All about ijarah and its detail related to docymentation

1. IJARAH

2. Introduction
 Literally:
  Ijarah came from the root word which means compensation or . It also means the sale of usufruct.
  Technically:
  A contract of proposed and known usufruct with a specified and lawful return or compensation
for the effort or work which has been expended.
  It is used to express the sale (bay‟) of a known benefit in return for its known equivalent.
  Usufruct:
  The usage of shelter for house, transportation for vehicles and others for a fee.
  Services:
  To work using physical energy or skills such as lifting goods, cleaning of office, writing, lecturing,
and others for a fee

3. NATURE OF AL-IJARAH
 Lease is a contract by which the owner of land, a building allows
another person to use it for a specific time, usually in return for a rent
 Al-Ijarah means a lease contract as well as a hire contract.
 Al-Ijarah, is also known as al-Kira‟. It is like someone who is selling to
someone else a right to benefit or as a payment for services with a
certain price to be paid for it.
 In the context of Islamic banking it is a lease contract under which
the bank or financial institution leases equipment or a building to one
of its clients against a fixed charge.

4. DIFFERENCES OF OPINION

5. Evidence from Quran

6. Evidence
 Hadith:
 “Give a servant his fee before his sweat dries up”
 (Al-Baihaqi)
 Reported by Ibn Abbas to the effect that Prophet (s.a.w) had himself
cupped and gave the person who cupped him his remuneration, if it is
prohibited he would not have paid him in the first place.
 Ijma‟:
 The ummah had came to a consensus during the time of companion
on permissibility of Ujrah since the need of people for usufruct is
similar to their need to physical good.

7. PILLARS OF AL-IJARAH
 1. Muajjir:
  A person who give
something for hire – Lessor,
landlord, owner etc.
 2. Musta‟jir:
  A person who takes on
hire – Lessee, tenant, renter
etc.
 3. Ma‟jur:
  A thing given for rent
 4. Al-Manfaah:
  The benefit from a thing –
usufruct, services etc.
 5. Ujrah:
  Price or fee given for the
payment of rent or lease
 6. Sighah:
  Offer (Ijab) and Acceptance
(Qabul)

8. Types of Ijarah

10. SUBJECT MATTER OF AL-IJARAH
 1. Since Ijarah is the sale of usufruct, majority of jurist forbid Ijarah on trees and grapevines, since
fruit are physical goods and Ijarah is the sale of usufruct and not physical goods.
 2. It is also not permissible to conduct Ijarah on animal for its milk; ghee, wool or offspring; water
in the river or well or canal since all these are goods, and not eligible to be under contract of
Ijarah.
 3. It is also not permitted to conduct ijarah on non-arable (not fit for cultivation) land which have
ponds for fishing, canes and wildlife for hunting since all these are goods. It is not legal to rent
pond or lake for fishing.
 4. Basic principle of Ijarah: every item that could be utilized with its original substance and
part consistently being conserved or preserved is allowed for Ijarah, and if not is not legal.

11. The conditions for Property
 1. The property must be belong to lessor
 2. The property is known to both parties and is specified
 3. The property can be acquired by the lessee for his use until the end of tenancy or
lease
 4. The property should be in a good condition possible for leasing
 5. It is the liability of the lessor to repair damages of the property in order to make
it possible for leasing
 6. It is the liability of the lessee to ensure the cleanliness and safety of the property

12. The conditions for Property
 7. The liability of the lessee over the property is under the concept of
trust (wadiah yadd amanah). However, in the case of damages due to
his negligence, the lessee is liable to pay the compensation (dhaman).
 8. The lessee cannot lease the property to another tenant and the
second contract is considered as illegitimate.
 9. The sale of a lease property is legitimate. However, the lessee has a
right to use the property until the lease contract has expired, where
the property will then be submitted to the buyer.
 10. The concept of al-Wadiah is applied when the lease contract has
expired and the lessee is still holding the property.

13. The conditions for Payment
 1. The amount of payment of rent must be known. If the
 payment is not in form of cash money, the goods in
 return must be specified its quantity, types and its
 characteristics.
 2. The payment of rent can be made in advance.
 3. If the condition for payment does not prescribed to be
 paid in advance, the payment begins when usufruct
 started.
 4. If the payment is made on daily, weekly or monthly
 basis, the payment should be made at the end of period
 unless otherwise stated on the agreement.
 5. If the property cannot be used the payment is not
 obliged upon the user.