Islamic Contract Law: Contracts as a Method of Transferring Ownership

Meaning

One of the most common ways of establishing ownership in Shariah is through a valid contract.

A contract may transfer:

• Ownership of a physical asset
• Ownership of a benefit or service
• Certain legal rights

These contracts can generally be divided into two main types:

1. Exchange contracts
2. Voluntary contracts

1. Exchange Contracts

An exchange contract is a contract where each party gives something and receives something in return.

In simple terms:

Something is exchanged for something else.

The exchange may involve:

• Property for money
• Property for property
• Benefit or service for money

A. Sale Contract (

Al-Bay‘

)

A sale is the clearest example of an exchange contract.

In a sale:

• The seller transfers ownership of the property.
• The buyer gives money or another agreed counter-value in return.

Example

Ahmad sells a car to Ali for RM40,000.

• Ahmad gives the car.
• Ali gives RM40,000.
• Ownership of the car passes to Ali.

Therefore:

Car ↔ money

This is an exchange contract because both parties provide something of value.

B.

Ijarah

Contract

Ijarah is also an exchange contract, but it is different from a sale.

In ijarah:

• The owner does not normally transfer ownership of the physical asset.
• Instead, the owner transfers the benefit or service (manfa‘ah) for an agreed payment.

Example: Renting a House

Ahmad rents his house to Ali for RM1,500 per month.

• Ahmad keeps ownership of the house.
• Ali receives the right to live in and use the house.
• Ali pays rent.

So:

Manfa‘ah ↔ rent (ujrah)

This is an exchange contract because the benefit is exchanged for payment.

Example: Hiring a Teacher

A student pays a teacher RM100 for a lesson.

• Teacher provides teaching service.
• Student pays RM100.

So:

Service ↔ money

This is also ijarah.

Important Difference Between Sale and

Ijarah

Sale

Transfers ownership of the physical property.

Example:

Buy a car → buyer becomes owner of the car.

Ijarah

Transfers only the benefit or service, not ownership of the physical asset.

Example:

Rent a car → lessee may use the car but does not own it.

2. Voluntary Contracts

A voluntary contract is a contract where one party transfers something to another person without receiving any counter-value in return.

In simple terms:

One party gives, and the other receives without payment.

Hibah

— Gift

Hibah is a classic example of a voluntary contract.

It occurs when the owner of property gives it to another person without asking for payment or anything in return.

Example

Fatimah owns a laptop and gives it to Aisha as a gift.

• Fatimah transfers ownership of the laptop.
• Aisha becomes the new owner.
• Aisha does not pay Fatimah anything in return.

Therefore:

Property transferred without counter-value = hibah

Why Is

Hibah

Different from Sale?

In a sale:

Property is transferred in exchange for payment.

In hibah:

Property is transferred without payment.

Example

Ahmad gives Ali a bicycle.

If Ali pays RM500:

Sale

If Ahmad gives it freely:

Hibah

Meaning of Counter-Value

Counter-value means something given in return.

It may be:

• Money
• Property
• Service
• Another agreed benefit

So:

Exchange Contract

There is a counter-value.

Something ↔ something

Voluntary Contract

There is no counter-value.

Something → given freely

Simple Summary

Contracts that establish ownership are mainly divided into two types:

Exchange Contracts

Both parties exchange value.

Examples:

• Bay‘ → property for money or property
• Ijarah → benefit or service for payment

Voluntary Contracts

One party transfers ownership without receiving anything in return.

Example:

• Hibah → gift

Easy Way to Remember

Exchange contract = give and receive

Voluntary contract = give without return

And:

Bay‘ = ownership of asset transferred

Ijarah = benefit/service transferred

Hibah = asset transferred freely

Islamic Contract Law: Taking Possession of Permissible and Previously Unowned Property

Meaning of Taking Possession of Permissible Property

One lawful method of establishing ownership in Shariah is by taking possession of permissible property that previously belonged to no one.

For ownership to be established:

• The property must not already belong to another person.
• There must be no Shariah prohibition against acquiring it.
• The person must have the intention to take possession and own it.
• The property must not be reserved for public use or public benefit.
• In the modern context, relevant government laws and regulations must also be observed.

Main principle: A person may acquire ownership of previously unowned property by lawfully taking possession of it.

There are three important methods:

1. Revival of dead land
2. Hunting
3. Taking possession of natural resources

1. Revival of Dead Land (

Ihya’ al-Mawat

)

Meaning

Ihya’ al-mawat means reviving barren, unused, or undeveloped land that has no existing owner.

Reviving the land may involve:

• Clearing it
• Irrigating it
• Cultivating it
• Preparing it for agriculture
• Making it productive or beneficial

The land should:

• Not already belong to another person.
• Be genuinely unused or barren.
• Not be required for public purposes.
• Not be a public road, public grazing area, or other land reserved for society.

