Salam Alekum,
I have been trying to inquire regarding the Ijara CDC Contract used in Canada for home financing, however, it has been more than a month and I have sent a copy of the contract twice but still awaiting a response. While I fully understand that the contract is a lenghty legal document but any update would be much appreciated.
Now, I have uploaded the contract documents at the following site for a review:
And
It would be greatly appreciated if you could provide your opinion if these contracts are Sharia compliant
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
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DISCLAIMER:
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Respected Brother in Islam
The document in reference is lengthy and required time to study and analyse. In the meantime, we had to attend numerous other queries.
Nevertheless, we have studied the contracts in reference and also the relevant information on Ijara CDC website. The following is our understanding of the product:
- Ijara CDC forms a trust that acquires a property through a mortgage
- The property is leased to the client on “lease to own” agreement whereby the lessee makes monthly payments to the trust and promises to buy the leased property at the end of the lease period
- The trust makes payments to the lender
- The rights of a regular house owner is transferred to the client
- The asset remains under the risk of the lessee and in the event of any loss or damage the lessee will suffer
- Likewise, if the lessee wishes to sell the house for a profit, he may sell it and keep the profit
- At the end of the lease period, the title is transferred to the lessee for a fee of $1.00[1] [2]
Shariah Ruling:
After studying the Ijara CDC model and analysing the documents, it is our submission that Ijara CDC is not Shariah Compliant. It contravenes the Laws of Shariah for the following reasons:
1. Ijara CDC acquires the property through a conventional mortgage.
2. Ijara CDC’s customer [lessee] signs an agreement that cancels the sharing of any loss by the Ijara provider. This agreement is contrary to the Shariah Laws of Leasing.
In leasing, the asset remains under the risk and ownership of the lessor throughout the leasing period. The lessee will be held liable, if he misuses the property or for his negligence. He cannot be made liable for factors that are beyond his control.
3. When a property is leased even if it is a “lease to own” agreement, the asset is owned by the lessor and not the lessee. Transferring the rights of a regular house owner to the client during the lease period and compelling him to pay for the losses is impermissible.
4. Bilateral promise.
In conclusion, Ijara CDC is not Shariah Compliant. [1] [2] [3] [4]
And Allah Ta’āla Knows Best
Anas Sharieff Qasmi.
Student Darul Iftaa
Hyderabad, India.
Checked and Approved by,
Mufti Ebrahim Desai.
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[1]الجوهرة النيرة على مختصر القدوري (1/ 212)
وقال ابن مسعود «آكل الربا وموكله وكاتبه وشاهده إذا علموا به ملعونون على لسان محمد – صلى الله عليه وسلم – إلى يوم القيامة» كذا في النهاية.
تبيين الحقائق شرح كنز الدقائق وحاشية الشلبي (4/ 85)
وأما السنة فما روي عن ابن مسعود أن النبي – صلى الله عليه وسلم – «لعن آكل الربا وموكله وشاهديه وكاتبه» رواه أبو داود وأحمد والترمذي
[2]الفتاوى الهندية – ط. دار الفكر (4/ 413)
غرقت الأرض المستأجرة أو انقطع عنها الشرب أو مرض العبد أو أبق سقطت الأجرة بقدر ذلك كذا في محيط السرخسي
عمدة الرعاية بتحشية شرح الوقاية (9/ 66)
وتسقطُ[(1)] بالغصبِ بقدرِ فوتِ تمكُّنِه
قوله: بقدر فوت تمكنه؛ حتى إذا فات تمكُّنه في جميعِ المدَّةِ سقطَ جميعُ الأجر، وإن فاتَ في بعضِها سقطَ بحسابه، فإن عرضَ في المدَّةِ ما يمنعُ الانتفاع كما إذا غصبتُ الدار من المستأجر إذا غرقت الأرضُ المستأجرة، أو انقطعَ عنها الشرب، أو مرض العبد، أو أبقَ سقطت الأجرةُ بقدر ذلك. صرَّحَ به في ((المحيط))، وغيره.
[3] IJARAH; AN INTRODUCTION TO ISLAMIC FINANCE[pg;157]
[4] Shariah Standard No (9): Ijarah and Ijarah Muntahia Bittamleek AAOIFI
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