Condition

Q 2: Private contracts of renting out, for instance, flats or shops include a punitive condition to the effect that tenants should pay rent regularly on definite timings without receiving claims and when they are late; tenants pay fines of 10% of the rents' values for every delayed month. Is such an increase considered a type of Riba (usury/interest) or is the concerned sum Halal (lawful)? It is worth mentioning that, according to the contract, the rent of the asset is constant for five years or more and renewable for a similar period with no increase. I hope that your Eminence will kindly give me a Fatwa on this according to rulings of Shari`ah (Islamic law) for today's employers innovate many conditions to secure only their interests without considering the interests of the second party. I ask Allah to guide me and all my Muslim brothers and to help your Eminence inform me of that which leads to goodness and righteousness for Verily, Allah is all-Hearing and Responsive.

A: It is impermissible to condition the increase of a percentage of the rent in case the tenant does not pay the rent at the time that the two parties agreed on. This is because doing so is considered Riba (usury/interest) similar to that of Jahiliyyah (pre-Islamic time of ignorance) when people used to say: "either to pay or we will increase the sum". (Part No. 15; Page No. 116) May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.