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What Islam Says About Conventional Land Mortgage System

In our country there are many types of land cultivation and related transactions. Their Shari’ah provisions are also mentioned in the books of Islamic jurisprudence and fatwas. We want to discuss some special masala here.

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Orchard Cultivation: It is the practice of cultivating one’s land with the labor of another and dividing the crop produced by both into equal halves or more or less as per the previous agreement. In this case any one of the three Shariah-compliant methods of other costs and expenses relevant to production can be adopted.

1. Land and seeds will be borne by one person and all the expenses of cultivation will be borne by the second person.

2. Only one person will bear the land and the other will bear all the expenses for cultivation.

3. One will bear the cost of the cow or machine for the plow with land and seeds and the other will just work.

Other than these three methods are not lawful. (Fathul Qadir: 9/47)

Land Loan to conventional methods

Mortgages are kept as a guarantee of debt recovery. This ensures that the lender can recover from the mortgaged item even if the loan is not repaid. This is also indicated in the Holy Qur’an. Allaah says (interpretation of the meaning): “And if you are on a journey and you do not find a scribe, then take a pledge. And if you trust one another, let him who is trustworthy pay his trust, and let him fear his Lord. ‘ (Surat al-Baqara, Ayat: 273)

The mortgaged item is a deposit to the mortgagor. It is unlawful and haraam for the mortgagor to get any benefit from the mortgaged land. Even if the mortgagor allows it. Because the mortgagee enjoys any kind of benefit from the mortgaged land which includes interest, which is haraam. (Badayous Sanaye: 6/146)

According to Ibn Sirin (may Allah be pleased with him), a man asked the Companion Ibn Mas’ud (may Allah be pleased with him) that a man had mortgaged a horse to me, which I used for riding. Ibn Mas’ud (may Allah be pleased with him) said: The benefit you get from it by climbing will be considered as interest. (Musannafe Abdur Razzak, Hadith: 15061)

The famous Tabi’i Imam Qazi Shuraih (ra) was asked, how is it possible to drink usury? He said the mortgagee’s mortgage included drinking cow’s milk. (Musannafe Abdur Razzak, Hadith: 15069)

valid alternative to the conventional land mortgage system

1. If the mortgagee wants to benefit from the mortgaged land, he can adopt the method of canceling the mortgage agreement and resort to long-term lease. That is, until the loan is repaid, the lender will enjoy the land on lease basis and will collect its fair rent from the owner. In this case, the loan and the lease agreement must be different, the two agreements cannot be conditional on each other. (Fatawa Hindi 5/465, Imdadul Ahkam 3/518)

2. Or he will make a ‘buy bill wafa’ agreement with the mortgagor. This means that the debtor will sell his land to the mortgagor on the promise that the mortgagor will sell the land to him again after the loan is repaid. In this case, the mortgagee can enjoy it as long as he owns it. (Imdadul Ahkam: 3/511)

What is a lease ?

It is legal to lease or lease land in short or long term. It will be permissible to use any or any other legal use for rent which does not cause significant damage to the land. If the landlord allows the lessee to cultivate all kinds of crops in general, he can cultivate any crop. (Hedaya 3/296). Leasing a garden with trees is not pure. (Raddul Muhtar 5/5)

It is not lawful to sell fruit before the fruit comes out. Rather the sale will be valid after the fruit buds have come out. Similar advance sale of orchard fruit for several years is not valid.

However, a valid method would be to sell the fruit tree and allow the buyer to keep the tree in his garden. Or the buyer will rent the garden from the owner after selling the tree. Later, if he wishes, he will sell the trees to the owner at the end of the fruit season or after a few years at that price or less. (Raddul Muhtar 5/20, Ahsanul Fatawa 6/26)

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