Transferring lease-to-own contract from lessee to another person
30-3-2017 | IslamWeb
Question:
Assalaamu alaykum. How are you doing? I would like to ask you a basic question about a tricky situation. There is a car that I like which is under lease. The actual value of the car is QAR 110,000 on outright purchase, but a friend of mine bought it through installments over three years, wherein he will end up paying 130,000. Now, due to some difficulty, he has to transfer the lease, which he has paid for more than eight months. He is willing to transfer the lease to me for just QAR 10,000. At present, the car value is like QAR 104,000 approximately. It is still in brand new condition as he has not driven it much, and if I continue his lease, I will end up paying QAR 96,300, which is actually a profit to me compared to the car's value. Is it halal for me to continue the lease? Thank you. Wassalaam.
Answer:
All perfect praise be to Allah, The Lord of the worlds. I testify that there is none worthy of worship except Allah and that Muhammad, sallallahu ‘alayhi wa sallam, is His slave and Messenger.
There are certain conditions for the validity of the lease ending in ownership agreement, and we have previously underlined them in fatwa 321706.
In any case, it is impermissible to sell the property which is leased through a lease-to-own contract because the lessee (your friend in this case) does not own the property by merely conducting the lease contract. Al-Ma‘aayeer Ash-Shar‘iyyah (Sharia standards) reads, "In all cases of ownership based on a promise of gift-giving or a promise to sell, the ownership contract must be concluded upon fulfilling the promise. The ownership of the property is not automatically transferred (to the beneficiary) merely based on the initial promise document."
Although it is invalid for the lessee to sell the leased property because he does not own it at that point, it is permissible for him to lease it out to another because a lease, in essence, is selling the benefit of the property, and the lessee owns that benefit. Al-Ma‘aayeer Ash-Shar‘iyyah by Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), regarding the lease ending in ownership contract, reads, "It is permissible for the person who leased a property to lease it to other than the landlord in return for a payment equal to, greater than, or less than the specified rent, to be paid in advance or as a delayed payment. This is known as sublease; it is allowed unless the landlord has stipulated that the lessee must not lease out the property to another or should obtain his permission first."
Allah knows best.