Example

Ahmad finds barren land that:

• Has no private owner.
• Is not being used as a public road.
• Is not reserved as public grazing land.
• Is legally available for development.

Ahmad clears the land, provides irrigation, and cultivates it.

Under the principle of ihya’ al-mawat, lawful revival of previously unowned barren land can become a basis for establishing ownership.

Prophetic Basis

The Prophet ﷺ said:

مَنْ أَحْيَا أَرْضًا مَيْتَةً لَيْسَتْ لِأَحَدٍ فَهُوَ أَحَقُّ

Meaning:

“Whoever revives dead land that belongs to no one has a better right to it.”

Source: Sunan Abi Dawud, Hadith no. 3074

The principle established is:

Reviving genuinely unowned barren land may become a lawful means of acquiring ownership.

Modern Application

In the modern context, a person cannot normally find unused land, cultivate it, and automatically declare himself the legal owner.

Land is regulated by the state.

Therefore:

• The land must legally be available.
• Government land regulations must be followed.
• Permission or registration may be required.
• The land must not already belong to another person or be reserved for public purposes.

Example

Ahmad discovers unused land and begins cultivating it.

Although the classical principle of ihya’ al-mawat may provide a Shariah basis for acquisition, Ahmad must also obtain the necessary approval from the relevant government authority.

Classical Shariah principle + modern land regulation must be considered together.

2. Hunting

Meaning

Hunting is another method of acquiring ownership over something that:

• Is permissible to acquire under Shariah, and
• Does not already belong to another person.

A person may establish ownership by lawfully capturing or hunting it.

Examples

• Catching fish with a net
• Catching a wild bird
• Trapping a wild animal
• Lawfully hunting a wild animal

Example: Catching Fish

Ahmad catches fish from the open sea.

Before Ahmad catches them, the fish do not belong to any particular individual.

After he lawfully catches and takes possession of them:

Ahmad becomes the owner of the fish.

Important Limitation

Hunting must comply with:

• Shariah requirements
• Government regulations
• Wildlife protection laws
• Restrictions on protected species
• Restrictions on particular hunting areas or seasons

Therefore:

The fact that something has no private owner does not necessarily mean that anyone may take it without restriction.

3. Taking Possession of Natural Resources

A person may also acquire certain naturally available resources that:

• Have no existing private owner.
• Are permissible to acquire.
• Are legally open to private acquisition.

Examples

• Water from certain natural sources
• Timber from forests where collection is permitted
• Grass from open or public land
• Other naturally occurring resources

However, natural resources require special consideration because some resources are intended for common public benefit and should not be monopolised by one individual.

Prophetic Hadith on Common Natural Resources

The Prophet Muhammad ﷺ said:

الْمُسْلِمُونَ شُرَكَاءُ فِي ثَلَاثٍ: فِي الْكَلَإِ، وَالْمَاءِ، وَالنَّارِ

Meaning:

“Muslims have a common share in three things: grass, water and fire.”

Source: Sunan Abi Dawud, Hadith no. 3477

This hadith establishes an important principle concerning common access to essential natural resources.

A. Grass

Grass in open or common grazing areas may provide food for animals belonging to members of the community.

Example

Suppose an area of public land is traditionally used by villagers to graze their livestock.

One person should not simply take exclusive control of all the grass and prevent everyone else from benefiting from it.

Grass in such common areas → resource for public benefit

B. Water

Water is essential for human beings, animals, agriculture, and society.

Certain natural water sources may therefore be available for common use.

Example

Suppose a natural water source provides essential water to an entire village.

One individual should not simply take exclusive control of the source and prevent the community from obtaining necessary water.

Common natural water source → public/community benefit

C. Fire

In the classical context, fire represented an important source of:

• Heat
• Cooking
• Light
• Energy

The broader principle concerns resources that are essential to the community and should not be unfairly monopolised.

Natural Resources and Public Ownership

The hadith helps explain why certain natural resources may fall under public or communal ownership rather than ordinary private ownership.

An important distinction must therefore be made.

Resource That Can Become Private Property

Suppose Ahmad catches an unowned fish from the sea.

Once he lawfully catches it:

Fish → Ahmad’s private property

Resource Reserved for Public Benefit

Suppose a natural water source is required by the entire community.

One individual cannot simply claim the whole source and prevent everyone else from accessing it.

Public resource → cannot simply be monopolised as private property

Therefore:

Taking possession establishes private ownership only when the property is genuinely available for private acquisition and is not reserved for public benefit.

Natural Resources Found Beneath the Land

Islamic scholars have differed regarding ownership of valuable natural resources found beneath land, such as:

• Gold
• Silver
• Natural gas
• Petroleum
• Other minerals

Maliki View

The Maliki school regards such major underground natural resources as belonging to the state, particularly because of their importance to the public interest.

