Q. Respected Mufti Sahib, I need to know that a landlord, who owns a House etc. αnd gave it for rent. During their stay there, the landlord gave the tenant whose renting their house etc. an increase oƒ 10% on the normal rent that they were paying . Eg. If the rent is R3000 αnd after a уear in December due to a 10% increase by owner of the building rent goes to R3350 . I need to know, is the R350 Riba (interest)?
A. It is permissible for a lessor to have a contract with the lessee to increase the rental amount according to a specific proportion after a specific period of time. Hence, it will be permissible for the lessor to have a contract with the lessee to increase the rental amount to 10% after one year.
In this case, the increase of 10 % after one year will not be considered as Riba (interest).
Allah Ta’ala Knows Best
Mufti Ismaeel Bassa
This answer was collected from TheMufti.com, which is a fatwa portal managed by Mufti Ismaeel Bassa from South Africa.