Sub-Leasing, Insurance Premiums for Al-Manzil

By Mufti Taqi Usmani

Q.) We have recently purchased a property in the UK from The United Bank of Kuwait under their Al Manzil Islamic Home purchase plan. Mufti Taqi Usmani is on the Shari'ah board and this convinced us that indeed this type of purchase was acceptable according to Shari'ah. We opted for the ijara type mortgage as this was flexible enough to allow us to make extra payments and finish off paying the mortgage sooner. However I have two questions.

1. Although we are UK nationals we are currently not living in the property as my husband is working and renting in the Middle East. Is it therefore permissible to lease out the property to a third party even though we do not own the property and are tenants ourselves until we have paid the full amount? (This is of course with the approval of the bank)

2. UK law , I believe, requires that we take out house insurance. We pay for the insurance although the property is in the bank's name and the bank arranges the insurance through its block policy. After investigation it seems there is no Takaful type insurance available right now in the UK. Is this Ok from a Shari'ah point of view and should a disaster occur should we only take back the money we have paid in to the insurance fund and give the rest in charity?   

We waited a long time to buy a property as we did not want to be involved in any riba transaction so I would appreciate it if you could answer these questions as I think it is appropriate that only a person who specializes in this field can answer these questions accurately. [Umm Fawaz]

A.) If you have entered into an Ijara arrangement with the Al-Manzil program of United Bank of Kuwait, you can lease the property with the consent of the bank.  It will be a sub-lease which is allowed according to Shar'iah with the consent of the lessor.

According to the arrangement approved by the Shariah Board the lessee is not required to ensure the property at his own expenses. The insurance premium if any must be paid by the lessor, therefore, in your case the bank cannot make you liable to pay the insurance premium. Similarly, the proceeds of insurance should go to lessor/bank because bank is the owner of the property so long as you have not purchased it. Hence this question should not arise in your case.