The Beneficiary’s Use of the Pledged Item
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The second question of Fatwa No. ( 20244 )
Q2: A man owes a debt to another man. The debtor pledged a piece of land as security for it. Is the creditor permitted to benefit from that pledged land by farming it, renting it out, or doing something similar?
A2: If the pledged item is of a type that does not require maintenance or care, such as goods
and real estate, including land and buildings, and it was pledged for a debt other than a loan, then it is not permissible for the pledgee to benefit from it through cultivation or rental, except with the permission of the pledgor; because it is his property, and its increase is likewise the right of the pledgor. If the pledgor permits the pledgee to benefit from this land, and the debt is not a loan, then it is permissible for the pledgee to benefit from it, even without compensation, provided that this is not in exchange for delaying the time of repayment. If his benefit from the pledge is in exchange for that delay, then it is not permissible for the pledgee to benefit from it. However, if this pledged land was pledged for a loan, then it is not permissible for the pledgee to benefit from it in any way; because it is a loan that yields benefit, and every loan that yields benefit is riba (usury or interest) by the consensus of the scholars. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Q2: A man owes a debt to another man. The debtor pledged a piece of land as security for it. Is the creditor permitted to benefit from that pledged land by farming it, renting it out, or doing something similar?
A2: If the pledged item is of a type that does not require maintenance or care, such as goods
and real estate, including land and buildings, and it was pledged for a debt other than a loan, then it is not permissible for the pledgee to benefit from it through cultivation or rental, except with the permission of the pledgor; because it is his property, and its increase is likewise the right of the pledgor. If the pledgor permits the pledgee to benefit from this land, and the debt is not a loan, then it is permissible for the pledgee to benefit from it, even without compensation, provided that this is not in exchange for delaying the time of repayment. If his benefit from the pledge is in exchange for that delay, then it is not permissible for the pledgee to benefit from it. However, if this pledged land was pledged for a loan, then it is not permissible for the pledgee to benefit from it in any way; because it is a loan that yields benefit, and every loan that yields benefit is riba (usury or interest) by the consensus of the scholars. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.