The Ruling on Pledging Land and Benefiting from It by Farming It
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Question:
After this, a message was sent by one of the listening brothers. The sender (S. M. A.) resides in Riyadh. Our brother says: What is the ruling on pledging agricultural land when the owner of the land is in need of a sum of money? He pledges a feddan, or half a feddan, depending on the amount required by that person. He farms the land and takes its harvest until he repays the amount he paid. Is there anything wrong with this? May Allah reward you with good.
Answer:
There is no blame on him for pledging land, or a house, or a shop—meaning a store—or anything else in the debt that is upon him. But if he says to the pledgee: You farm it and benefit from it until I pay you; this is riba (usury or interest). This is not permissible. This means that he benefits from it in exchange for his delaying the repayment of the loan. This is not permissible. However, it is permissible for it to be a pledge for him, and for him to use it for farming in the Sharia-compliant manner, where he takes it from others for half or a quarter. He leases it, and the rent is deducted from the debt. The rent should be the rent of its like, without injustice or favoritism. One must be careful of the forbidden stratagem.
The point is: there is nothing wrong with pledging it in his debt, but he should not have any of its produce. Rather, its produce belongs to its owner, or it is sold and the debt is paid with it. There is nothing wrong with him taking it by lease, and the lease is deducted from the debt, provided that the rent is the rent of its like, as it is leased to others, without him being favored. Yes.
The presenter : May Allah reward you with good, and may He do you good.
After this, a message was sent by one of the listening brothers. The sender (S. M. A.) resides in Riyadh. Our brother says: What is the ruling on pledging agricultural land when the owner of the land is in need of a sum of money? He pledges a feddan, or half a feddan, depending on the amount required by that person. He farms the land and takes its harvest until he repays the amount he paid. Is there anything wrong with this? May Allah reward you with good.
Answer:
There is no blame on him for pledging land, or a house, or a shop—meaning a store—or anything else in the debt that is upon him. But if he says to the pledgee: You farm it and benefit from it until I pay you; this is riba (usury or interest). This is not permissible. This means that he benefits from it in exchange for his delaying the repayment of the loan. This is not permissible. However, it is permissible for it to be a pledge for him, and for him to use it for farming in the Sharia-compliant manner, where he takes it from others for half or a quarter. He leases it, and the rent is deducted from the debt. The rent should be the rent of its like, without injustice or favoritism. One must be careful of the forbidden stratagem.
The point is: there is nothing wrong with pledging it in his debt, but he should not have any of its produce. Rather, its produce belongs to its owner, or it is sold and the debt is paid with it. There is nothing wrong with him taking it by lease, and the lease is deducted from the debt, provided that the rent is the rent of its like, as it is leased to others, without him being favored. Yes.
The presenter : May Allah reward you with good, and may He do you good.
Source
binbaz.org.sa
The Arabic text is copied verbatim from the original source, without any edits.