Subject : Ruling on Lessor Paying a Sum to Lessee against Terminating Contract
Fatwa Number : 3720
Date : 18-07-2022
Classified : Leasing
Fatwa Type : Search Fatawaa

Question :

The contract duration of a rental car company is five years and based on this period the company determines the rent taking into consideration the type of the car itself, the decrease in its market value and other factors. If the rented car is brand new, its market value is high. For example, if the rental contract extends for one year, the rent is (500 euros) per month. If it is three years, the rent is (330 euros) per month. If the lessee wanted to terminate the latter form of contract (3 years) before it expires, the lessor accepts under the condition that the former pays the difference between the two forms of the contract above mentioned. In other words, the lessee pays a certain sum to the rental car company against termination of contract. On its part, the company says that this is better than obligating the lessee to pay the whole rent till the end of the contract`s period. The company adds that since it bought the car to be used by the lessee, it calculated its actual value and the decrease in that market value and this is the reason for setting a higher rent against a shorter period of rental contract. What is the ruling of Sharia on this along with mentioning textual evidence from Sharia sources?

The Answer :

Praise be to Allah the Lord of the Worlds. May His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.

In principle, Ijarah contract is binding and may not be terminated by the will of one party, so if both parties have agreed on terminating contract before it expires then this is permissible and the lessee is liable for paying the rent due for the whole period in which he had benefitted from the property. An-Nawawi {May Allah have mercy on him} said: "Once the lessee takes possession of the property, he becomes liable for paying its rent for the whole period of contract." {Menhaj At-Talibeen, Page: 163}.

Upon termination of contract, if the specified rent is divided over months, for example, the lessor and lessee agreed on leasing a car for three years; a certain sum for each month, then the lessee is liable for this specific sum without taking rent of similar properties into consideration. It is stated in {Hawashi Ash-Sharwani Ala Tohfat Al-Mohtaj Fi Shareh Al-Minhaj, Vol.6: P.187}: "If he divided the rent over months, then the lessee is liable for paying this specific sum without taking rent of similar properties into consideration."

In conclusion, it isn`t permissible for the lessee to terminate the Ijarah contract except with the approval of the lessor. If the latter approved of this, then he is entitled to receive the specified rent for the period in which the lessee had benefitted from the property, as agreed upon conclusion of contract, and he (Lessor) doesn`t have the right to demand the rent of similar property because the contract was terminated by mutual consent. However, he (Lessor) can obligate the lessee to complete the whole period of the contract. And Allah the Almighty knows best.



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