Rent to-own contracts

Answered according to Shafi'i Fiqh by

Question: Are rent-to-own contracts permissible? Are late fees permissible?


Dear questioner,

Yes, under certain conditions, rent-to-own contracts are in principle permissible. Still, it would be best if you had the specifics of the contract verified by a mufti or third-party Islamic finance auditor first. (AAOIFI Standards, 2017, Standard No. (9), 8/1-8)

Late fees are also permissible if the fees are paid to a charity. (AAOIFI Standards, 2017, Standard No. (9), 6/4)

I pray this helps.

[Ustadh] Farid

Checked and Approved by Shaykh Faraz Rabbani

Ustadh Farid Dingle has completed extensive years of study in the sciences of the Arabic language and the various Islamic Sciences. During his studies, he also earned a CIFE Certificate in Islamic Finance. Over the years he has developed a masterful ability to craft lessons that help non-Arabic speakers gain a deep understanding of the language. He currently teaches courses in the Arabic Language


This answer was collected from It’s an online learning platform overseen by Sheikh Faraz Rabbani. All courses are free. They also have in-person classes in Canada.

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