Example

If a major petroleum reserve is discovered underneath privately held land, the Maliki approach does not necessarily mean that the landowner automatically owns the entire petroleum reserve.

The public interest must be considered.

View of Many Other Scholars

Many other scholars hold that natural resources beneath privately owned land may belong to the owner of the land, because the owner’s rights over the land may extend to what exists underneath it.

Example

Ahmad owns a piece of land and valuable resources are discovered beneath it.

Under this view:

Ownership of the underground resources may follow ownership of the land.

Resources Under Land Without a Private Owner

If there is no particular private owner of the land, the natural resources may belong to or be managed by the state for the public interest.

Why Natural Resources Are Different

Natural resources may have enormous importance for society.

For example:

Catching one fish

A person catches one fish from the sea.

It can easily become private property.

Discovering a major petroleum reserve

A huge petroleum reserve may affect:

• National wealth
• Public welfare
• Energy supply
• The wider economy

Therefore, its ownership raises broader questions of public interest and state responsibility.

Simple Summary

Taking possession of permissible property is one lawful method of establishing ownership in Shariah.

The property should:

• Have no previous owner.
• Be permissible to acquire.
• Not be reserved for public benefit.
• Be taken with the intention of ownership.
• Be acquired according to applicable government regulations.

1. Revival of Dead Land —

Ihya’ al-Mawat

Previously unowned barren land is made productive.

Example: Clearing, irrigating and cultivating barren land.

Hadith: Sunan Abi Dawud, no. 3074.

2. Hunting

A person lawfully captures an animal or fish that previously belonged to no one.

Example: Catching fish from the open sea.

3. Natural Resources

A person may take possession of natural resources that are lawfully available for private acquisition.

However, certain essential resources are protected for common benefit.

The Prophet ﷺ said:

الْمُسْلِمُونَ شُرَكَاءُ فِي ثَلَاثٍ: فِي الْكَلَإِ، وَالْمَاءِ، وَالنَّارِ

“Muslims have a common share in three things: grass, water and fire.”

Sunan Abi Dawud, Hadith no. 3477

Easy Way to Remember

Dead land → revive it

Wild animal or fish → lawfully capture it

Natural resources → acquire only when open to private acquisition

Common public resources → cannot simply be monopolised for private ownership

Islamic Contract Law: Methods of Establishing Ownership

Islamic law does not only prohibit unlawful ways of acquiring property. It also provides lawful methods through which ownership (milkiyyah) can be established.

According to Shariah, ownership can generally be established in three main ways:

1. Taking possession of property that previously had no owner
2. Through contracts that transfer ownership
3. Through succession

1. Taking Possession of Previously Unowned Property

A person may become the owner of property that did not previously belong to anyone, provided that taking possession of it is permitted by Shariah.

The person becomes the owner by lawfully taking control of the property.

Examples

• Catching fish from the sea
• Hunting a wild animal in a lawful manner
• Collecting naturally available resources that are not privately owned
• Taking possession of previously unowned land where Shariah and the law allow it

Example

Ahmad catches a fish from the sea.

Before Ahmad caught it, the fish did not belong to any particular person.

Once he lawfully catches and takes possession of it:

Ahmad becomes the owner of the fish.

This method is based on the idea that property which has no existing private owner may become privately owned through lawful possession.

2. Ownership Through Contracts

Ownership may also be transferred from one person to another through a valid contract.

In this situation, the property already belongs to someone, but ownership changes because of an agreement recognised by Shariah.

Examples of Contracts That May Transfer Ownership

• Sale (bay‘)
• Gift (hibah)
• Exchange
• Certain other valid transfer contracts

Example: Sale

Ahmad owns a car and sells it to Ali for RM30,000.

Before the sale:

• Ahmad = owner

After a valid sale:

• Ali = new owner

Therefore:

Ownership is transferred through the sale contract.

Example: Gift

Fatimah owns a laptop and gives it to Aisha as a gift.

Once the gift is validly completed:

Aisha becomes the owner of the laptop.

Therefore, ownership may be transferred without payment as well.

3. Ownership Through Succession

Succession means ownership passes from one person to another because of a legal event, rather than through a normal sale or voluntary transfer.

The clearest example is inheritance.

Example: Inheritance

Ahmad owns a house.

When Ahmad dies, his ownership ends and the house passes to his lawful heirs according to the rules of inheritance.

The heirs become owners because of succession.

Therefore:

Ownership passes automatically according to Shariah inheritance rules.

Why Succession Is Different from a Contract

In a contract, ownership is transferred because the parties agree to the transfer.

For example:

Seller agrees to sell → buyer agrees to buy.

In succession, ownership may pass without a new contract between the previous owner and the new owner.

For example:

A person dies → property passes to the heirs according to Shariah.

Simple Summary

There are three main lawful ways of establishing ownership:

1. Taking Possession of Unowned Property

A person lawfully takes control of something that previously had no owner.

