Definition

Ijarah is the Arabic word ‘ajr’ it means to give something on rent, consideration, return, and wages.
Under the concept of Ijarah in Islamic banking, a customer can use an asset or equipment owned by
an Islamic bank for a fixed period against a fixed price. Al Ijara is very similar to a leasing contract,
and the asset under the Ijarah finance could be used for cars, homes, plants, or machinery.

Parties

- Lessor (mu’jir) leases property lessee

- Lessee (musta’jir) in exchange for lease or rental payment (‘ujrah)

Types

2) Ijarah muntahiya bi tamlik

- it is an ijarah that ends with the ownership of the asset

Terms & condition

1) The property rented or leased must be in a useable condition

2) Ijarah must be for inconsumable goods
3) The lessee or the employee is not permitted to use the subject in a manner contrary to what
is permitted by the contract.

Mazhab

1) Shafie: Stated that has defined it as a contract possession of necessary and known benefits;
where is it can be obtained through a certain payment for something that required.
2) Hanbali: stated has defined it as a contract on a specific benefit allowed (by Syarak), at a
certain period, in a certain way or dependence liability or a job with a certain payment. 13
Ibnu Qudamah has formulated Ijarah according to the Hanbali School as bai' almanafi' (sale
and purchase of benefits)

Issue: Third-party involvement in waqf land rental

Solution: Agreements with tenants must be made on all residential owners of waqf land and renew
the agreement letter when it has expired. The agreement made is limited to a period of one or two
years only so that the rental rate can be increased without being bound by the old agreement and in
line with the current rental value