Ijarah muntahiya ila tamleek – Rental Purchases

Ijarah muntahiya ila tamleek – Rental Purchases

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All Praise be to Allah and all blessings be on the Prophetﷺ.

Ijarah in the Shariah is very important because it deals with many conventional trade practices in today’s society. Ijarah means providing services and goods temporarily for a wage or a reimbursement. [1]

In terms of Islamic banking system it means that the bank will purchase the asset and lease out to the customer for an agreed rental fee. This agreement will not include a promise to buy the asset at the end of the term of the agreement since this is pure renting.

It is different from the Conventional leasing system, because it does not contain any condition which contradicts the Shariah. All risks of ownership are borne by the Lessor while all risks pertaining to normal usage are based by the lessee in Ijarah system while in conventional banking; all risks are with the customer. Moreove
r the lessor cannot charge any interest on delayed payment since it is a form of a prohibited transaction. [2]

Ijarah is generally divided into two kinds: Operating lease and Rental Purchases. Operating lease is a kind of renting in which the asset returns to the lessor after the period of lease has been completed and after that the lessor then looks for a new lessee to lease out the asset. All the risks of ownership, recession, etc remains with the lessor.

There is also a third type of leasing which is known as forward lease or Ijara Mawsoofa bil thimma. This lease is executed at a future date. This type of leasing or Ijarah is generally a combination of construction finance and a redeemable leasing agreement.

While Rental Purchases or ‘ Ijarah muntahiya ila tamleek’ is a way in which the customer has an option to purchase the asset at the end of the term. It is similar to Ijarah in the sense that the asset is leased/rented out but the difference comes when the option is given to the lessee to purchase the asset at the end. When the last installment is paid, the lessee can have exercise three options that is he could either renew the contract, terminate the contract or he could purchase the asset. [3]

It is permissible in the Islamic Shariah as long as the rental contract is accompanied by a separate and independent contract giving the asset to the lessee as long as he pays of all the rent. This is also unanimously agreed by the Fiqh Council.[4]

However this type of contract is not a mixed contract which is known as “Rent to Own”. In this type of contract, there is a combination of two types of contracts, where the lessee keeps paying rent and then when the last rental amount is given, the asset becomes his. This type of transaction according the Council of Senior scholars is prohibited since it is neither a sale nor is it a purely rental service. The purchaser or the lessee cannot sell the asset until the last installment is paid and if he fails to do so, the lessor can take the asset back and the money is not given back. In this case the lease contract automatically changes into a sale contract and the only consideration which is paid is the rent. Hence it is clear that this type of contract is totally different from Rental Purchases and this type of Rent to own contract is prohibited.[5]

Another one which is prohibited is a transaction where the lease agreement itself contains an option to purchase the asset. Since this condition is included in the contract itself and no separate and independent contract was signed, this form also becomes prohibited.

The Lessor in an Ijarah transaction is called as the Mu’jir , while the Lessee is called as the Musta’jir and the rent is called as the Ujrah.  If the deal involves agreeing to two different contracts for the same commodity for the same duration, at the same time then it becomes a form of a prohibited contract. It should be totally an independent contract. The sale contract succeeds the lease contract and the lease contract should be a bona fide contract and not just a farce or a veil to hide a sale transaction.

 

Moreover, all the costs of the ownership are borne by the lessor since he owns the asset while all the costs relating to the operations and the maintenance is borne by the lessee. All the Shariah rulings are applicable to Ijarah and all the shariah rulings relating to sale will be applicable when the asset is sold to the lessee.

Another contract which is an independent contract stating that the asset will go as a gift to the lessee is permissible since it is not embedded in the leasing contract and is separate from it. This type of gift will only be applicable once the lease period has been completed and when the lease or rental payments have been paid by the lessee. [6]

In Modern Islamic banks, the leasing contract is the major contract which follows all the Shariah conditions relating to Ijarah. The bank can also take an earnest money for making sure that the person is indeed serious in leasing the asset and this amount is kept by the bank as a trust. The other contract is the subsequent sale, promise to gift or promise to a contingent gift which comes under the Rental Purchases.  The bank can also take a Tafakul cover or an Insurance cover of the asset under the Shariah conditions and in case of default, the amount received over and above the bank’s costs and expenses goes to the client. [7]

Hence there are several conditions which make the Rental Purchases permissible as the Prophet ﷺ said “The Muslims are bound by their (agreed) conditions except the condition that permits what is forbidden or forbids what is permissible.”[8]

One must be very careful to not enter into a prohibited transaction and make sure that all the terms and conditions are Shariah compliant, since many a times the conventional hire purchase system is simply renamed as Ijarah Muntihiyah bi Tamleek and they do not follow any conditions of the Shariah. In this way they easily deceive the innocent lessee and causing him to enter into a prohibited transaction.

