Due to the current global financial crisis there is increasing interest in the Islamic Economic System, the most comprehensive book on this topic is 'The Economic System of Islam' by Sheikh Taqiuddin an-Nabhani. However as people have many questions relating to the Islamic rules of trade we will be posting related extracts from the draft translation of the Fiqh masterpiece 'The Islamic Personality, Volume 2' by Sheikh Taqiuddin an-Nabhani.
If the contract was concluded on the benefits of things like hiring houses, animals, cars and the like, then that which is convened on is the benefit of the thing, and estimating of the equivalent wage inevitably requires looking to the thing whose benefit equals the benefit of the hired thing. Whenever hiring of the thing is completed, then the lessee can receive the benefit of the thing which he leased; so if he rented a house, he can reside therein, and if it were an animal or car, then he can ride it. The lessee can rent the hired thing once he possessed it at the same (amount) he hired it or for more or less.
This is because taking possession of the hired thing is equivalent to taking possession of the benefit, with the evidence that he is allowed to dispose of it, so he is allowed to contract it, and because it is a contract permitted with the capital, so it is allowed with increase or decrease. However, if he hires the thing for the benefit he can receive the equivalent to that benefit or less in case of harm, but he has no right to receive more than the equivalent of that benefit. This is because it is not permitted for him to receive more than his right or other than what he deserves. If he hires an animal to ride it, it is not permitted for him to load a burden upon it because riding is lighter than loading. If he hires a car for a certain distance, it is not permitted for him to ride it for a distance longer than that which he hired it for. If he hired a house to live in, he is not allowed to make it a storehouse for wood, iron or the like which is of greater harm to the house than accommodation.
In short, if the contract was concluded on the thing for a recompense then it is a sale, and if it was concluded on the benefit of the thing for a recompense, then it is hiring. Accordingly the contract can be concluded upon the thing alone like selling a tree with produce whose goodness has appeared without selling its produce. It could also be concluded on the thing with its benefit like selling a house. It could be concluded on the produce alone like selling produce whose goodness has appeared, and it could be concluded on non physical/tangible benefit like living in a house. If it was concluded on a benefit which is not considered a thing, it is hiring not a sale. Just as the buyer of the thing owns the thing and disposes of it in all forms, the hirer of the thing owns the benefit which he possessed by hiring and he can dispose of it in all forms once he took possession of it. Just as the purchaser of the trees of produce, once its goodness appeared he has the right to sell it while it is on its trees, the hirer of the thing has the right to lease/rent it because he owns its benefit the same way as the purchaser of the produce owns the produce which he purchased.
Accordingly, the hirer is allowed to rent/lease the hired thing once he received/took possession of it. This is because taking possession of the thing when it is hired is equivalent to taking possession of the benefits, with the evidence that he is permitted to dispose of it, so the contract over it is permitted like selling the produce on its tree. Whenever the hiring of the thing is completed and he took possession of its benefit, the hirer possesses all of the Shar’ai dispositions in the benefit of the thing which he hired because it is his ownership. So he can hire it at the wage he considers, whatever (amount) it reaches. So if he hired it for 50 and then leased/rented (to someone) for 500, it is permitted, because he owns the benefit so he owns (the right to) rent it (to someone) according to what he considers not according to what he hired it for. Hence what is called as (khulow) for storehouses, houses and others—which is paying a specific amount of money on top of the estimated rent of the house or storehouse to the first tenant from the one who wants to hire it from him—is permitted and there is nothing (wrong) in it because the tenant can rent the house or storehouse which is his lease to another tenant for the estimated rent together with an extra amount he pays for him; and this is renting of the thing he rented with extra amount over the rent by which he rented it. This is a permitted matter because it is permitted for him to rent out what he rented for more or less (rent) than he rented it, because it is a contract permitted with the capital, so it is permitted with increase, like selling the purchased good after he takes possession of it for more than he bought it with.
Herein is a question of handing the hired thing to the owner after the end of the contract: Is it obligatory or not?
The response upon that is that returning the hired thing is obligatory upon him if the hired thing is in his possession due to what Ahmad narrated from Sumra from the Prophet (SAW) who said:
“It is duty upon the hand (possessor) what it took until it hands it over .”
Whereas if the hired thing is not in his possession, then it is looked into. If it were seized by force from him, it is duty upon the one who seized it by force to return the hired thing to its owner and not upon the one who hired, since the one who seized is the one commanded to return the thing.
Ahmad has narrated from As-Saib bin Yazid from his father who said: The Messenger of Allah (SAW) said:
“One of you should not take the furniture of his friend whether seriously or playfully. If anyone of you took the stick of his friend, he should return it to him.”
This is general whether he took it from its owner or from someone else. However, if he lent the rented thing to someone else or rented it to him, then after the end of the contract between him and the owner of the property, he is obliged to deliver the hired thing to its owner.
That is due to the generality of the hadith:
“It is duty upon the hand what it took until it returned it/handed it over” and there did not come another text in hiring or otherwise excluding it, as it came in seizing by force (usurping).
Therefore it remains general regarding the statement “until he returned it/delivered it.”
It is not true to say that the hadith also covers the second tenant because his hand took over so it is obliged upon him to return it, thus he is the one responsible for returning it. This is not true because the hadith, even if it applies upon the second tenant, does not annul returning of the hired thing from the first tenant. So it is duty upon the first tenant to return the hired thing to its owner, and it is duty upon the second tenant to restore the hired thing to the first tenant.
The obligation of returning it upon the first tenant does not annul returning it upon the second tenant.
Similarly the obligation of returning it upon the second tenant does not annul returning it upon the first tenant. However, the owner pursues the one whom he rented and handed the thing to him i.e. the first tenant. Accordingly if a person rented a house to another then the tenant rented it to someone else for a greater rent i.e. he took what they call the (kulow rijl) then once the renting period for the first tenant ended the contract ended, and it becomes obligatory upon him to deliver the house to its owner, unless if its owner renewed the contract with him, so it remains under his authority, even if not under his possession. Or its owner made contract with the second tenant, and considered himself to have received the house. In that case the first tenant is acquitted from the responsibility of delivering the house and it is considered that he delivered it to its owner and the owner’s relationship became with the second tenant.