Penalising A Tenant For Late Or Non-Payment Of A Rental Amount

If the tenant hasn’t paid the rental by the stipulated date, then he has certainly contravened. However, in terms of Shariah the lessor cannot penalise the tenant by imposing some sort of monetary penalty as this is tantamount to Riba (interest). The lessor is only entitled to collect the rental that is due to them. One way to avoid such a problem (in future) is by getting all tenants to sign a direct debit form when leasing the premises so that the rentals are automatically transferred into the lessor’s account without any form of hassle. In a case where a tenant is continuously defaulting in payment of rental on time, the lessor may cancel the contract.

وليس لاحد الطرفين فسخها بلا عذر (مادة ٤٠٦ مجلة)

If the tenant is in arrears and has no intention of paying the outstanding rentals then a Muslim judge should be approached (if one is living in a Muslim state) who will then imprison the debtor and ensure that the debt is paid from the debtor’s personal wealth. However, the Muslim judge cannot sell the debtor’s land and personal belongings to offset the outstanding debt. If the debtor says that he will sell his goods and pay the debts then the Muslim judge will give him three days to sort out his affairs.

In our scenario, we do not have access to a Muslim judge or an Islamic court due to living in a non-Muslim country. We should therefore try to resolve the issue by using the services provided by an Ulamaa body or any of the Darul Iftas in our country when having a Muslim as a tenant. If the Muslim tenant then too does not comply or in the case of the tenant being a non-Muslim, one may proceed with legal action as a final resort to recoup all outstanding rentals.

The Fuqaha have also stated that if the debtor refuses to pay the creditor and neither is the creditor able to take the legal route due to some obstacle and the creditor is in possession of or has access to the debtor’s funds (whether in the form deposits paid to secure the flat or otherwise), the creditor may withhold and take such funds in lieu of the outstanding debts or rentals (as in our scenario).