Example: Catching fish from the sea.

2. Through Contracts

Ownership is transferred from one person to another through a valid agreement.

Examples: Sale and gift.

3. Through Succession

Ownership passes because of a legal event.

Example: Inheritance after the death of an owner.

Easy Way to Remember

Unowned property → take lawful possession

Existing owner → ownership transferred through contract

Death or succession → ownership passes to the successor

The key principle is that ownership must be established through a method recognised by Shariah; unlawful taking of another person’s property does not create valid ownership.

Islamic Contract Law: Types of Ownership in Islam

Ownership in Islamic law can be classified from two main perspectives:

1. According to the nature of the owner
2. According to the substance or extent of the ownership

1. Ownership According to the Nature of the Owner

This classification focuses on:

Who owns or controls the property?

It is divided into:

• Public ownership
• Private ownership

A. Public Ownership

Public ownership refers to property that is intended for the benefit of the public or community rather than the exclusive benefit of one individual.

Public ownership may include three main categories.

i. Property for Public Benefit

These are properties that are made available for the benefit or use of society.

Examples:

• Public roads
• Mosques
• Public facilities
• Certain waqf properties

The public may benefit from them according to the rules governing their use.

Example: A public road may be used by everyone and cannot normally be claimed exclusively by one person.

ii. Natural Resources

These are resources that may be regarded as belonging to or being managed for the wider community.

Examples:

• Water resources
• Oil
• Natural gas
• Certain minerals

Such resources may be regulated to ensure that society benefits from them.

iii. Property Transferred to the Government Treasury

Certain property may pass to the government treasury or Bayt al-Mal when there is no particular private owner entitled to it.

Examples:

• Certain lost property where the owner cannot be identified
• Property of a deceased person where there is no eligible heir, according to the applicable rules

The property is then managed for the public interest.

B. Private Ownership

Private ownership refers to property owned by a particular person or group of persons.

The owner has the right to use and dispose of the property, subject to Shariah.

Private ownership is divided into two types.

i. Individual Ownership

This occurs when one person owns the property.

Example:

Fatimah owns a car by herself.

One owner = individual ownership

ii. Joint Ownership

This occurs when two or more people own the same property together.

Example:

Ahmad and Ali jointly purchase a house.

• Ahmad owns 50%
• Ali owns 50%

Two or more owners = joint ownership

2. Ownership According to the Substance of the Property

This classification focuses on:

How much of the property right does the person own?

It is divided into:

• Complete ownership
• Deficient ownership

A. Complete Ownership —

Al-Milk al-Tamm

Complete ownership exists when the owner has rights over both:

• The physical property itself — ‘ayn
• The benefit or usufruct — manfa‘ah

Example

Ahmad owns a house and lives in it.

He owns:

• The house itself
• The right to use and enjoy the house

Therefore:

‘Ayn + Manfa‘ah = Complete ownership

The owner may generally use, sell, rent, gift, or transfer the property, subject to Shariah.

B. Deficient Ownership —

Al-Milk al-Naqis

Deficient ownership exists when a person has rights over only part of the ownership relationship.

The person may have:

• Rights over the physical asset without currently enjoying its benefit, or
• Rights over the benefit without owning the physical asset

Example: Tenant

Ahmad owns a house and rents it to Ali.

• Ahmad remains owner of the house itself — ‘ayn
• Ali receives the right to live in the house — manfa‘ah

Ali does not own the house itself.

Therefore:

Ali has a limited or deficient ownership interest in the manfa‘ah.

Simple Structure to Remember

According to the Nature of the Owner

Public Ownership

• Property for public benefit
• Natural resources
• Property transferred to the government treasury

Private Ownership

• Individual ownership
• Joint ownership

According to the Substance of Ownership

Complete Ownership

• ‘Ayn + Manfa‘ah

Deficient Ownership

• Only part of the ownership rights, such as ‘ayn or manfa‘ah

Easy Memory Rule

Nature of owner = Who owns it?

Substance of ownership = How much of it do they own?

Islamic Contract Law: Public Ownership and

Waqf

— Differences and Examples

Meaning of Public Ownership

Public ownership refers to property that is owned, controlled, or managed for the benefit of society as a whole.

Examples include:

• Government hospitals
• Public schools
• Public libraries
• Public roads
• Public parks
• Certain natural resources
• Property managed by the public treasury

The important point is that the property serves the general public.

Public ownership = property held or managed for public benefit.

Meaning of

Waqf

Waqf refers to property that has been specifically and permanently dedicated for a lawful religious, charitable, educational, or public purpose.

The original asset is preserved, while its benefit (manfa‘ah) is given to the intended beneficiaries.

Waqf = permanent dedication of an asset for a specific lawful purpose.

Therefore, something may serve the public without automatically becoming waqf.

