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Difference Between Conventional Hire Purchase And Islamic Lease With Option To Purchase
No they are not the same. A conventional hire purchase is not permissible in Shariah because the sale occurs at the end of the hire period although it is entered into at the beginning of the hire period. The  Shariah-compliant ...
 
Period Of Lease Begins With Delivery Of Property Or Service
The lease itself, and the obligation of rent, begins with the delivery (and usabil...
 
Default In Ijarah
Like all other Islamic financial contracts, a penalty for a default in payment cannot be enforced. It is permissible for the lessor to maintain a security or colla...
 
Security In An Ijarah
The promise of the lessee to enter into a contract after the arrival of the asset is secured by the payment of a deposit known as the Haamish Jiddiah. The Haamish Jiddiah is either set aside or deposited in a profit bearing account based on a Musharakah or a Mudarabah. The profit earned on it is given to the lessee. If the client backs out from entering a lease contract, the bank may make up for its loss by entering into a new lease with another party or by selling the purchased asset. If a new lease is established with another party, the difference between the cost of the asset and th...
 
Ijarah: Basics Of Liability Distribution
The lessee is liable for damage to the property caused by wear and tear, and other factors within the le...
 
Seeking Dissolution Of Contract After Lease Has Begun
If there are compelling circumstances that leave the lessee with no choice but to dissolve the contract then the Ijarah will be considered dissolved fr...
 
Dissolution Of Ijarah Contract
If the lessee returns the item as a result of compelling circumstances, the remainder of the lease payment must be returned to the lessee since the lease will be considered to have been dissolved for a valid reason. If the lessee returns the item merely because he wants to and the bank agrees to the return, the remainder of the lease...
 
Ijarah Asset Possession
In an Ijarah, the lessor is the sole owner of the asset. The lessee is given usufruct of the asset for a particular usage over a particular period of time. Depending o...
 
Penalties On Late Rental Payments
If the lessee is late in paying rentals, the lessor may not gain any benefit from a penalty, because the money becomes a debt, and any receipt in excess...
 
Responsibility Of Lessor In Ijarah
With regards to the leased asset, the lessor is responsible for: • The risk associated with the leased asset, during the entire period of lease, belongs to the lessor. It is the lessor's responsibility to replace the leased asset in case of any damage to it barring negligence on the part of the lessee. • The major maintenance and insurance of the asset during the period of lease and the resulting expense is the lessor's responsibility entirely. • At the time of ...
 
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