Mu' meneen Brothers and Sisters,

As Salaam Aleikum wa Rahmatullahi wa Barakatuh.  (May Allah's Peace, Mercy and Blessings be upon all of you)

One of our brothers/sisters has asked this question:

Dear Brother, As Salam Alaikum.

I have availed of a home loan thru a bank which is obviously based on interest and have realised the sin which I have landed myself in.

In order to set things right at the earliest, I have decided to sell the house and repay the bank and save myself from this very grave sin and ask Allah (SWT) for his mercy and forgiveness.

There was one idea though that came to my mind which would help me in retaining the house as well as clear the bank loan and the interest involved for which I seek your guidance.

I own a shop which has been rented out currently. I am in a position to mortgage the shop to the tenant. The way it works in my country is as follows.

The tenant gives me a fixed sum of money and enters into an agreement whereby he does not pay me any monthly rent. On completion of the term for which the agreement has been agreed upon I return his money and he in turn starts paying me the rent that is if he wishes to continue using my shop.

I plant to use this fixed amount to pay off the bank towards my house and clear my loan and in the time that I get to repay my tenant I gather the said amont which I owe him and return it on completion of the agreement.

As long as my tenant enjoys using my shop I enjoy his money which I have used to pay the bank.

I hope the above situation is clear and sincerely pray for your advice in the light of the Quran and Sunnah.

Thank you.

Vas salam

(There may be some grammatical and spelling errors in the above statement. The forum does not change anything from questions, comments and statements received from our readers for circulation in confidentiality.)

Answer:

House on mortgage interest

In the name of Allah, We praise Him, seek His help and ask for His forgiveness. Whoever Allah guides none can misguide, and whoever He allows to fall astray, none can guide them aright. We bear witness that there is no one (no idol, no person, no grave, no prophet, no imam, no dai, nobody!) worthy of worship but Allah Alone, and we bear witness that Muhammad (saws) is His slave-servant and the seal of His Messengers.

Allah says in the Holy Quran Chapter 2 Surah Baqarah verse 274-276:

But those who devour ‘riba’ become like the one whom Shaitaan has bewitched and maddened by his touch. They have been condemned to this condition because they say, “Trade is just like ‘riba”, whereas Allah has made trade halaal and ‘riba’ haraam. Henceforth, if one abstains from taking ‘riba’ after receiving this admonition from his Lord, no legal action shall be taken against him regarding the ‘riba’ he had devoured before: his case shall ultimately go to Allah. But if one repeats the same crime even after this, he shall go to Hell, where he shall abide for ever! Allah deprives ‘riba’ of all blessing and develops charity, and Allah does not like an ungrateful, sinful person.

Allah says further in the Holy Quran Chapter 2 Surah Baqarah verse 278:

O Believers!, fear Allah and give up that ‘riba’ which is still due to you, if you are true believers. But if you do not do so, then you are warned of the declaration of war against you by Allah and His Messenger!

It is indeed good and commendable, and an evidence of your sincere fear of Allah and the Last Day, that you have decided to do away with dealing in interest, which has been specifically and clearly forbidden by Allah and His Messenger (saws). May Allah Subhanah accept your intentions and strivings of repentance, help you in your efforts to stay away from what He has declared as forbidden, and enrich you from His Unlimited and Endless Bounties in this world and the Hereafter. Ameen.

Your Statement: The way it works in my country is as follows.
The tenant gives me a fixed sum of money and enters into an agreement whereby he does not pay me any monthly rent. On completion of the term for which the agreement has been agreed upon I return his money and he in turn starts paying me the rent that is if he wishes to continue using my shop.
Dear and Beloved Brother from the provided details of above stated transaction, because the lump-sum money has to be returned to the tenant after the completion of a fixed term it seems that it is the ‘interest’ of this lump-sum which pays the monthly rent until the money is returned to the tenant. In our humble opinion, such a transaction would not be completely legal in the Sight of Shariah.

It is the taking and returning of the same amount, and the taking of some benefit during this fixed period is what is akin to the ‘riba’ which has been clearly prohibited in Islam.

If the transaction could be arranged whereby you do not have to return the lump-sum received from the tenant, like taking advance rent from the tenant for a number of years, etc.; then such a transaction would be absolutely legal in the Sight of Shariah.

Whatever written of Truth and benefit is only due to Allah’s Assistance and Guidance, and whatever of error is of me alone. Allah Alone Knows Best and He is the Only Source of Strength.

Your brother and well wisher in Islam,

Burhan