1. Hospital

Hospital under Public Ownership

Suppose the government buys land and builds a hospital using public funds.

The hospital:

• Is owned or managed by the government.
• Provides healthcare to the public.
• Is maintained using public resources.
• May be reorganised or managed according to government policies.

Therefore:

Government hospital = public ownership

It is not automatically waqf simply because the public uses it.

Hospital under

Waqf

Suppose a person permanently dedicates a building as a hospital for the poor.

The property is established as waqf.

• Building = waqf asset
• Healthcare use = manfa‘ah
• Beneficiaries = the intended patients or public

Therefore:

Hospital permanently dedicated for healthcare = waqf

Difference

A public hospital is public because it is owned or managed for society.

A waqf hospital is public-serving because the property has been permanently dedicated for healthcare.

2. Library

Public Library

Suppose the government builds and manages a library for the community.

People may:

• Read books
• Borrow books
• Study
• Use the library facilities

Therefore:

Government library = public ownership

Waqf

Library

Suppose Fatimah permanently dedicates a building and a collection of books for students and members of the public.

The property becomes waqf.

• Building and books = waqf assets
• Reading and studying = manfa‘ah

Therefore:

Permanently endowed library = waqf

3. Mosque

A mosque is commonly associated with waqf because land or a building is permanently dedicated for worship.

Example

Ahmad owns land and permanently dedicates it as a mosque.

After the dedication:

• He cannot normally treat it as his ordinary private property.
• The mosque is preserved for worship.
• The Muslim community receives the benefit of using it.

Therefore:

Mosque building = waqf asset

Prayer and worship = manfa‘ah

A government may also build a mosque. Once it is properly dedicated as a mosque, it generally acquires a special religious status rather than remaining an ordinary government building.

4. Public Road

Road under Public Ownership

Suppose the government constructs a road for public transportation.

The road:

• Is available for public use.
• Is maintained by public authorities.
• Cannot normally be claimed exclusively by one person.

Therefore:

Government road = public ownership

It does not automatically become waqf.

Road or Pathway under

Waqf

Suppose Ahmad owns land and permanently dedicates part of it as a pathway for villagers.

If properly established as waqf, the land is permanently reserved for public passage.

Therefore:

Land permanently dedicated as a public pathway = may be waqf

5. School

Public School

A government buys land and builds a school using public funds.

The school serves students in the community.

Therefore:

Government school = public ownership

Waqf

School

A person permanently dedicates land and a building for educational purposes.

The property is preserved for education.

Therefore:

Permanently endowed school = waqf

6. Public Park

Public Park

The government develops land as a park for:

• Recreation
• Exercise
• Community activities

Therefore:

Government park = public ownership

Waqf

Recreational Land

A person may permanently dedicate land for community recreation or another lawful public purpose.

If established as waqf:

The land = waqf asset

Public use = manfa‘ah

7. Public Well or Water Facility

Publicly Owned Water Facility

The government may construct and manage a water facility for the community.

Therefore:

Government water facility = public ownership

Waqf

Well

Suppose a person digs a well and permanently dedicates it so that everyone may obtain water from it.

The well becomes a charitable waqf.

• Well = waqf asset
• Access to water = manfa‘ah

Therefore:

Permanently dedicated public well = waqf

8. Natural Resources

Natural resources clearly show why public ownership and waqf are not the same thing.

Examples may include:

• Water resources
• Oil
• Gas
• Minerals

Such resources may be managed for the benefit of society.

They do not necessarily need to be formally dedicated by anyone as waqf.

Therefore:

Public natural resources = public ownership, but not automatically waqf.

Main Difference Between Public Ownership and

Waqf

The main question for public ownership is:

Is the property owned or managed for the benefit of society?

The main question for waqf is:

Has the property been permanently dedicated for a specific lawful purpose?

So:

Public benefit alone does not automatically create waqf.

A hospital, library, school, road, park, or well may serve the public under ordinary public ownership, or it may become waqf if it is specifically and permanently dedicated for that purpose.

Simple Summary

Public ownership

• Owned or managed for society.
• Usually administered by the state or public authority.
• Example: government hospital, public road, public library.

Waqf

• Property permanently dedicated for a specific lawful purpose.
• The asset is preserved.
• Its manfa‘ah is given to the beneficiaries.
• Example: mosque, waqf hospital, waqf library.

Easy Way to Remember

Public ownership = public control and public benefit.

Waqf = permanent dedication for a specific lawful purpose.

All waqf serving society may have a public-benefit character, but not all public property is waqf.

Islamic Contract Law:

Waqf

as Part of Public Ownership

Meaning of

Waqf

Waqf refers to property that is permanently dedicated for a specific religious, charitable, family, or public purpose.

The main idea is that:

• The original asset is preserved.
• Its benefit (manfa‘ah) is given to the intended beneficiaries.
• The property is not normally treated like ordinary private property that can simply be sold or used freely by an individual.

