Is Ijarah (Leasing) a Sale of Services?
Islamic finance is a very interesting subject and really requires subtle understanding. The very slight difference between two concepts could reverse the whole issue. It is no wonder that the concern becomes higher when such concepts are rendered into another language with a different cultural background.
Answering this question, Dr. Monzer Kahf, an expert in Islamic economics and finance, said,
Yes, of course. What would ijarah be other than a sale of usufruct or service? The distinction between usufruct and service is coined by me, and I am the only one who uses it in scientific papers. When you take a taxi, you are getting a service (a mixture of the products of the driver and the car), but when you rent a car, that is usufruct only because it is a “service” of an asset without a human element with it.
Consequently, while renting an apartment is a purchase of usufruct and hiring a tutor is employment, registering for 12 credit hours in a university by paying tuition is getting a service. All these three forms are covered by the same Shari`ah rulings under the title ijarah.
Ijarah is applicable to assets, as well as to human services.
And ijarah is a sale that transfers the property of what is sold. The manafi` are properties sold in ijarah, and they can be sold by the purchaser without the condition of actual possession (known in sale), because you cannot possess manafi`, unless you consume them!