IJARAH – (Lease to Own) In approach of financing, charter is artlessly a transaction in which alteration of a acreage from one being to accession being for an agreed time aeon on rental basis. Ijarah is an Islamic leasing contract, apery one of the best accepted modes of Islamic accounts currently practice. Its accepting is due to able alongside to convential leasing concept. The action of ‘Ijarah’ is actual simple and accessible to understand. This has been acquired from the Arabic appellation "Ujr" or "Ujrat" which agency 'consideration' or 'return' or 'wages'. In simple words ‘Ijarah’ defines; arrangement of hiring, renting and leasing. This approach of costs is use in case of accessories as able-bodied as property. This approach of costs is bigger for both aborigine and lessor. According to Islamic Shariah based rule, Ijarah is an acceding amid the two parties (Lessor and Lessee. In this approach of financing; an client (Lessor) transfers its usufruct to Aborigine for an agreed time aeon on arrangement basis. In return, aborigine obligation is to pay specific hire or rental for a anchored period. Aeon of charter and rental bent at the time of agreement. In Pakistan, this approach of transaction acquired accepting to acquirement car. Several articles accept been alien by banks and academy to facilitate barter and accommodate car on affordable prices and rental prices. Key words 1. The Freeholder (Mujjir) - The alone or alignment who leases out/rents out the acreage or account is alleged the Lessor. 2. The lessee: (Mustajir) - The alone or alignment who hires/takes the charter of the acreage or account adjoin the application rent/wages/remuneration is alleged the aborigine (Mustajir). . The Account (Maajur) - The account that is leased/rented out is alleged the account (Maajur). 4. The hire (Aj'r or Ujrat) - The application either in budgetary acceding or in abundance of appurtenances anchored to be paid adjoin the account of the appurtenances or account is alleged the hire or Ujrat or Aj'r. Some important aspects of Ijarah Costs • Subject of charter should be acutely defines in the acceding with the mutually compassionate of the both parties. • At the time of Ijarah transaction, asset or accessories in the buying of the lessor. Only accessible items are permissible to charter out. Non accessible items are carefully banned to charter out. Example: Money, Wheat. E. g • Continuance of charter charge be mentioned acutely in the agreement. • Aborigine acts as an ‘Ameen’. In case of any accident to asset will be borne by the lessee. On the alternative hand, any alternative accident or abuse alfresco the ascendancy of the lessee, freeholder is liable. • Hire should be accepted at the time of contract. The freeholder can not access the hire unilaterally. Hire will alpha afterwards the commitment of the asset. Action Flow 1. In aboriginal footfall chump acquisition the coffer with the appeal for costs and enters into an acceding with the bank. 2. The Coffer buys an account (car or equipment) from the vendor. 3. Coffer takes commitment of the car and appellation of buying from the vendor. 4. The coffer makes acquittal to vendor. 5. The coffer signs the acceding of charter with the chump and alteration usufruct. 6. The chump makes alternate rental acquittal as per the contract. 7. According to the agreement, at the time of ability chump can acquirement the asset from the coffer with the advice of abstracted agreement. Only Difference 1. In auction transaction, appellation of acreage usually transferred to buyer. 2. But in case of Ijarah, appellation charcoal with the lessor. 3. Only the use of the acreage is transferred to the lessee. 4. Aborigine pays hire to the freeholder as per as the agreement. 5. At the time of ability coffer active accession acceding with the aborigine and freeholder allowance the asset to the customer. Afterwards this transaction, aborigine becomes the client of the asset. This convenance is accepted as “ Ijarah – Wal – Iqtina “ Basic Elements of Ijarah Agreement According to Shariah, there are three accepted analogue acclimated for Ijarah acceding as follows: 1. Wording of the agreement: Offer and accepting chat charge be included in the agreement. 2. Contracting Parties: This includes a Lessor, the client of the property, and a lessee, the affair that allowances from the use of the property. 3. Subject bulk of the contract: This includes the hire and the benefit. Hire Calculation 1. Islamic banks account the bulk of purchasing the asset that is to be busy and intend to acquire an bulk according to the amount of interest. . Acceding amid the parties provides that the rental will be according to the amount of absorption or in accession to something. 3. While the amount of absorption is variable, it cannot be set for the accomplished continuance of the lease. 4. It is permissible to bisect the bulk amount of the Asset and buying of the Freeholder to the Asset into several genitalia and to advertise anniversary allotment of buying on acquittal of commensurable price/equity of the Freeholder beneath a abstracted auction contract.

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