Is

Waqf

a Subset of Public Ownership?

Yes, some forms of waqf can be treated as part of public or community-oriented ownership, especially when the property is dedicated for the benefit of society.

However, it is more accurate to say:

Public waqf can fall under public ownership, but not every waqf is necessarily public.

Public or Charitable

Waqf

A public or charitable waqf is often called waqf khayri.

This type of waqf is dedicated for the benefit of the public or for a charitable purpose.

Examples

• Mosque
• Waqf land for a school
• Waqf hospital
• Public well
• Waqf property used to support the poor

In these cases, the property serves the wider community.

Therefore:

Waqf khayri = public or charitable waqf = may be treated as part of public ownership

Example: Mosque as

Waqf

Suppose a person dedicates a building permanently as a mosque.

• The building itself becomes the waqf asset.
• The public may use it for worship.
• The original owner can no longer treat it as ordinary private property.

So:

Mosque building = waqf asset

Use of the mosque for worship = manfa‘ah enjoyed by the public

This is why such waqf can be viewed as public or community-oriented ownership.

Family

Waqf

There is also a form of waqf known as waqf ahli or waqf dhurri.

This type of waqf is created mainly for the benefit of:

• Family members
• Children
• Descendants
• Specific individuals

Example

Ahmad dedicates a house as waqf so that his children and grandchildren may live in it.

The benefit is not immediately given to the public.

Therefore:

Family waqf is not the same as public ownership in the ordinary sense.

This is why it is not accurate to say that all waqf are public ownership.

Why

Waqf

Is Different from Ordinary Public Property

Although public waqf may benefit society, waqf has its own special legal nature.

In waqf:

• The asset is preserved.
• The asset is dedicated for a fixed purpose.
• The benefit is given to the beneficiaries.
• The property cannot normally be freely sold or transferred like ordinary private property.

Ordinary public property, such as a public road, is managed for general public use, but it does not necessarily operate under the same legal rules as waqf.

Relationship with

Manfa‘ah

The concept of manfa‘ah is very important in waqf.

The waqf asset itself remains preserved, while its benefit is used for the intended purpose.

Example: Waqf House for Students

A person dedicates a house as waqf for university students.

• House itself = waqf asset
• Students living in the house = manfa‘ah
• Beneficiaries = students

The house remains, while the benefit is continuously enjoyed by the beneficiaries.

Simple Summary

Public Waqf

Property dedicated for:

• Public benefit
• Religious purposes
• Charitable purposes

Examples:

• Mosque
• School
• Hospital
• Public well

This type of waqf may be treated as part of public or community-oriented ownership.

Family Waqf

Property dedicated for:

• Family members
• Descendants
• Specific beneficiaries

This is not public ownership in the same sense.

Easy Way to Remember

Waqf = asset is preserved, benefit is dedicated

Public waqf = benefit for society

Family waqf = benefit for specific family members

So, for your notes, the safest statement is:

Waqf may be classified under public ownership when it is dedicated for public or charitable benefit, but not all waqf are public because some waqf are created for specific family beneficiaries.

Islamic Contract Law: Classification of Ownership According to Its Substance

Ownership (milkiyyah) can be classified according to how much of the property a person actually owns.

In terms of substance, ownership is divided into two main types:

1. Complete ownership (al-milk al-tamm)
2. Deficient ownership (al-milk al-naqis)

1. Complete Ownership (

Al-Milk al-Tamm

)

Al-milk al-tamm means complete or full ownership.

The owner has rights over both:

• The physical property itself (‘ayn)
• The benefit or usufruct (manfa‘ah) of the property

This gives the owner broad authority to use and deal with the property, as long as the use is permitted by Shariah.

Rights of a Complete Owner

The owner may generally:

• Use the property
• Live in it
• Rent it out
• Sell it
• Give it as a gift
• Donate it
• Transfer ownership to another person

Example

Ahmad owns a house and lives in it.

He owns:

• The house itself = ‘ayn
• The benefit of living in it = manfa‘ah

Therefore, Ahmad has:

Complete ownership (al-milk al-tamm)

Another Example

Fatimah owns a car.

She owns the physical car and also has the right to use it.

She may:

• Drive it
• Rent it
• Sell it
• Give it away

Therefore, her ownership is complete.

Easy Meaning

Complete ownership = ownership of both the asset and its benefit.

2. Deficient Ownership (

Al-Milk al-Naqis

)

Al-milk al-naqis means incomplete, limited, or deficient ownership.

In this type of ownership, a person does not have full rights over both the physical property and its benefit.

Instead, the person may have a right over:

• The physical property (‘ayn) only, or
• The usufruct or benefit (manfa‘ah) only

Therefore, the person’s control is limited.

Example: Ownership of

Manfa‘ah

Only

Ahmad owns a house and rents it to Ali for one year.

