Ijarah is an Islamic lease agreement where one party (the lessor) leases an asset to another party (the lessee) in exchange for a rental payment. There are basic principles that govern ijarah, including pillars like offer and acceptance between the two parties, a specified rental payment, and a clearly defined leased asset. Ijarah agreements must also comply with Sharia rules regarding timely payment of wages, responsibilities of parties, and termination conditions. Key issues in structuring ijarah include ensuring rental payments are not interest-based and addressing insurance, maintenance, ownership registration, and compliance oversight by a Sharia board.

1. IJARAH
NURULHUDA BINTI ISMAIL
NORASMANIZA BINTI SAMAT
NURHIDAYU BINTI ABDUL RAHIM
NURAFIYA BINTI ABDULLA
NURUL ATIKA BINTI MOHD ANUAR

2. Content
 Definition
 Basic principles
 Pillars & condition
 Rules in hiring
 Law of Ijarah
 Payment of wages & rents
 Responsibility salary & wages
 Goods renting a rental
 Termination of Ijarah
 Ijarah return
 Syari’ah rules
 Illustration
 Party involve
 Key issues
 Rental payment based on interest
 Penalty interest default
 Insurance and maintenance issue
 Shari‟a board issue
 Registration of ownership
 Master agreement

3. Definition
 Istilah-
 it means 'to give something on rent'.
 the term 'Ijarah' is used for two different situations
I. relates to the usufructs of assets and properties
II. Services of human beings

4.  Ulama Hanafiyah :
 ‘aqdun ‘alal manaafi’i bi ‘audhin,”
 Ulama Syafi’iyah :
 “Akad of the benefit that contain a particular purpose
and able to receive a replacement or certain
substitute”
 (Muhammad asy-Syarbini, Mughni al-Muhtaj, Juz 2, hal.
332)
 Ulama Malikiyah
 “Menjadikan milik suatu kemanfaatan yang mubah
dalam waktu tertentu dengan pengganti”.

5. Basic Principles: Pillars & Condition
 Mu’jir & musta’jir :-
 Ulama hanafiah
 aqid can think rationally and mumaiyyiz
 Ulama malikiyah
 baligh and should ask permitted from parents
 Ulama hanabilah dan syafi‟iyah
 aqid should mukallaf

6.  Ijab kabul
 Ujrah (payment)
 payment in terms fixed asset know by
both parties
 payment that same as Ma‟qud „alaih is not
allowed
 pay according the agreement

7.  Ma’qud ‘alaih (object/benefit)
 Objects is possession by lessor
 Given after akad
 Objects specification must be clearly stated
 Stated of duration of utilization
 Utilization ijarah objects should be not
forbidden by shariah
 No reject objects

8.  return the object ijarah if unable to pay rent
 maintain and use the appropriate object in
the agreed ijarah
 not sublease and / or transfer ijarah object
to other parties

9. Basic Principles: Rules In Hiring
o Explaination types of jobs
o Explanation about work hour
o Can‟t rent other person to do his/her compulsory
task
o No discrimination/ make use the workers

10. Basic Principles: Law Of Ijarah
 Lease law
 Wage-hiring law

11. Basic Principles: Payment Of Wages & Rents
 The right to receive wages musta'jir is as follows:
 "Give the employee the wages before the sweat dries."
(Narrated by Ibn Majah)
 If renting goods, money paid when the contract hire
rental happen

12. Basic Principles: Responsibility of the
Employees
 Maliki
 When the nature of the job imprint on goods any damage is
the responsibility of the employee.
 Abu Yusuf & Muhammad bin Hasan asy-Syaibani
 Worker was partially responsible for the damage, whether
intentional or not unless there is something beyond boundary
occur.
 Imam Abu Hanifah dan Syafi‟I
 If the damage was not due to foul play and negligence of the
employee's compensation is not required.

13. Basic Principles: Goods Renting A Rental
(menyewakan barang sewaan)
 Musta'jir enabled sublease rental items to others in terms
of use of the goods in accordance with the use of the
promised when the contract.

14. Basic Principles: Termination Of Ijarah
 Ijarah be fasakh (void) if there is the following:
 The occurrence of defects in the leased goods that occurs on
the hands musta'jir
 The destruction of the leased item
 Damaged goods is renting back (ma'jur alaih)
 The expiration of the prescribed period and the completion of
the work

15. Basic Principles: Ijarah Return
 If ijarah has ended, musta'jir need to return the rental
items.
 If can be transferred, it must hand over to the owner and
if the form of rental is' iqar (fixed).

16. Party Involve
 Two parties involve in Ijara :
 A lessor(the owner of the leased asset)
 A lessee(the party who reaps the services of the leased asset)
 Ownership right
 Ownership liabilities & usage liabilities
 Leased asset as a trust
 Impairment lost not cost by the lessee
 Operation maintenance
 Can‟t transfer to third party without permission from lessor

17. Illustration
3. The bank gives lease of machinery /
equipment to the customer at an agreed
monthly price for a specified period
4. the customer pays a
monthly lease
Bank Customer
5. The customer returns the
machine / equipment at the
expiration date. 1. Identify the
2. The bank buy
machine/ goods.
the equipment
from the dealer
Machine/ equipment

18. Syari’a Rules In Ijarah
• And said one of them (the two women): "O my father!
Hire him! Verily, the best of men for you to hire is the
strong, the trustworthy”.
• The Prophet (SAW) said: "Pay the hired worker his wages
before his sweat dries off". (Sunan Ibn Majah)

19. Syari’a Rules In Ijarah
• The Prophet (SAW) is reported to have said: "He who
hires a person should inform him of his fee.” (Al-Sunan
Al-Kubra li Al-Baihaqi)
• Abdullah ibn Umar narrates, “Allah's Apostle gave the
land of Khaibar to the Jews to work on and cultivate and
take half of its yield.” Ibn 'Umar added, "The land was
used to be rented for a certain portion (of its yield)."
(Sahih Al-Bukhari)

20. Syari’a Rules In Ijarah
• The Prophet (SAW) is reported to have said: "He who
hires a person should inform him of his fee.” (Al-Sunan
Al-Kubra li Al-Baihaqi)
• Abdullah ibn Umar narrates, “Allah's Apostle gave the
land of Khaibar to the Jews to work on and cultivate and
take half of its yield.” Ibn 'Umar added, "The land was
used to be rented for a certain portion (of its yield)."
(Sahih Al-Bukhari)

21. Key Issue: Rental Payment Based On
Interest
 Lease rental could not be directly expressed by
referrence to interest rates
 In leasing transactions the lessor is providing an asset
 In an Ijara lease the amount and timing of the lease
payments should be agreed in advance

22. Key Issue: Penalty Interest Default
 Western conventional leases- provide for default interest
on late payment
 Islamic leases- providing some form of discount formula
Key Issue: Insurance and maintenance
issue
 In an Ijara lease the responsibility for maintaining and insuring
the leased asset remains that of the lessor throughout
 Maintenance obligations

23. Key Issue: Shari’a Board Issue
 Role of the shari‟a board
 To monitor the workings of the Islamic financing institution

24. Key Issue: Registration of ownership
 Leased asset is registered in the name of lessor
 If there are barriers, maybe registered in the name of the
leassee
Key Issue: Master agreement
 This agreement detailing the term & condition
 Master agreement is considered as wa‟d (promise)