Praise be to Allaah alone, peace and salutations be upon he whom there is no Prophet after him, our Prophet Muhammad, and his family and companions, as to proceed:

The Council of Major Scholars studied the subject of “Renting to Own” at its forty-ninth, fiftieth and fifty-first seminars. Based on multiple requests of a legal opinion received by the General Presidency for the departments of Knowledge based Researches and Islamic verdicts, it studied a number of prepared research papers on the subject by several researchers.

At its second session held in Riyadh, the date of 29/10/1420H, it resumed the study of the subject, and after research and discussion the board -in majority- felt that this contract is not legally permissible for the following reasons:

أولاً : أنه جامع بين عقدين على عين واحدة غير مستقر على أحدهما وهما مختلفان في الحكم متنافيان فيه ، فالبيع يوجب انتقال العين بمنافعها إلى المشتري ، وحينئذٍ لا يصح عقد الإجارة على المبيع ؛ لأنه ملك للمشتري ، والإجارة توجب انتقال منافع العين فقط إلى المستأجر ، والمبيع مضمون على المشتري بعينه ومنافعه ، فتلفه عليه عيناً ومنفعة ، فلا يرجع بشيء منهما على البائع ، والعين المستأجرة من ضمان مؤجرها ، فتلفها عليه عيناً ومنفعة ، إلا أن يحصل من المستأجر تعدٍ أو تفريط.

Firstly, it comprises of two transactions (i.e. rent and sale) on one commodity without abiding to either of the two (transactions), and they are different in their rulings, incompatible in them. For the sale (of a commodity, property etc.) obligates the transfer of the commodity and its use to the buyer, and at that point, to (again) rent the commodity is not valid, since it is owned by the buyer. Also, renting obligates the transfer of solely the use of the commodity to the one renting.

Additionally, the item being sold is under the guaranty of the buyer; the commodity, along with its use. (Therefore, if it is damaged), then the damage to commodity or its use are upon him (i.e. the buyer). Neither of the two return to the seller.

And the warranty of the commodity being rented is upon the owner. (Therefore, if it is damaged), then the damage to the commodity or its use are upon him, expect if there occurs violation or negligence on the part of the renter.

ثانياً : أن الأجرة تقدر سنوياً أو شهرياً بمقدار مقسط يستوفي به قيمة المعقود عليه ، يعده البائع أجرة من اجل أن يتوثق بحقه حيث لا يمكن للمشتري بيعه،

Secondly, the wage is determined annually or monthly in simplified amounts (in order) to attain the value of the commodity. This is considered by the seller to be rent, so that he proceeds in confidence with regards to his property. Since it is not possible for the one buying to sell it (while bound by this contract),

مثال ذلك : إذا كانت قيمة العين التي وقع عليها العقد خمسين ألف ريال ، وأجرتها شهرياً ألف ريال حسب المعتاد جعلت الأجرة ألفين ، وهي في الحقيقة قسط من الثمن حتى تبلغ القيمة المقدرة ، فإن أعسر بالقسط الأخير مثلاً سحبت منه بناء على أنه استوفى المنفعة ، ولا يخفى ما في هذا من الظلم والإلجاء إلى الاستدانة لإيفاء القسط الأخير.

An example of that: If the value of the commodity that was sold is fifty thousand riyals, and its monthly rent is one thousand riyals -under normal circumstances-, the rent will be made two thousand. And this (i.e. the extra thousand) in fact, is a portion of the price (of the commodity) until its estimated value is reached. Then if financial straits occur, with the final installment -for example-, the commodity is repossessed considering it was being rented and whatever he had paid will not be returned to him because he obtained benefit (from the commodity). It is obvious that this is injustice, and compels the (the buyer) into debt to fulfill the last installment.

ثالثا : أن هذا العقد وأمثاله أدى إلى تساهل الفقراء في الديون حتى أصبحت ذمم كثير منهم مشغولة منهكة ، وربما يؤدي إلى إفلاس بعض الدائنين لضباع حقوقهم في ذمم الفقراء. ويرى المجلس أن يسلك المتعاقدان طريقا صحيحا وهو أن يبيع الشيء ويرهنه على ثمنه ويحتاط لنفسه بالاحتفاظ بوثيقة العقد واستمارة السيارة ونحو ذلك

Thirdly, this contract, and its likes, has contributed to the indulging of the poor in borrowing (money), until many of them have become preoccupied with debt, (and) debilitated. Also, it may lead to the bankruptcy of some of the creditors, due to the loss of their wealth through the poor (who have borrowed from them). And the Council sees that the two (parties) carrying out the contract proceed in the correct manner. That is to sell an item and (then return) it as security (to the seller until) its value is fully paid. And he (the seller) takes precaution by retaining the record of the transaction and registration form of the vehicle and so on.

With Allaah is success and peace and salutations Prophet Muhammad and his family.

Senior Scholars:
Chairman of the Board:
▫Abdul-Aziz bin Abdullah bin Muhammad aal-Sheikh.
▫Saleh bin Muhammad al-Luhaydan.
▫Rashid bin Saleh bin Khunain.
▫Muhammad bin Ibrahim bin Jubair. Held a point of view contrary to this decision.
▫Abdullah bin Sulayman bin Manee’. Held a point of view contrary to this decision.
▫Abdullah bin Abdulrahman Ghadian.
▫Dr. Salih bin Fowzan al-fowzan.
▫Muhammad ibn Saalih al-Uthaymeen.
▫Abdullah bin Abdulrahman al-Bassam. Did not agree with the prohibition of the contract.
▫Nasser bin Hamad ar-Rashed.
Muhammad bin Abdullah as-Sabeel.
▫Dr. Abdullah bin Muhammad bin Ibrahim Al-Sheikh.
▫Muhammad bin Sulayman al-Bader.
▫Abdulrahman bin Hamza al-Marzouqi.
▫Dr. Abdullah bin Abdul-Muhsin al-Turki.
▫Muhammad bin Zayed aal-Sulayman.
▫Dr. Bakr Abu Zayd.
▫Hassan bin Jaafar al-Atami.
▫Dr. Abdul Wahab bin Ibrahim Abu Sulayman.
▫Dr. Saleh bin Abdulrahman al-Atrom. Did not attend to illness.

Verdict of the Council of Senior Scholars in the Kingdom of Saudi Arabia,

No. (198) Dated: 12/16/1420H.

Abu ‘Atiyah Mahmood bin Muhammad
25th/Jumaada al-Oola/1438H.