What is the ruling on renting out shops with goods included, along with a monthly monetary fee, after which the shop is returned to its owner with the goods that were in it at the time of the lease? What is the validity of this transaction?
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The questioner : May Allah reward you. This is a transaction that has become very common now, called "equipping shops." Its form is: a man comes to the owner of a shop, for example, a spare parts shop or something similar, and says to him: "I will take your shop for three years, and I will give you ten thousand riyals every month, and after three years, I will return the shop to you with the goods I received from you in full." What is the ruling on this transaction? May Allah reward you!
The Shaykh : But what if he takes the shop and sells what is in it?
The questioner : No, no, no sale contract has taken place. Its form is that he comes to him and says to him: "I will take your shop for a period of three years."
The Shaykh : Yes.
The questioner : And I will give you ten thousand riyals every month, or eight thousand riyals, according to what they agree upon.
The Shaykh : Very well.
The questioner : And after the three years, naturally, any income exceeding the eight thousand will belong to this second person.
The Shaykh : Yes.
The questioner : And after the three years, I will return the shop to you as it was, with the goods in it, and its apparent form is that of a lease.
The Shaykh : Who do the items in the shop belong to?
The questioner : They belong to the first owner.
The Shaykh : To the first owner.
The questioner : Yes, as evidenced by the fact that he will return them to him after three full years.
The Shaykh : This is a contract that is not valid in reality, unless he prices the items currently present, and they become the property of the second person, and he gives him ten thousand every month as rent.
The questioner : Rent for the shop, meaning?
The Shaykh : Rent for the shop, and the items present in it belong to the final lessee, not the first one, as his property; he benefits from them, and he bears their loss. So there is nothing wrong with that. But what you mentioned is not permissible, because it is clear gharar (excessive uncertainty) that does not apply to partnerships, nor to leases, nor to sales.
The questioner : This, May Allah reward you, has become very common now!
The Shaykh : No, we see that it is not permissible, and that it is obligatory for the general public, when such new transactions occur, to present them to the scholars before entering into them. Transactions are part of the religion, and are not subject to custom or what people practice. If that were the case, we would say that banks are lawful, and that gambling is lawful, and that all transactions that people have become accustomed to, whether abroad or at home, are lawful, even though transactions are undoubtedly part of the religion. When a person eats haram (forbidden), it is far from being likely that his supplication will be answered, may Allah protect us from that.
The Shaykh : But what if he takes the shop and sells what is in it?
The questioner : No, no, no sale contract has taken place. Its form is that he comes to him and says to him: "I will take your shop for a period of three years."
The Shaykh : Yes.
The questioner : And I will give you ten thousand riyals every month, or eight thousand riyals, according to what they agree upon.
The Shaykh : Very well.
The questioner : And after the three years, naturally, any income exceeding the eight thousand will belong to this second person.
The Shaykh : Yes.
The questioner : And after the three years, I will return the shop to you as it was, with the goods in it, and its apparent form is that of a lease.
The Shaykh : Who do the items in the shop belong to?
The questioner : They belong to the first owner.
The Shaykh : To the first owner.
The questioner : Yes, as evidenced by the fact that he will return them to him after three full years.
The Shaykh : This is a contract that is not valid in reality, unless he prices the items currently present, and they become the property of the second person, and he gives him ten thousand every month as rent.
The questioner : Rent for the shop, meaning?
The Shaykh : Rent for the shop, and the items present in it belong to the final lessee, not the first one, as his property; he benefits from them, and he bears their loss. So there is nothing wrong with that. But what you mentioned is not permissible, because it is clear gharar (excessive uncertainty) that does not apply to partnerships, nor to leases, nor to sales.
The questioner : This, May Allah reward you, has become very common now!
The Shaykh : No, we see that it is not permissible, and that it is obligatory for the general public, when such new transactions occur, to present them to the scholars before entering into them. Transactions are part of the religion, and are not subject to custom or what people practice. If that were the case, we would say that banks are lawful, and that gambling is lawful, and that all transactions that people have become accustomed to, whether abroad or at home, are lawful, even though transactions are undoubtedly part of the religion. When a person eats haram (forbidden), it is far from being likely that his supplication will be answered, may Allah protect us from that.