Pawning and Mortgaging: Ruling on Renting Back a Mortgaged Property from the Lender

Practical Laws of Islam as per the teachings of Imam Khamenei

Pawning and Mortgaging: Ruling on Renting Back a Mortgaged Property from the Lender

English:

Question #1671:

A mukallaf borrowed a sum of money from a person, and undertook to pay it back within a specified period of time in return for mortgaging his property. Having done that, the owner rented the same property from the person for a given rent and a particular period. Is it permissible for him to do so?

Answer #1671:

There is a problem in renting some property to its owner. Furthermore, this type of transaction is nothing but a ploy to circumvent the involvement in a ribā-bearing loan transaction that is both ḥarām and invalid.

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