Islamic Law of Transaction: Leases and Ownership of Usufruct

1. What Is a Lease?

A lease (ijarah) is a contract where the owner of property gives another person the right to use and benefit from that property in exchange for payment.

The payment is called:

• rent when property is leased, or
• wages when services are hired.

Example

Ali owns an apartment.

He rents it to Ahmad for one year for RM2,000 per month.

So:

Ali → owns the apartment

Ahmad → owns the apartment’s usufruct for one year

RM2,000 per month → rent

2. What Does the Lessee Own?

The lessee is the person who rents the property.

The lessor is the owner who rents the property out.

Under a lease, the lessee does not become owner of the physical property.

Instead, he receives:

ownership of the usufruct in exchange for rent.

Example

Ali rents his car to Ahmad for one month.

During that month:

Ali → owns the physical car

Ahmad → owns the right to use the car

So Ahmad owns:

the benefit

not:

the car itself

3. Why Is a Lease Different From a Simple Loan?

A simple loan gives use without payment.

A lease gives use in exchange for payment.

So:

Simple Loan

Usufruct without compensation

Lease

Usufruct with compensation

Example

Ali lets Ahmad use his bicycle for free.

→ Simple loan

Ali lets Ahmad use his bicycle for RM100.

→ Lease

4. What Can the Lessee Do With the Usufruct?

Because the lessee owns the usufruct, he may:

1. Use the property himself

OR

2. Allow another person to use it

OR

3. Transfer the usufruct to another person for payment

This may include:

Subleasing

A sublease means that the original tenant rents the property to another person.

5. Example: Lessee Uses the Property Himself

Ali rents a house to Ahmad for one year.

Ahmad lives in the house himself.

This is straightforward.

So:

Ali → property

Ahmad → usufruct

↓

Ahmad personally uses the benefit

6. Example: Another Person Uses the Property for Free

Suppose Ahmad rents the house from Ali.

Ahmad allows his brother Yusuf to stay in the house without charging him.

Ahmad is allowing another person to enjoy the usufruct.

This may be allowed if the new user’s use does not create a different type or greater level of use.

7. Example: Sublease for Payment

Suppose Ahmad rents an apartment from Ali for RM2,000 per month.

Ahmad then rents that same apartment to Yusuf.

This is a:

Sublease

So:

Ali → owner

↓

leases to

↓

Ahmad → lessee and owner of usufruct

↓

subleases to

↓

Yusuf → new user

8. The Important Rule: Does Usage Change With Different Users?

This is the most important part of the passage.

The lessee may allow another person to use the property if:

the type and level of use are basically the same regardless of who uses it.

If the use is the same:

lessor’s permission is not necessary according to the rule stated in the passage

But if the use changes depending on the user:

lessor’s permission is necessary

9. What Does “Usage Does Not Vary With Different Users” Mean?

It means the property will be used in roughly the same way and exposed to roughly the same level of wear or risk.

Example

Ali leases an apartment to Ahmad for normal residential use.

Ahmad subleases it to Yusuf, who also uses it as a normal residence.

The use is basically:

residential use → residential use

So the property is not being exposed to a substantially different kind of use.

According to the passage:

the lessee may sublease in this situation even if the lessor said he did not want him to.

This rule applies where the use truly does not differ depending on the person.

10. Why Can the Lessee Sublease?

Because the lessee owns the usufruct during the lease period.

Therefore, he may normally:

enjoy that benefit himself

or

allow another person to enjoy it

provided that doing so does not change or increase the type of use.

So:

Lease

↓

Lessee owns usufruct

↓

May transfer the same benefit

↓

provided the use remains equivalent

11. Example Where the User Does Not Matter

Ali rents Ahmad a normal apartment for residential use.

Ahmad lives there.

Later Ahmad allows Yusuf to live there instead.

If both people use it in the same normal way:

Ahmad’s use = normal residence

Yusuf’s use = normal residence

Therefore:

use does not materially vary

According to the rule in the passage, the substitution or sublease may be allowed without needing new permission from Ali.

12. What If Usage Changes With Different Users?

If the identity of the user changes the level or nature of use, then the lessor’s permission is required.

Why?

Because the new user may:

• cause greater wear,
• create more risk,
• use the property differently,
• expose the owner’s property to greater harm.

So:

Different user

↓

different level/type of use

↓

owner’s permission required

13. Example: Animal or Vehicle Use

Suppose Ali rents a vehicle to Ahmad for ordinary personal use.

Ahmad wants to give it to another person who will use it constantly for heavy commercial deliveries.

Now the use is not the same.

So:

ordinary personal use

is different from:

heavy commercial use

Therefore:

lessor’s permission is required

because the property may suffer greater wear or risk.

14. Example: Building Use

Ali leases a house to Ahmad for family residence.

Ahmad wants to sublease it to someone who intends to use it as a busy commercial workshop.

The use changes from:

residential use

to

commercial heavy use

That is not the same usufruct.

