The Lease Ending in Ownership الإيجار المنتهي بالتمليك

Questioner: O Shaykh, the issue of the lease ending in ownership — or, as they say, "with a promise of ownership." That is one issue, and there is an issue within it: he may take a car and then say, "I want to pay it off early," so it takes the form of "reduce and hasten" (da' wa ta'ajjal). What is the ruling on it?

The lease ending in ownership: the correct view is that it is permissible, though it would be better not to call it a lease ending in ownership; rather it should be called a sale ending with the settlement of the amount. He leases the item, and the lessor does not have the right to strip the lessee of ownership; so this is in the form of a sale, not in the form of a lease.

If it were truly in the form of a lease, then at the end of the lease he would take the property back from him and say, "Go; the rest ends with the term." But he cannot do that. When the lease ends, he pays what remains of the money and takes ownership of it. He is told: "You want to buy? Pay what remains, then it is yours. You don't want it? What has gone has been counted against you as rent." A lease does not work like this. But of course it can be justified; it is set up this way for two reasons:

The first matter: to preserve rights, because if it were a sale they might not be able to recover their rights from others. That is, when he sells me the item for a hundred thousand riyals on condition that I pay two thousand riyals a month, and he pays for two months, four months, six months, eight months, and then says, "I don't want to pay."

They will of course sell the car; then when they sell it to recover their money, the car does not reach the required amount. How do they recover the rest from the other party? They may be unable to, and there may be stalling. And it is not a matter of one or two people; it may reach thousands of cases, and then the harm becomes a harm of tens or hundreds of millions.

It is also permissible in the Shari'ah to say: "At the end, I commit to you — if you commit to the amount — to sell to you at the end if you wish." And this is what exists.

This is like selling your house now for a million riyals on condition that he gives you, say, an instalment of money each year; then he is unable to pay you, the period ends and he has paid you nothing. It is your right to strip him of ownership and then count what has passed against him as rent. There is no difference between this and the lease ending in ownership.

Now what has passed is all counted as rent. The arrangement begins as the yearly rent of the car; at the end, if you want to buy, the seller is bound by condition to sell, and the buyer has the choice: if he wishes, he pays what remains of the money and takes ownership of the car, and if he wishes, he says, "I don't want it," and the money paid so far goes to the lessors, in the sense of being rent.

As for one who says, "This is two conditions in one sale," we say to him: there is no objection to two conditions in a sale if they are within what the contract entails — as if you bought firewood and stipulated to the firewood seller that he carry it to your house, unload it in the house, and chop it. There is no objection to this.

These are three conditions in a single contract, but this does not contradict what the contract entails.

Conditions that do not contradict what the contract entails are fine. As for the hadith "The Messenger of Allah forbade two sales in one sale," and the hadith "There are not two conditions in a sale," what is meant by it is 'inah: that you buy an item and say, "I want it for a hundred riyals on credit, or for eighty in cash," and then he takes the item without settling on either. This is forbidden and not permissible.

Because on which of the two terms was the sale concluded? Nothing was concluded — neither the first nor the second. So here it may be said that this is what is meant in the hadith. The other view, the opinion of Ibn Taymiyyah and Ibn al-Qayyim, is that what is meant is 'inah itself: you buy the item — this is the first contract — then you sell it back to the one you bought it from. These are two contracts in one sale, and this is what is forbidden in the opinion of Ibn Taymiyyah and in the opinion of Ibn al-Qayyim as well, and what is meant by "The Messenger of Allah ﷺ forbade two sales in one sale" is 'inah. As for conditions that do not contradict what the contract entails, made to preserve and secure rights, there is no harm in them.

Furthermore, the default in conditions and contracts is permissibility. This is the madhhab of the majority of scholars, contrary to Ibn Hazm, who said the default in them is invalidity — and this is weak. For the apparent meaning of the Qur'an is explicit, indicating that the default in contracts is permissibility, as Allah says: "And fulfil the covenant of Allah when you have taken it" [al-Nahl: 91] — meaning that what has been concluded by covenant is what must be fulfilled — and there is the hadith, which has some weakness: "The Muslims are bound by their conditions, except a condition that makes lawful what is unlawful or makes unlawful what is lawful."

[The second part of the question, on "reduce and hasten," was raised again later in the session; the answer is in Reducing a Debt for Early Settlement ("Reduce and Hasten").]

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