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Charging the tenant an extra fee for late payment

Answered as per Hanafi Fiqh by Muftionline.co.za

Q: We have business tenants who persistently don’t pay rentals on time. It appears they are in fact able to pay but deliberately withhold the money and instead utilise the money to effect early settlement with suppliers in order to get an early settlement discount.  In the case of such tenants, is it permissible to charge a late payment fee if the rental due is not paid on time?

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A: Charging the tenant an extra fee for late payment is not permissible. The extra amount charged is riba (interest).

And Allah Ta’ala (الله تعالى) knows best.

وَأَحَلَّ اللَّهُ الْبَيْعَ وَحَرَّمَ الرِّبَا (البقرة 275)

الربا هو الفضل المستحق لأحد المتعاقدين في المعاوضة الخالي عن عوض شرط فيه (هدايه 3/78)

Answered by:

Mufti Zakaria Makada

Checked & Approved:

Mufti Ebrahim Salejee (Isipingo Beach)

This answer was collected from MuftiOnline.co.za, where the questions have been answered by Mufti Zakaria Makada (Hafizahullah), who is currently a senior lecturer in the science of Hadith and Fiqh at Madrasah Ta’leemuddeen, Isipingo Beach, South Africa.

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