Therefore:

lessor’s permission is necessary

15. The Rule Is About Harm and Type of Use

The key question is not only:

“Is it a different person?”

The better question is:

“Will this new person use the property in a materially different way?”

If the answer is no:

sublease may be allowed

If the answer is yes:

owner’s permission is required

16. What If the Lessor Forbids Subleasing?

The passage gives a strong rule.

If the use of the property does not vary with different users, the lessee may sublease even if the lessor forbids him.

Example

Ali rents a normal apartment to Ahmad.

Ali says:

“Do not sublease it.”

Ahmad wants to sublease it to Yusuf for the same normal residential use.

According to the rule stated in the passage, if the use truly does not change depending on the user:

Ahmad may still sublease

because he owns the usufruct and the owner’s property is not being subjected to a different type of use.

17. But This Rule Has a Limit

Do not understand this to mean:

“A lessee can always ignore the owner’s conditions.”

That would be too broad.

The specific rule in the passage is limited to cases where:

the use does not vary with the identity of the user.

If the use differs, then:

permission becomes necessary

18. Example of Same Use

Ali rents a small apartment to Ahmad.

Ahmad uses it for one adult to live in.

Ahmad then subleases it to Yusuf, who also uses it as an ordinary residence.

If the expected use remains the same:

same type of use

↓

no materially greater burden

↓

sublease may be allowed

19. Example of Different Use

Ali rents farmland to Ahmad for light cultivation.

Ahmad wants to transfer it to someone who will use heavy machinery that may damage the soil.

Now:

use changes

↓

risk changes

↓

owner’s permission required

20. Why Is a Lease Stronger Than a Simple Loan?

This also connects to your earlier topic.

A lease is generally a binding contract.

A simple loan is generally non-binding.

Lease

The lessee pays for a legally protected usufruct.

Simple loan

The borrower receives free use, and the lender may usually recall the property.

This is why the lessee’s rights are generally stronger than those of a simple borrower.

21. Lessee Compared With Simple Borrower

A lessee receives:

usufruct in exchange for compensation

and may generally transfer that usufruct in ways allowed by the legal rules.

A simple borrower receives:

usufruct without compensation under the Hanafi and Maliki approach

but cannot lease the borrowed item because that would turn a weaker non-binding relationship into a stronger binding one.

So:

Lessee → may sublease

while

simple borrower → may not lease the borrowed item

according to the rules in the passages you are studying.

22. One Complete Example

Ali owns an apartment.

He rents it to Ahmad for three years.

Step 1 — Ownership

Ali keeps:

physical ownership

Ahmad receives:

three-year usufruct

Step 2 — Ahmad Uses It Himself

Ahmad lives there.

This is allowed.

Step 3 — Ahmad Lets Yusuf Live There

Yusuf uses it in exactly the same normal residential way.

If usage does not materially vary:

Ahmad may allow Yusuf to use it

Step 4 — Ahmad Subleases It

Ahmad charges Yusuf rent.

If Yusuf’s use is essentially the same:

sublease may be valid

according to the rule stated in the passage.

Step 5 — Yusuf Wants to Use It as a Factory

Now the use changes substantially.

Residential use becomes:

industrial/commercial use

This may increase risk or harm.

Therefore:

Ali’s permission is required

23. Direct Questions and Answers

Question 1: What does a lease transfer?

Answer:

A lease transfers:

ownership of usufruct

in exchange for:

rent or wages

Question 2: Does the lessee own the physical property?

Answer: No.

The lessor remains owner of the physical asset.

Question 3: Can the lessee use the property himself?

Answer: Yes.

He owns the usufruct for the lease period.

Question 4: Can the lessee allow another person to use it for free?

Answer: Yes, generally, if the new use is within the same type and level of usufruct.

Question 5: Can the lessee sublease?

Answer: Yes, according to the passage, if the use does not materially vary depending on the user.

Question 6: What if the lessor says, “No subleasing”?

Answer:

According to the rule stated in this passage, if the use does not vary with different users, the lessee may still sublease.

Question 7: When is the lessor’s permission required?

Answer:

When the identity of the new user changes the type, level, risk, or burden of use.

Question 8: Why?

Answer:

Because the owner should not be exposed to a greater or different use of his property without his consent.

24. Final Flow

LEASE — IJARAH

↓

Lessor owns physical property

↓

Lessee pays rent

↓

Lessee receives ownership of usufruct

↓

Lessee may:

use it himself

OR

allow another person to use it

OR

sublease it

↓

provided:

use remains materially the same

↓

If use changes:

lessor’s permission required

25. One-Sentence Rule to Memorize

A lease gives the lessee ownership of usufruct in exchange for rent, so the lessee may personally use or transfer that benefit, including by subleasing, as long as the new user’s use is not materially different; if the use changes with the user, the lessor’s permission is required.

The easiest memory shortcut is: Lease = paid usufruct; same use = sublease allowed; different use = owner’s permission needed.