Fatwa No : 82170

What do the esteemed scholars and jurists of Islam say regarding the following issue:
(1) A person rented a house. The landlord imposed a condition that if the tenant gives fifty thousand as advance payment, the rent will be 2,500 (per month); but if the tenant gives one hundred thousand as advance, the rent will be 2,000. The landlord made this agreement for two years, and the deal was finalized at one hundred thousand advance. After about six months, the landlord needed some money, so he told the tenant: "If you give me fifty thousand more in advance, I will reduce the rent by one thousand (i.e., make it 1,000); and if you give me one hundred thousand more in advance, then I will not take any rent from you for three years."
Is it permissible according to Islamic law to make such an agreement?
Note: The value of the house is five hundred thousand.
(2) Is the following situation permissible according to Islamic law: The tenant pays an additional one hundred and fifty thousand rupees and becomes the owner of half the house, and then, with the landlord’s permission and consent, lives in the remaining half of the house without rent for three years?

الجوابُ حامِدا ًو مُصلیِّا ً

1. In the mentioned scenario, all the stated forms fall under the principle of "Every loan that draws a benefit is riba (interest)", and are therefore impermissible according to Shariah and fall under the category of usury (riba). Hence, it is necessary to avoid such dealings.
2. After mutually agreeing and paying half the price of the house to become the owner of half of it, residing in the remaining half with the permission and consent of the original owner is permissible, provided that this condition is not stipulated in the contract of sale.

مأخَذُ الفَتوی

قال للہ تعالیٰ: ﴿وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا﴾ (البقرة: 275)۔
وفي البيهقي: انه قال كل قرض جر منفعة فهو وجه من وجوه الربا اھ (۵/ ۵۷۳)۔
وفي الدر : كل قرض جر نفعاً حرام اھ (۶/ ۱۶۶)۔