Syariah

Ijarah Is: Definition, Pillars, and Conditions

Admin BFI
28 March 2024
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Ijarah Is: Definition, Pillars, and Conditions

If you're familiar with Islamic finance terms, you've probably come across the term "Akad," which refers to a type of agreement between two parties. One common type of akad is known as ijarah.

 

In simple terms, ijarah means 'al-itsaabah' (renting). Technically, ijarah entails one person enjoying the benefits of something in exchange for compensation. Let's delve deeper into understanding ijarah agreements.

 

 

1. Definition and Concept of Ijarah

Before delving into the pillars and concepts of ijarah, it's essential to understand its complete definition. Ijarah refers to the agreement of 'hiring' when the agreed-upon results have been achieved. Here's the definition of ijarah according to laws and experts:

 

1.1 According to Law

According to Law No. 21 of 2008 concerning Islamic Banking, ijarah is an agreement between a party providing funds to transfer the right to use or benefit from an 'asset' based on a lease transaction. Traditionally, the leased property does not change hands. Thus, ownership remains with the lessee (musta'jir).

 

Meanwhile, according to Law No. 19 of 2008 concerning Sharia Securities, ijarah is an agreement where one party leases the rights to an asset to another party based on costs and periods agreed upon by both parties.

 

1.2 According to Experts

According to Rachmadi Usman, one of the experts, ijarah is the leasing of property owned by the financing party (muajjair) to the lessee (mustajir). Eventually, there is a lease term, and the leased property (muajjair) will be returned.

 

According to Wiku Suryomurti, ijarah is an agreement where the owner of the property (the lessor) commits to providing the benefit (the right to use) of their property to the lessee. However, there is a lease term, and lessees must fulfill their obligations by paying the lease fee (ujrah).

 

2. Legal Basis of Ijarah

The concept of ijarah is found in several sources as its legal basis. Here are some legal bases of Ijarah according to the Quran and the Hadith of the Prophet:

 

2.1 Based on the Quran

While there are no detailed provisions regarding the wage from an ijarah agreement, its understanding is implied in several Quranic verses. One of them is:

 

"Mothers may breastfeed their children two complete years for whoever wishes to complete the nursing [period]. Upon the father is the mothers' provision and their clothing according to what is acceptable. No person is charged with more than his capacity. No mother should be harmed through her child, and no father through his child. And upon the [father's] heir is [a duty] like that [of the father]. And if they both desire weaning through mutual consent from both of them and consultation, there is no blame upon either of them. And if you wish to have your children nursed by a substitute, there is no blame upon you as long as you give payment according to what is acceptable. And fear Allah and know that Allah is Seeing of what you do." (Quran, Al-Baqarah [2]: 233)

 

In this verse, it is explained that after hiring someone, we should pay them wages. In this verse, breastfeeding becomes 'benefit-taking' from the person being hired. Thus, what is paid is not the price of breast milk, but the person hired.

 

2.2 Based on Hadith

The following is a hadith of the Prophet Muhammad (peace be upon him) that discusses ijarah or wages:

 

From 'Aisha (may Allah be pleased with her) who said:

 

"The Prophet (peace be upon him) and Abu Bakr rented (hired) a guide who was skilled from the tribe of Bani ad-Dail, then from Bani 'Abdu bin' Adi." [1]

 

Reference: https://almanhaj.or.id/1640-ijarah-sewa-menyewa.html

 

3. Pillars and Conditions of Ijarah

ijarah is

3.1 Pillars of Ijarah

The pillars of Ijarah are as follows:

  1. 'Aaqid: the person who leases out an item (Mu’ajjir and Musta’jir)
  2. Ma’quud ‘alaih: the presence of a wage (ujrah)
  3. The presence of shighah (offer and acceptance)

 

3.2 Conditions for Valid Ijarah

The conditions for valid ijarah are as follows:

  1. Ijarah of something that has a benefit.
  2. The purpose of its use is clear.
  3. Its use is known.
  4. Its use is permissible.
  5. The ijarah wage must be clear.
  6. What is leased must retain its form, not something perishable like food.
  7. There is a lease term or for the duration of a specific job, for example: renting a room for a month or hiring someone for breastfeeding.

 

4. Types and Examples of Ijarah Contracts

4.1 Types of Ijarah

In the concept of ijarah contracts, there are various forms covering the leasing or provision of services and goods for a specific period in exchange for compensation. These types of ijarah contracts can be categorized into several categories, including:

 

  1. Ijarah Wa-Iqtina or Al-Ijarah Muntahia Bittamleek

In this type of contract, there is an agreement or promise for the transfer of ownership rights over an object leased at a specific time. The transfer of ownership can occur after the payment transaction for the leased object has been completed. This transfer process can be done through a separate contract from the initial ijarah contract. The form of payment for the transfer of ownership can be in the form of a gift, sale, or installment payment.

  1. Ijarah Thumma Al Bai’

In Ijarah thumma al bai’, the lessee leases an item with the intention of purchasing it. Therefore, after the lease period ends, the item will become the property of the lessee.

  1. Ijarah Mawsufa Bi Al Dhimma

Ijarah mawsufa bi al dhimma provides a detailed explanation of the benefits and services leased but does not include properties that yield benefits. Therefore, if there is damage to the property, the contract remains valid.

  1. Benefit Ijarah

This type involves leased objects that are non-moving assets such as clothing, jewelry, vehicles, houses, etc.

  1. Job Ijarah

Job ijarah focuses on renting objects in the form of work or services such as repairing items, building structures, sewing clothes, delivering packages, etc.

  1. Original Ijarah

Original ijarah is similar to other types of ijarah in terms of conducting lease transactions on desired leased objects. However, in this ijarah, there is no transfer of ownership rights over the asset or item.

  1. Extended Ijarah

Extended ijarah involves the activity of leasing assets or items that have previously been leased by the owner to another party for a specific period.

 

4.2 Examples of Ijarah Contracts

An example of an ijarah contract is when someone is looking for a shop for their business. Then, they meet someone willing to rent out the property. After observing the building from the outside to the inside, the tenant agrees to the property being leased. This leads to an agreement between the two parties. Once both parties agree, the tenant can use the benefits of the building, while the landlord also receives payment as a benefit.

 

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