Question:
Assalamualaykum Warahmatullahi Wa Barakatuh Shaykh,
I hope you are well Shaykh and in the best of health. I have benefited enormously from your thinking and knowledge over many years and continue to do so and hope you can answer my question. Click Here To Follow Our WhatsApp Channel
When considering renting a flat to live in, the landlord (housing association) requires a service charge aside from the rent, as is the norm in many apartment blocks in the UK, which contributes to the management, cleaning and maintenance of the communal areas of the building. Part of the charge also goes to a reserve fund which is an interest-bearing account, and the landlord saves it incase of major repairs. All leaseholders (residents) must contribute to this fund and cannot opt-out of the interest. The landlord says that the money cannot be returned back to the leaseholder, neither the capital nor the interest, and the landlord is in full control of the money. Although the money is “held in trust” by the landlord, in practice the money does not belong to the leaseholder. Is it allowed to pay this service charge considering the above and that it is necessary, in addition to the fact that there are limited housing options?
Another part of the service charge goes to building insurance, which is necessary to give also, again can this be given considering the limitations for housing options?
May Allah reward you and increase you in blessings.
Ahmad Suleman
Answer:
Wa ʿalaykum al-salām wa raḥmatullāhi wa barakātuh,
There is no disagreement among the scholars that ribā is categorically prohibited, whether one consumes it directly or participates in it willingly and by choice. At the same time, Islamic law is precise in distinguishing between a person who intends, controls, or benefits from ribā, and one who is indirectly and unavoidably affected by it without consent or choice.
In the situation you describe, the service charge is not a voluntary payment, nor is it an investment or a loan from the tenant or resident to the landlord. Rather, it is a compulsory condition attached to the right to reside in the property. Once paid, the money is no longer owned, controlled, or reclaimable by the resident, neither in its capital nor in any interest it may accrue. The decision to place part of that money into an interest-bearing reserve account is taken solely by the landlord or housing association, and residents are neither consulted nor able to opt out. Importantly, the resident does not intend to earn interest, does not receive it, and does not benefit from it in a personal sense.
On this basis the moral and legal responsibility for the interest-bearing arrangement lies with the party that knowingly establishes and manages it, not with the one who is compelled to pay a non-separable fee in order to secure a basic need. The payment in question is made in exchange for accommodation and the upkeep of communal facilities, which are themselves permissible, and the impermissible element is incidental and imposed rather than sought.
Furthermore, housing is a genuine and pressing need, particularly in the UK where service charges of this nature are widespread and often unavoidable in blocks of flats. Islamic jurisprudence recognises that widespread need (ḥājah ʿāmmah) may be treated akin to necessity, especially where avoiding the matter would lead to hardship, instability, or serious difficulty, and where lawful alternatives are either unavailable or extremely limited. In such circumstances, the Sharīʿah grants concession, while the original ruling regarding ribā remains unchanged in principle. One should still dislike the impermissible element in one’s heart and avoid it where a real and reasonable alternative exists, but there is no sin in proceeding under compulsion.
A similar analysis applies to the portion of the service charge allocated to building insurance. Commercial insurance, as commonly practised, involves elements of uncertainty and contractual imbalance and is therefore regarded as impermissible by the majority of scholars. However, where insurance is mandatory, inseparable from the tenancy, and required either by law or by the structure of the lease, and where the individual is not entering into the contract by choice nor able to select a Sharīʿah-compliant alternative such as takāful, then participation is permitted by necessity. In this case too, the resident is not deemed to be willfully engaging in an impermissible contract, but rather complying with unavoidable conditions attached to securing shelter.
It is important to hold firmly to two complementary principles. The first is that ribā and impermissible contracts must never be normalised or treated lightly, and a Muslim should always seek to avoid them where reasonably possible. The second is that Allah, in His mercy, does not burden a soul beyond its capacity, nor does He require a person to abandon essential needs where avoidance is genuinely beyond their control.
Your concern and caution are themselves signs of taqwā, and you are not blameworthy for entering into such arrangements under the constraints you have described. You may proceed without sin, while continuing to ask Allah for lawful provision and for avenues that are clearer and purer should He make them accessible to you.
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