Peace and Mercy of Allah be with you and your family. dear Brothers, my close freind borrow a money from me and he put his house as a collateral and he left his house to me. my question is this: am i permitted in Islam to stay in that house and pay the owner small amount as rent knowing that even e very small amount he will accept? Allah bless you all.

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His Slave and Messenger.

It is not permissible for you to benefit from that house in the manner that you mentioned in the question as it is a loan that draws benefit. For more benefit, please refer to Fatwa 90508.

However, if you pay the owner the rent of a house similar to it, then the Hanbali School of jurisprudence permitted this and they provided evidence that this is not benefitting from the loan but it is benefitting from the rental contract.

Nonetheless, the majority of the scholars forbade it and it is better in order to be on the safe side to act according to the view of the majority of the scholars.

Allaah Knows best.