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Fatwa CenterRenting as a business
Question
If a person owns a house and rents it, is the money received, Halal or Haram? Is renting as a business allowed in Islam?
Answer
Praise be to Allah, the Lord of the Worlds; and blessings and peace be upon our Prophet Muhammad and upon all his Family and Companions.
If a person earns his money through legal means of earning then this money is Halal (permissible). There is no rule, which prohibits all kinds of easy money.
The money received through gifts, inheritance and through compensation contracts is easy money but it is not Haram (forbidden).
All the Muslim jurists agree that rent contract is amongst the legal contracts if it meets all the conditions which are compulsory for its validity. The compulsory conditions for the validity of a rent contract are as following:
1. Both parties should know the benefit and advantage of the rented object.
2. The period of rent should be defined.
3. There should be an advanced agreement on the amount of rent.
4. The rented object should not be used in any forbidden purpose.
Ibn al-Munzir said: 'Rent contract is a legal and effective contract as proved in Shariah. All the jurists agree that rent contract is permissible and that renting a house to another person is permissible provided the house rent and the period of rent are known to both parties'.
Allah knows best.
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