And Allah Knows best.

 

Bibliography

http://www.dummies.com/how-to/content/leasing-or-renting-ijara-in-islamic-finance.html.

http://www.investment-and-finance.net/islamic-finance/i/ijarah-muntahia-bittamleek.html.

https://islamqa.info/en/99799.

https://islamqa.info/en/14304.

http://www.slideshare.net/mandalina/al-ijarah.

http://islamicstudies.islammessage.com/Fatwa.aspx?fid=117.

https://books.google.co.in/books?id=HjwL-vOKEVQC&pg=PA293&lpg=PA293&dq=Ijarah+muntahia+al+tamleek&source=bl&ots=f9Qm3ZGQUu&sig=P5gUTAFDnEjzWqLSwpZwr8bccmo&hl=en&sa=X&ved=0ahUKEwjYud-6lP7JAhVQGo4KHQinAoAQ6AEISTAH#v=onepage&q=Ijarah%20muntahia%20al%20tamlee.

 

 

[1] http://www.dummies.com/how-to/content/leasing-or-renting-ijara-in-islamic-finance.html

[2] http://www.slideshare.net/mandalina/al-ijarah

[3] http://www.investment-and-finance.net/islamic-finance/i/ijarah-muntahia-bittamleek.html

[4] https://islamqa.info/en/99799

[5] https://islamqa.info/en/14304

[6] http://islamicstudies.islammessage.com/Fatwa.aspx?fid=117

[7] https://books.google.co.in/books?id=HjwL-vOKEVQC&pg=PA293&lpg=PA293&dq=Ijarah+muntahia+al+tamleek&source=bl&ots=f9Qm3ZGQUu&sig=P5gUTAFDnEjzWqLSwpZwr8bccmo&hl=en&sa=X&ved=0ahUKEwjYud-6lP7JAhVQGo4KHQinAoAQ6AEISTAH#v=onepage&q=Ijarah%20muntahia%20al%20tamleek&f=false

[8] 6 Abu Daud, Sunan Abi Daud, Bait al-Afkar al-Dawliyyah, 1999, p. 398, hadith no. 3594.

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Ibn Taymiyyah – His contributions in Aqeedah & his influence on 21st Century

Ibn Taymiyyah – His contributions in Aqeedah & his influence on 21st Century

68b58cf954a7a6c97ff56a3817a00f41Ibn Taiymiyyah, the outstanding scholar and one of the giants of Islam, is one of the leading pioneers in the Salafi thought and reforming the religion from the shackles of cultural interpretation to the authentic sources i.e the Qur’an and the Sunnah. He is said to be one of the Mujaddids of Islam. A Mujaddid is the one who brings reform to the religion when it degrades and this is one of the most important issues which Allah has blessed this ummah with. If it hadn’t been for such Mujaddids, the deen would have corrupted and tainted like the way it happened with the previous prophets and their nations. This is based on the hadeeth of the Prophet ﷺ where he prophesized that Allah will raise for this community at the end of every hundred years the one who will renovate its religion for it.[1].

He was born at a time when there were a lot trials and tribulations. The trials were both internal and external. The internal trials of the Ummah were such that there were distortions of the Aqeeda, since there were Sufis, the Ahlul Kalam, the Shias, the Rafidhis and various other groups. He was imprisoned too because of his claims and his beliefs going against the majority. Islam doesn’t recommend us to follow the majority in every issue; however, we are required to follow the evidence wherever it leads us. He rejected their arguments and corruption in fundamental and core areas like Asma wa siffat, Tawassul, seeking the help of the prophets and saints, hulool and various other deviant belief systems.

While the external trials were the political wars like the Tartar invasion and such. In all the areas of his life, he was outstanding by the grace of Allah and he was a role model for the followers of the Quran and authentic Sunnah.

The following are some of his contributions in Aqeedah, they are not meant to be exhaustive and they just give a glimpse on his understanding of the Religion and his deep insight:

  1. Asma Wa Sifaat: Allah’s names and attributes i.e the Asma wa Sifaat were always in deep contention among various sects of Islam who wanted to change the way the Asma wa Sifaat were understood. There were two types of extremes as usual. There were the rejecters like Mu’tazilah who rejected the names and attributes totally, while there were others who said the names and attributes resemble the human beings. Ibn Taymiyyah was the one who said that the Ahlus Sunnah was Ja’mah were always clear about this issue and they had the balanced view.

 

He said the Allah should be described as he described himself in the Qur’an and as the Prophet ﷺ described him, without distorting, denying, and without asking how, or likening him to his creation. His names, attributes and his actions are all real and his essence is also real and these are not mere names and these are not be interpreted wrongly like some groups like the Ash’aris do. He was wrongly accused to be an anthropomorphist because of this statement and was imprisoned. Hence he saved the Ummah from abnormal and deviant views regarding the Asma Wa Sifaat by his sacrifices and deep understanding.

