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There is a concept called "Usufruct" (use fruit) where an item is lent, but it produces something during the period of the loan.

I lease my two horses to Omar for a year while he uses my house. These two horses produce a foal but the market price for houses and horses stays the same.

If I get to keep the foal, Is the value of the foal (minus the depreciation of the horses due to age) considered interest on the loan of the house?

If Omar gets the foal, it he receiving interest like a depositor at a bank?

  • this looks like about these 2 things were swapped, and it looks like about they both where given to omar. clarify. – qdinar Apr 22 '17 at 7:09
  • @qdinar : You're right. That's why I changed it to Omar using his house. – user24306 Jul 18 '18 at 16:55
  • Well I think you just need to come to a consensus between you two. I myself think Omar should return the foal to you since it was your horse. And that foal isn't considered riba. – user24306 Jul 25 '18 at 13:53
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Usufruct is allowed and is not interest. Its simplest examples are that it is permitted for a farmer to rent land for cultivation, it is permitted for a merchant to use a rental horse to travel for doing business, it is permitted for a trader to rent a shop to conduct his sales in, and it is permitted for a lessee to sublet leased property.

All these actions may produce a profit for the lessee, however these actions are trade, there is no guaranteed or predetermined return hence it is not riba. Now if the lessor had guaranteed the lessee a fixed profit from using his property and was liable to make up for it, then this would be riba.

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These are two separate agreements that do not link to each other.

If the horses produce a foal, then the foal's owner is decided based on the contract. If the purpose of the horses was travelling then the foal stays with the owner. If not, it is decided based on what the contract stipulates.

For example, the Prophet (SAW) leased some land to the Jews and they made a contract about how the profit created from that land is to be distributed:

Allah's Messenger (ﷺ) rented the land of Khaibar to the Jews on the condition that they would work on it and cultivate it and take half of its yield. (Bukhari)

The house's loan is completely unrelated, so any profit you gain from the horse's leasing will not be riba' just because you also happened to loan the house to the same person.

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