Question
I own a block of 10 shops all vacant at the moment. i have a client who wants to rent all my 10 shops for a certain amount. but his plan is to sublet it to 10 different businesses. Will this be permissible? If it is do we have to restrict him to what types of tenants he can let it to and who he cannot let it to? Also 3 of the 10 tenants are conventional banks will this be permissible?
Answer
In regards to subletting, it is permissible for the lessee to sublet the premises to tenants. However, the Fuqaha have stated that if the premises have been leased out at a stipulated rental (for example. R50 000.00) to the lessee, then he (i.e. lessee) cannot sublet the premises for a rental exceeding R50 000.00. In our case, the objective of the lessee is to acquire profit by subletting the shops at a higher rental than the rental that he is required to pay. In such a case, the lessee should attach some fixture and fittings to the premises which will then make it permissible for him to acquire a higher rental for the premises.
Fortunately, you have been informed of the intentions of the potential lessee that intends hiring your premises (and subletting it thereafter). We are sure that you are fully aware that conventional banks derive majority of their income from interest based transactions which is Haraam in Shariah.
Similarly, funds accrued from the sale of alcohol are totally prohibited in Shariah as well. We therefore suggest that you attach such a clause in your lease agreement that will outline which type of businesses will not be acceptable as tenants to you.
We have mentioned a general principle hereunder that will assist you in determining whether it is acceptable to accommodate a particular type of business as a tenant or not, which is as follows: If more than 50% of the income derived from any business is from Halaal (permissible) transactions/sales then such a tenant is acceptable as a tenant, otherwise not.
Checked and Approved By:
Mufti Muhammed Saeed Motara Saheb D.B.