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:

I want to obtain house on "Girvee" (mean take occupancy of home for certain time against certin amount). I will use their house and they will use my money.  Can you please explain me is it right to do like this.   

(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:

Take house as collateral gurantee

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 none worthy of worship but Allah Alone, and we bear witness that Muhammad (saws) is His slave-servant and the seal of His Messengers.

There is an allowance and permissibility in Shariah if one chooses to give a loan to someone and ask them to place something valuable as a collateral or a guarantee for the loan, which would be returned to them when they pay back their loan.

But one is not allowed to make any benefit from the collateral or guarantee placed with them, for that then would constitute the unlawful ‘riba’ in the Sight of Shariah Law and of Allah Subhanah.

You are well within your rights to demand that the debtor place his house for the loan he has taken from you, but you do not have the right to occupy the house, or place the house on rent and consume the rent….for that then would constitute the unlawful ‘riba’. If you wish to occupy the house, then you should pay the market rent for the house, and if you wish to place the house on rent, then the rent income should either be given in full to the original owner of the house or deducted from his loan.

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