fiqh for finance

1. The Concept of Ownership in
Islamic Perspective
Fiqh for finance
Chapter three

2. 2
Outline.
1) DEFINITION
2) ELIGIBILITY OF OWNERSHIP
3) TYPES OF OWNERSHIP
4) REMOVABLE OF OWNERSHIP

3. 3
Ownership (al-milkiyyah)
Definition
• “Mulk” is a thing of which
men/women has become
the owner, whether it be
the things themselves
(A‟yan) or whether it be
the use of a thing (Menafi).
• A‟yan refers to a thing
is physical in nature which
is fixed and individually
tangible.
• Menafi‟ refers to
or usufruct.‫ء‬
According to Dr.
Wahbah, ‘ownership is
an exclusive association
of the owned item with
its owner, which gives
the owner right to deal
what he owns in any way
way that is not legally
forbidden’)
Jurist opinions;
• Hanafi – usufruct is
owned items, but
they are not consider
as property
• Majority – usufruct is
considered as
property as long as it
does not contradict
the Shariah.

4. Ownership
Ownership …
 A person would become an
owner by the legal acquisition
of a thing, which subsequently
becomes property, and enjoys
this ownership in exclusivity
 As the owner (subordinate to
ownership by Allah s.w.t.), a
person may use or deal in the
property in any way whatsoever
he wishes or desires; legal
obstacle (e.g. capacity of the
person) may restrict this
freedom.
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5. 5
Types of Ownership
• Legal and beneficial ownership
• The owner enjoys legal right and benefits
of the property
• Example: Ali owns a house and lives in it.
Total Ownership
(Milk at-tam)
• Legal ownership without beneficial
ownership or vice versa.
• Example: Ali owns the house but a tenant
uses the benefits of the house
Partial
Ownership
(Milk an-naqis)

6. Partial ownership
There are 2 types of partial ownership:
 Legal ownership or ownership of the property alone:
an owner has given the ownership of usufruct to
another person for a specified period of time.
 Usufruct ownership: There are 5 ways of establishing
ownership of usufruct, which are (1) a lease; (2) a
loan; (3) a waqf (4) a leave in one's will; and (5) a
permission.
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7. Eligibility for Ownership
Properties that are ineligible for
ownership –public usage (road,
bridges, railways, rivers)
Properties that can only be owned
through legal means (national forest,
waqf property)
Properties that are unconditionally
eligible for ownership (house, land,
car)
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8. Establishing total ownership
There are 4 ways permitted in Islam of establishing total
ownership:
• 1) Claiming commonly accessible property.
• 2) Contracts.
• 3) Succession.
• 4) Derivation from owned property.
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9. Commonly accessible property
 This refers to property that initially is ownerless and is eligible for ownership (e.g.
water in its spring, trees and tree-wood in ownerless land, wild animals, and fish
in the sea)
 There are two main ways of claiming such property:
1) Any way which means of establishing ownership of that which is previously
ownerless.
2) Physical possession without the need for language; any individual (regardless of
capacity to contract) may acquire ownership.
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10. Feature of acquiring previously ownerless property:
1) Land repair.
2) Hunting.
3) Mining.
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11. • There are two conditions for claiming previously ownerless
property:
1) No other Muslim has owned that property; Hadith – “Whoever
possesses a property that no Muslim possessed before, it is thus his.”;
2) Possession must be taken with the intent of acquiring ownership;
therefore unintentional ownership (e.g. a bird becomes trapped in his
property) does not result in ownership; legal maxim – “Affairs are
judged based on intent.”
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12. 2. Contracts
• This refers to the transferring of ownerships
through contracts.
• This is the most important and commonly used
means of establishing ownership (e.g. sales, gifts,
wills, etc).
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13. 3.Succession
• There are two ways for succession ownership to occur:
1) Inheritance (al-irth) –when a person dies, the ownership of his
properties is transferred to his heirs with several conditions;
 The funeral cost has been paid.
 The claims and debt has been settled.
 The will has been executed.
 Legal heirs base on Islamic law.
 The lawful property.
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14. 2) Compensation (al-tadmin) -for destroyed,
or adversely affected property – this category
includes compensations for crimes.
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15. 4. Derivation from owned property
 This is where the owner of a property
automatically acquires ownership of all new
properties derived from it.
– Either caused by the owner’s actions or by
natural causes.
 Expansion of property; Output/profit/growth.
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16. 16
Removable of Ownership_Complete
Ownership
Situation where the ownership could be legally removed
in Islamic Law:
1) Use of as-Shufah (pre-emption right).
2) The removable of ownership for debt settlement.
3) The removable of private ownership for public
interest.

17. Removable of ownership_incomplete
ownership
1) Finished the agreement/use period
2) Damaged or malformation
3) The death of person that used it’s benefit
4) Transfer of ownership
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18. 18
Thank you & wassalam