Buying a house through a rent-to-own scheme
Question I am in the UK and it is impossible to buy a house unless you have a very large sum of money. However now there are halal’ mortgages being offered to muslims and i would like to know if these are permissible. The way it works is that a muslim bank buys 80% of…
Question
Praise be to Allah.
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.