During the lease:

• Ahmad remains the owner of the house itself.
• Ali receives the right to live in and use the house for one year.

Ali does not own the physical house.

He only has the manfa‘ah.

Therefore, Ali has a form of:

Deficient ownership

because he owns or controls only the benefit, not the physical asset.

Example: Ownership of the Physical Asset While Another Person Has the Benefit

Suppose Ahmad owns a house but has rented it to Ali.

Ahmad still owns the:

Physical house (‘ayn)

However, during the rental period, Ali has the:

Right of use (manfa‘ah)

Ahmad cannot simply occupy the house during the rental period because the benefit has been transferred to Ali.

So Ahmad’s immediate rights over the property are restricted for the duration of the lease.

This illustrates how ownership of the asset and ownership of its benefit can be separated.

Main Difference

Complete Ownership

The person owns:

‘Ayn + Manfa‘ah

Example:

Ahmad owns and uses his own house.

Deficient Ownership

The person owns or controls:

Only ‘ayn

or

Only manfa‘ah

Example:

A tenant has the manfa‘ah of a rented house but does not own the house itself.

Why Is It Called “Deficient” Ownership?

The word deficient does not mean the ownership is invalid.

It simply means that the person does not have all the rights that a complete owner would have.

The ownership is limited to only one part of the property relationship.

For example, a tenant lawfully has the right to live in the property, but the tenant cannot usually:

• Sell the house
• Give the house away
• Claim permanent ownership

This is because the tenant owns only the benefit, not the physical property.

Simple Summary

Complete Ownership —

Al-Milk al-Tamm

The owner has rights over:

• Physical property (‘ayn)
• Benefit (manfa‘ah)

Example:

Owner of a house who also has the right to use it

Deficient Ownership —

Al-Milk al-Naqis

The person has rights over:

• The physical property only, or
• The benefit only

Example:

Tenant who has the right to live in a rented house but does not own the house

Easy Way to Remember

Complete ownership = ‘ayn + manfa‘ah

Deficient ownership = only ‘ayn or only manfa‘ah

Islamic Contract Law: Classification of Ownership (

Milkiyyah

)

Ownership in Islamic law can be classified from different perspectives because a person may have full ownership, partial ownership, or ownership may be shared between several people.

The classification of ownership is mainly based on two principles:

1. According to the substance or extent of ownership
2. According to the nature of the owner

1. Classification According to the Substance of Ownership

This classification looks at how much of the property right a person owns.

A person may have:

• Complete ownership
• Partial ownership

A. Complete Ownership

Complete ownership means a person owns both:

• The physical property itself (‘ayn)
• The benefit or use of the property (manfa‘ah)

The owner therefore has full control over the property, subject to Shariah.

Example

Ahmad owns a house and lives in it.

He owns:

• The house itself = ‘ayn
• The benefit of living in it = manfa‘ah

Therefore, Ahmad has complete ownership.

He may generally:

• Live in the house
• Rent it
• Sell it
• Give it as a gift
• Transfer it to another person

So:

Complete ownership = ownership of both the asset and its benefit.

B. Partial Ownership

Partial ownership means a person owns only one aspect of the property, rather than both the physical asset and its benefit.

This may happen where:

• One person owns the physical property
• Another person owns or has the right to its benefit

Example: Rental

Ahmad owns a house and rents it to Ali for one year.

During the rental period:

• Ahmad owns the physical house = ‘ayn
• Ali receives the right to live in and use the house = manfa‘ah

Therefore, Ali does not have complete ownership of the house.

He has only the benefit of the property for a limited period.

So:

Partial ownership = ownership or entitlement over only part of the property right.

2. Classification According to the Nature of the Owner

This classification looks at who owns the property.

Ownership may belong to:

• One individual
• Several individuals together
• A group or institution

A. Individual Ownership

Individual ownership means the property belongs to one person.

Example

Fatimah owns a car in her own name.

She alone is the owner.

Therefore:

Individual ownership = one person owns the property.

B. Joint or Shared Ownership

Joint ownership means a property belongs to two or more people together.

Each person owns a share in the property.

Example

Ahmad and Ali jointly buy a house.

Ahmad owns 50%.

Ali owns 50%.

Neither person owns the whole house individually.

They are co-owners.

Therefore:

Joint ownership = several people share ownership of the same property.

Why This Classification Is Important

This classification helps determine:

• Who has the right to use the property
• Who may sell or transfer it
• Who is entitled to its benefits
• Whether consent of other owners is required
• How liability and responsibilities are divided

Simple Summary

Ownership can be classified in two main ways.

According to the Substance of Ownership

• Complete ownership → ownership of both the physical asset and its benefit
• Partial ownership → ownership of only part of the property right

According to the Nature of the Owner

• Individual ownership → owned by one person
• Joint ownership → owned by two or more people

Easy Way to Remember

Substance of ownership = how much do you own?

