Fatwa ID: 07174

Answered by: Alimah Saniyah Bint Asrar

Question:

Regarding home purchase plans, is it correct to require the customer to take out building insurance? This seems to be the case with Gatehouse and Strideup.

From what I understand the lessor must keep the asset in working condition and is liable for damage etc that does not arise as a result of the lessees negligence. And the lessee is just responsible for regular maintenance.

In the name of Allah, the Most Gracious, the Most Merciful

Answer:

In Islamic home purchase plans, the responsibilities of the lessor (owner) and lessee (customer) are clearly defined. The lessor is typically responsible for major repairs and structural maintenance of the property, as they own the asset during the lease period. They must keep the asset in usable condition and are liable for any damage not caused by the lessee’s negligence. On the other hand, the lessee is responsible for routine maintenance and minor repairs to ensure the property is kept in good condition and is liable for any damage caused by their negligence.

Building insurance is often required to protect both the lessor and lessee against risks such as fire, natural disasters, or other damages that might affect the asset. Conventionally, the owner of the property (the lessor) is responsible for insuring the asset since ownership and risk lie with them. However, in practice, some institutions may require the lessee to take out building insurance to ensure the asset is protected. This arrangement is common in products offered by institutions like Gatehouse and StrideUp.

It is important to note that conventional insurance is generally impermissible in Islamic finance due to gharar (uncertainty) and riba (interest). In the case that taking insurance is a part of the law, the above ruling will apply.

المحيط البرهاني ٥/‏٣٢٣ 

سمي القمار قمارًا؛ لأن كل واحد من المقامرين ممن يجوز أن يذهب ماله إلى صاحبه، ويستفيد مال صاحبه، فيزداد مال كل واحد منهما مرة وينتقص أخرى، فإذا كان المال مشروطًا من الجانبين كان قمارًا، والقمار حرام، ولأن فيه تعليق تمليك المال بالخطر، وإنه لا يجوز.

بدائع الصنائع في ترتيب الشرائع ٢/‏٣١٤

وَرُوِيَ أَنَّ رَسُولَ اللَّهِ ﷺ لَمَّا دَخَلَ مَكَّةَ أَبْطَلَ مِنْ الرِّبَا مَا لَمْ يُقْبَضْ، وَلَمْ يَتَعَرَّضْ ﷺ لِمَا قُبِضَ بِالْفَسْخِ، وَهُوَ أَحَدُ تَأْوِيلَاتِ قَوْلِهِ ﷿ ﴿يَا أَيُّهَا الَّذِينَ آمَنُوا اتَّقُوا اللَّهَ وَذَرُوا مَا بَقِيَ مِنَ الرِّبَا إِنْ كُنْتُمْ مُؤْمِنِينَ﴾ [البقرة: ٢٧٨] أَمَرَ سُبْحَانَهُ بِتَرْكِ مَا بَقِيَ مِنْ الرِّبَا، وَالْأَمْرُ بِتَرْكِ مَا بَقِيَ مِنْ الرِّبَا هُوَ النَّهْيُ عَنْ قَبْضِهِ، وَاَللَّهُ ﷿ الْمُوَفِّقُ.

Only Allah (عز و جل) knows best.

Written by Alimah Saniyah bint Asrar

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham