it to you by Hiba. This is accepted by all Ulama.

Here is the English article about this

And If you can read Arabic you go to this book الاجارة المنتهیة بالتملیک و صکوک الاعیان الموجرة/ دکتر منذر قحف ص7

You can find this book Here

Answer 2

Assalamu alaykom,
All buy, sell, and rent contract has its own conditions and constraints. sometimes one condition will make the contract haram, for example here in my country Jordan many banks provide rent to buy contracts, the scholars said it's halal for some contracts that was giving by some banks, and it's haram for the other contracts unless they change some of their contract's conditions.

In conclusion, the concept of rent to buy contracts is halal, but it depend on the contract terms and conditions. So you have to give trusted scholar your contract to give you a fatwa about that exact contract, if it's halal or haram.

Answer 3

Answer Praise be to Allaah. What we understand from the question is that the bank sells its share of the house to you, and the price is divided into monthly instalments. But at the same time the bank retains its ownership of the house until the instalments are paid off, and during that period it rents its share of the house to you.

Based on that, you pay a monthly sum, part of which is towards the price of the house and the other part is rent for the house.

This is one of the kinds of “rent-to-own” schemes, and it is a haraam kind, because it includes a number of things that are contrary to sharee‘ah, namely:

1-It goes against the implication of the sale contract, because the sale contract implies that the item sold is transferred to the purchaser, but in this case the house remains under the ownership of the bank and is not transferred to the purchaser.

One of the statements of the Islamic Fiqh Council is that “the seller has no right to retain ownership of the sold item after the sale.”

Qaraaraat wa Tawsiyyaat Majma‘ al-Fiqh al-Islami, p. 110

2-It includes two transactions, namely sale and rental, concerning one item at the same time, but these are two different transactions. Sale implies that the item and its benefits are transferred to the ownership of the purchaser, who becomes liable for it and entitled to its benefits. Rental implies that the item remains the property of its owner and the renter is entitled to make use of its benefits only; he cannot dispose of the item itself. It says in a statement of the Islamic Fiqh Council: The reason for the prohibition of rent-to-own schemes is that they involve two different transactions at the same time concerning the same item. End quote.

See also the answer to questions no. 97625 and 125909

The way to get out of that is:

The bank should sell you its share of the house for monthly instalments, even if that is for more than the price for which it bought it, and it should make the house collateral until the instalments are paid off in full, so as to protect its rights.

And Allah knows best.

Answer 4

ASSALAMWALIKUM MY HUSBAND has rented 3 homes for rent and collects the rent. I have fixed some amt in bank can I can give the interest amt to him in the form of rent.And collect the rent of one home for me.