Question
I am a member of a syndicate that has built houses for rental purposes.
To attract tenants the management has advertised rental at R 7300 pm. Amongst the T&C is a clause that provides for R 1000 discount if the rent is paid in before or on the 5th of every month.
Is this “discount” sharia compliant? Does it not create an uncertainty in the contract in that the amount may vary from month to month tenant to tenant (although this “discount”) is applicable to present and new tenants?
Answer
In the queried scenario, the lessee is afforded with two options; either paying the rental by the 5th of the month or delaying the rental to a later stage beyond the 5th of the month. The rates will differ depending on the option selected by the lessee.
In a lease agreement, the rental has to be fixed, with no form of ambiguity whatsoever. This means that the lessee should, at the very outset (at the time of the contract) choose one of the two options afforded to him; that either he will pay the rental by the 5th of every month or after the 5th of the month. By choosing to pay the rental by the 5th of the month, the lessee will qualify for the discount and the rental will be fixed at R7300.00 less R1000.00 which is R6300.00. On the contrary, if he chooses to pay after the 5th then the lessee’s rental will be fixed at R7300.00 and the discount falls away. One of the two options should be selected at the time of entering the lease agreement.
Now, if the lessee has chosen the option of paying the rental by the 5th and due to some reason defaults in payment, he cannot be penalized in any way nor can the rental that was fixed at R6300.00 be increased to R7300.00 for that particular month, as this will be tantamount to Riba (interest) which is obviously Haraam.
In conclusion, the clause (offering the abovementioned options) in the lease agreement creates some form of ambiguity and uncertainty by leaving the lessee with two options to select from, which is incorrect and renders the hiring contract as faasid/corrupt. This ambiguity may be removed by fixing one of the options (provided by the lessor) on signing the lease agreement.
Another way of overcoming the problem is as follows, all tenants are charged a standard and fixed rental at R7300.00 per month. Thereafter, if the lessor wishes, he may voluntarily reward those tenants that pay the rental by the 5th of the month with a rebate/refund of R1000.00. In this way, the rental is in no way left unclear whilst the discount is purely regarded as a gift.
Checked and Approved By:
Mufti Muhammed Saeed Motara Saheb D.B.