Leasing to a Bank or Insurance Company

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

There are differences of opinions among our Fuqaha in leasing ones property to a tenant who would use the property in sinful activities. According to Imam Abu Hanifaرحمه الله , it is permissible as the income is due to the usufruct of the property. The landlord is not responsible for the sinful activities of the tenant.

According to Imam Abu Yusuf and Imam Muhammad رحمهما الله, it is not permissible as that is assisting in sin which is prohibited in the Quran.

Allah Ta’ala says:

ولا تعاونوا على الإثم

      And do not assist in sin                           (5:2)

Our Akabir Muftis have considered the challenges of Muslims living in non-Muslim countries and granted leeway according to the opinion of Imam Abu Hanifah رحمة الله عليه .

Consider the following Fatawa with they summarized translation

1. (Fatawa Mahmudiya: 25/146-147, Maktaba Mahmudiya)

Question:

What is the ruling on renting out property to a bank? Note that there are two types of banks: 1) A bank in which most transactions are interest based, although other permissible transactions also take place in it. 2) A bank in which most transactions that take place are permissible, although some interest based transactions also take place in it.

Answer:

According to Imam Abu Hanifa رحمه الله renting out the property is permissible. What the tenant uses the property for is his act (and responsibility, not the landlord’s).

According to Sahibain (Imam Abu Yusuf and Imam Muhammad رحمهما الله), renting out one’s property for an impermissible act is makrooh and impermissible. If the act is mixed (i.e. the tenant will conduct both halal and haram activities in the property), then the majority will be taken into consideration (i.e. if the majority of the tenant’s activities will be permissible then renting out the property to him will be permissible and if the majority of the tenant’s activities will be impermissible then renting out the property to him will be impermissible). Therefore, renting out the property to the second type of bank (i.e. in which most transactions are permissible) is permissible unanimously. And renting out the property to the first type of bank (i.e. in which most transactions are impermissible) is permissible according to Imam Abu Hanifa رحمه الله – and this view is awsa’ (more accommodating) – whereas according to the Sahibain رحمهما الله it is makrooh and impermissible – and this view is awra’ (more precautionary).^{[ [i] ]}

2. (Imdaadul Ahkaam: 3/534-535, Maktaba Darul Ulum Karachi)

In the question above, Hazrat Maulana Zafar Ahmed sahib was asked about giving one’s property on rent for liquor brewery. The answer that Hazrat Maulana Zafar Ahmed sahib gave was that if the majority of the inhabitants of the locality are Muslims then doing so is not permissible unanimously. And if the majority of the inhabitants of the locality are non-Muslims then it is permissible according to Imam Abu Hanifa رحمه الله and not permissible according to the Sahibain رحمهما الله  and the other three Imams.^{[ [ii] ]}

3. (Azizul Fatawa: pg 637-638, Darul Isha’at)

In the question, Hazrat Mufti Azizur Rahman sahib was asked about giving one’s car on rent for transporting liquor and for transporting Hindu people to a temple. Mufti Azizur Rahman sahib responded by saying that the view of Imam Abu Hanifa رحمه الله in these matters is that of permissibility, whereas the view of the Sahibain رحمهما الله is that of impermissibility^{.[ [iii] ]}

Accordingly, there is a leeway to lease ones property to a bank. It should also be noted that not all the dealings of a bank are un-Islamic.

We advise against leasing ones property to an insurance company. [ [iv] ]

And Allah Ta’āla Knows Best

Aboobakr Siddeeq bin Mufti Amjad Mohammad

Student Darul Iftaa 

Azaadville, JHB, South Africa 

Checked and Approved by,
Mufti Ebrahim Desai.