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Sales Fatawa / Lease ending with ownership.

Lease ending with ownership.

publish date : 2016-03-21 | Views : 2272
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What is the ruling on lease ending with ownership?

الإجارة المنتهية بالتمليك

Praise be to Allah, and may Allah’s peace and blessings be upon the Messenger of Allah, his family and his companions.

To proceed.

In response to your question, I say:

Lease ending with ownership is a new contract in the financial arena, like the rest of the contracts which come with a specific form which might have legalreservations in Islam, then these reservations will be redressed by way of amendment and removal of the causes these reservations. For this reason, the fatwas which were issued when this contract first emerged  prohibited it based on that the contract combined rules of two contracts in one contract. It combined the rules of a sale contract and lease contract in a new contract and this cannot be possible.
The real difference was on the two contracts, hence during that time, a fatwa prohibiting this contract was issued by the Council of Senior Scholars due to its combining of rules of two contracts in one whereby these two contracts are different and their rules cannot be combined because of their differences. After that, amendments to the contract were done by companies, specialists and researchers, and a name taking into account reservations and remarks of this type of contract was found. Therefore the resolution which was issued after that by The International Council of Jurisprudence permitted some of the types of this contract and prohibited others, therefore, it is not possible to say that lease ending with ownership is an absolutely prohibited contract, and we also do not say:" It is an absolutely permissible contract. This is because there is no single form of this contract but rather there are many forms. However if a person enters into one of these contracts, and a dispute arises between him and the lessor or seller, in this case the court is the one that will settle the dispute between the contracting parties on the reality of the contract, whether it is lease or sale or whether it is permissible or prohibited. All this will be decided by the judiciary.
In any case, leasing ending in possession is better than many types of financing which are named Islamic Finance or financing which is claimed to be taking account of Islamic standards, when mostly they are a type of circumventing the explicit forbidden interest by ways of evasion which are not good and sincere that will make the contract free from interest.
This is what is related to lease ending into ownership. There is nothing wrong with many types available. If you are confused by any particular type, you can ask about it.

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