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Paw-broking (al-rahn or real security)
Date 22 October 2018 & Clock 09:33

Question 18: In answer to the question whether or not complete paw-broking (al-rahn or real security) and leasing are allowed, many have prohibited full pawn-broking. They say that the contract should be based on a lease with the condition of a loan. Since the individuals do not really intend to give a loan and they resort to such a contract only to get rid of riba (interest) with neither of them meaning to take a loan and give it while the contract is concluded under the title "lease" or "compromise" while both sides allow each other to use the property for a fixed period of time (for example, A (owner of the real estate) allows B (the other person) to use the benefit and he (b) also allows the other side (a) to use his property), is there any religious prohibition in such a contract?

Answer 18: Intention is required in all contracts, the conditions in them and in all the specific features involved, otherwise they (contracts) would not be valid.

As per your explanation, there is no binding condition in ebaha (permission to use a property) to make adherence obligatory because the person who gives such a permission can prevent the other side from using his property at anytime he wants whereas in a lease (ejarah) contract, the two sides seek to transfer the ownership of the property to the other side in such a manner that it is binding for both sides.

Ebaha has no meaning with respect to the properties which remain intact but whose benefits are used and it is also problematic about money.

Ebaha vis-à-vis transferring the ownership of the property in a loan form is problematic as it involves interest but if they make musaleha (compromise) in which the house owner uses the money in exchange for the house with both sides consenting to it, apparently it would be valid and there would be no objection to it.

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