Answered by: Aalimah Siddiqa al-Farsiyyah
When I agreed to take on the letting agency they offered to let the property for a fixed amount of 1400GBP a month from which they deduct a letting fee of 13.2%.
As part of the discussions, we also agreed they include rent guarantee without any cost to me which means that should the tenants be unable to pay then this company will pay instead. Please note I do not pay any extra premium for this and it is funded by the agency within the letting fee they receive.
I did talk to a Mufti saheb and so proceeded with this arrangement but now that they will possibly pay me out I want to be comfortable it is not riba or gambling on my side. (please note I have moved abroad and lost contact with the mufti saheb hence question here)
I am aware conventional insurance is nateena and not permissible and have no issues with this. However, there are 2 things now:
1) I do not pay any premium towards this insurance
2) I did a request for the agency to include rent guarantee as part of the arrangement free of charge (though I did not fully understand the arrangement- i.e. attachment came later on).
Please, could you confirm for me where I stand with regards to this? Is it halal for me to receive the rent money from them instead of the tenants?
An insurance agreement is a mutual cooperation between two parties wherein the first party agrees to undertake the risk of other parties in exchange of premium and the other party promises to pay a fixed sum of money to the first party on the happening of an uncertain event within a specific duration. 1
Due to the clear uncertainty (gharar) which is present here, such an arrangement will be prohibited. If premium instalments were made, it would be regarded as a type of gambling (maisir) as it is also regarded as acquiring wealth on luck or by chance at the cost of others. Since you do you not pay any extra premium for the rent guarantee they provide, there is no chance of you harming from the premium payment, neither does the company harm since the agency funds on behalf of the tenet’s by deducting money from the letting free they receive, there is no uncertainty (gharar), nor is there any interest (riba) involved in this arrangement.
Since the tenants have assigned the agency to pay in cases where they are unable to pay, it will be permissible for you to receive the money from the company instead of the tenants.
And only Allah knows best
Answered by Aalimah Siddiqa al-Farsiyyah
Checked and approved Mufti Mohammed Tosir Miah
Darul Ifta Birmingham