 

  1. Tawassul: While there were deviations in Tawheed Al Asmaa Wa Sifaat, the more alarming and shocking problem of the Ummah, which is even continuing till today, is Shirk in Tawheed al Ibadah. At his time there were many Sufi groups, who claimed that for any dua to be accepted, one must go through prophets or saints, since the normal people are too sinful to even ask Allah. This was rejected by Ibn Taymiyyah, and he said that such act required evidence and there is no evidence for a Muslim to do such an act. Moreover, instead of asking Allah, there were people who were asking prophets, awliyaa and saints for help. This is clearly Shirk al Akbar and one must save himself from it.

 

  1. Aql: There were many philosophers who had come like saying that the Aql or the intellect is the only source by which one could know right from wrong. Ibn Taymiyyah opposed this view and he said that revelation takes the first precedence and the human intellect and the powers of reason are only subservient to it.

 

 

  1. Taqleed: Although Ibn Taymiyyah was from the Hanbali School, he did not stick to the ruling of his madhab and he critically censured the scholars for blindly following the Imams. He himself did not stick to his Madhab but he went to the sources of Quran and Sunnah. Hence he was against taqleed and he likened it to the way the Jews and Christians made their scholars as the ultimate authority when they made Halaal as haraam and vice versa. One must follow the three generations of the Salaf and anything which contradicts their understanding, is flawed and an innovation. Taqleed of scholars can also lead one to do Shirk, since instead of following the Qur’an and Sunnah, a person blindly follows his scholar, his shaykh and makes him the ultimate authority for the Shariah. Hence this is an important area of Aqeedah which one must be very careful of not falling into it.

 

  1. Wahdatul Wajood: Ibn Arabi was the prominent person who promoted this philosophy which is also known as Monism. They wanted to merge their souls with Allah’s essence and reach a high level and this is itself a heretical belief. It means that everything is Allah and Allah is everything. Ibn Taymiyyah rejected this philosophy and said that they were deluded. He said that Allah has attributes and he is the creator and he is separate from the creation.

Hence the above were some of the areas in which Ibn Taymiyyah laid ground breaking foundations and contributions for the Ummah so that the coming generations could save themselves from these pitfalls.

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Ibn Taymiyyah –His Influence on the 21st Century Reform Movements

Ibn Taymiyyah, even after so many centuries is still revered and followed, his thoughts and ideas were far ahead from his time and place and were revolutionary for the Islamic thought and expression. With the Ummah again, becoming degraded as time passed, and Shirk and Bid’ah becoming common, his works were picked up by none other than Muhammad ibn abd al Wahhab. He was born in a place where there was a lot of Shirk and people worshipped and beseeched every other saint, wali besides Allah and Allah guided him to read Ibn Taymiyyah’s works and understand true tawheed and not get bogged down by the majority of the people who claim to follow authentic Islam. Moreover, many scholars and thinkers of Islam have read his books and were guided towards the true understanding of the Salaf and his works were monumental in bringing reforms throughout the world.

In the 21st century i.e the present times, it can be seen that his works are read, researched extensively and everyone has an air of authenticity and they want to check up every claim. The new generation of Muslims, are not satisfied with just the ruling on issues, they now crave for evidence on each and every matter and the reasoning on how the ruling was made. This truly goes back to the efforts and sacrifices of Ibn Taymiyyah and his like. Ibn Kathir and Ibn Al Qayyim are among his famous students who have also contributed a lot to Aqeedah and other areas of Islamic Shariah. In fact, the most famous tafsir for the common muslims is Tafsir Ibn Kathir.

His works are also been taken by the extremist groups of this time and are taken out of context. They twist his verdicts and rulings to suit their whims and fancies. Hence, Ibn Taimiyya’s works are even read by Non Muslms and Orientalists and they are quite wary of his books. So it can be said that he is such a personality who is either tremendously loved by the Ahlus Sunnah Wal Jam’ah and also at the same time, hated by the Sufis, Rafidhis, Orientalists, etc since he stood out firmly against their heretical beliefs. This also clearly shows that his legacy will go on and will not be diminished, Insha Allah.

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Hence we have seen some of the contributions and some of his influences on the reform movements of this century. There are so many other contributions of his that it becomes to difficult to enumerate. May Allah grant Ibn Taymiyyah a generous reward for his efforts and sacrifices.

And Allah knows best.

 

Bibliography

 

http://islamqa.info/en/96323

http://www.muslimphilosophy.com/ip/rep/H039.htm

http://www.teachislam.com/dmdocuments/37/Ibn%20Taimiyyah.pdf

 

[1] Sunan Abi Dawood 4278