Dr. Monzer Kahf, a prominent economist and counsellor states: “Although leasing is permissible in principle, in many countries it is very often loaded by conditions that may make it not permissible in Shari’ah.
The essence of leasing is that the asset, a car or a house remains in the ownership of the lessor and the lessor continues to be responsible of maintaining it available for use by the lessee. Consequently, conditions that contradict this principle are not permissible.
Additionally, interest conditions are also not permissible but here we may distinguish between conditions that leave an option to the lessee and conditions that relate to the core of the contract. A condition that imposes interest in case of delay is Haram to issue but it is not Haram to accept by the customer (the lessee) if she knows that she is able to maintain no default all the time.”