Nature of owner = who owns it?

Islamic Contract Law: General Characteristics of Ownership in Islam

1. Property and Ownership Are Respected in Islam

Islam places strong emphasis on the protection and sanctity of property (mal).

A person’s lawful ownership must be respected, and other people are not allowed to:

• Take the property without permission
• Damage it
• Use it unlawfully
• Deprive the owner of it without a valid Shariah reason

Therefore, Islam recognises individual ownership, but that ownership is subject to the principles of Shariah.

2. Absolute Ownership Belongs to Allah

A fundamental principle of Islamic ownership is:

Allah s.w.t. is the absolute and ultimate owner of all wealth and property.

Human beings may legally own property in this world, but their ownership is not absolute.

A person may own:

• A house
• Land
• Money
• A business
• A car

However, from the Islamic perspective, all wealth ultimately belongs to Allah, while human beings are given the authority to possess and manage it.

3. Human Beings Are Trustees of Wealth

Allah says in Surah al-Hadid:

“Believe in Allah and His Messenger and spend out of that in which He has made you trustees…”

(Surah al-Hadid, 57:7)

The verse shows that human beings are not the absolute owners of wealth.

Instead, they are mustakhlafin — people who have been entrusted with wealth and given responsibility over it.

Therefore:

Allah = absolute owner

Human being = trustee and temporary owner/user

4. Meaning of

Mustakhlafin

The Arabic word mustakhlafin can carry two important meanings:

A. Deputies or Representatives

Human beings are appointed as representatives or trustees over the wealth given to them.

This means:

• Wealth ultimately belongs to Allah.
• Humans are given authority to manage it.
• They must use it according to Allah’s rules.

Example

Ahmad owns RM100,000.

Legally, the money belongs to Ahmad and other people cannot take it from him.

However, Islamic ownership also requires Ahmad to remember that the wealth ultimately comes from Allah.

Therefore, Ahmad cannot simply say:

“It is my money, so I can use it in any way I want.”

He must use it within the limits of Shariah.

B. Successors

Mustakhlafin can also mean successors.

This reminds human beings that wealth does not remain permanently with one person.

A person may receive wealth from someone before them, use it during their lifetime, and eventually leave it to others.

Example

A person may inherit land from their parents.

Later, when that person dies, the land may pass to their own heirs.

Therefore, human ownership is temporary, while Allah’s ownership is permanent.

5. Human Ownership Is Recognised but Limited

Islam recognises private ownership.

A person may lawfully:

• Own property
• Use it
• Sell it
• Rent it
• Give it as a gift
• Invest it
• Transfer it to others

However, these rights are not unlimited.

The owner must follow Shariah when dealing with the property.

Example

A person owns a shop.

Because they are the lawful owner, they may:

• Operate a business there
• Rent the shop to someone
• Sell the shop

However, they should not knowingly use the property for activities prohibited by Shariah.

Therefore:

Islamic ownership gives rights, but those rights come with responsibilities.

6. Wealth Should Be Used in a Lawful and Responsible Way

Since humans are trustees, wealth should be used in ways that are pleasing to Allah.

This includes:

• Spending on oneself and one’s family lawfully
• Giving zakat when required
• Giving charity
• Helping people in need
• Investing in lawful activities
• Avoiding prohibited transactions
• Avoiding waste and misuse

Islam does not require a person to give away all their wealth.

Rather, a person may enjoy and benefit from their property while following Shariah.

Example

Fatimah owns a successful business.

Islam allows her to:

• Earn profit
• Buy a house
• Save money
• Support her family
• Invest her wealth

At the same time, she must observe responsibilities such as:

• Avoiding prohibited income
• Paying zakat when applicable
• Fulfilling contractual obligations
• Avoiding injustice
• Using wealth responsibly

This reflects the idea that she is both an owner and a trustee.

7. Ownership Creates Responsibility

The Islamic concept of ownership is therefore different from the idea of completely unrestricted ownership.

A Muslim should understand:

“I own this property in relation to other people, but Allah is the ultimate owner, and I am responsible for how I use it.”

This understanding encourages a person to use wealth responsibly rather than selfishly or unlawfully.

Simple Summary

The main characteristics of Islamic ownership are:

• Islam strongly protects property and ownership.
• Allah is the absolute owner of all wealth.
• Human beings are mustakhlafin — trustees, representatives, and successors.
• Humans may enjoy lawful private ownership.
• Human ownership is temporary and limited by Shariah.
• Owners may use and dispose of their property, but only in lawful ways.
• Wealth should be managed responsibly and used in ways that seek Allah’s pleasure.

Easy Way to Remember

Allah = Absolute Owner

Human = Trustee + lawful owner in this world

Ownership = Rights + Responsibilities + Shariah limits