The Office of the Supreme Leader

To rent out with a loaning condition

Q. What is the shar‘ī justification of what has become common these days of leaving a deposit by the tenant with the landlord?
A: There is no objection to the landlord renting his property to the tenant for a particular period and a given rent on the condition that the tenant gives him an amount of money as loan, although the landlord lowers the rent in the contract below the going rate due to the deposit.
Yet, the deal is both invalid and ḥarām if it takes any of the following forms:
The landlord borrows the money from the tenant in return for giving the latter the right of occupying the property.
The rent, whether at the going rate or less or more, is deemed a kind of a lending and borrowing transaction, culminating in giving the tenant the right, in the debt contract, of making use of the property.
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