Pawning and Mortgaging: Priority of Written Contract vs. Verbal Agreement in a Mortgage Deal

Practical Laws of Islam as per the teachings of Imam Khamenei

Pawning and Mortgaging: Priority of Written Contract vs. Verbal Agreement in a Mortgage Deal

English:

Question #1674:

I mortgaged some property to another person as collateral for the debt I owed him. In the contract, we agreed that the period of the mortgage is one year. However, I verbally promised to let him have the right of disposal in the property for three years. Which of the two is valid, i.e. the written agreement or the verbal pledge? Assuming that the transaction is not valid, what would the position of the two parties be?

Answer #1674:

As far as the period of the mortgage is concerned, the written paper, promise, and the like are of no consequence. The yardstick is the loan contract. If it was for a given a period, it lapses by the end of the appointed period. If not, it remains effective until the debt is settled or the mortgagee releases the mortgagor from the debt. If the mortgage is done with, or the contract proved to be lacking to start with, it is permissible for the mortgagor to ask from the mortgagee to give him back his property. For his part, the latter should have no right to refuse to return the property and to consider it as a valid mortgage.

-Imam Khamenei, Practical Laws of Islam, Importance and Conditions of Pawning and Mortgaging