In the country where I currently live and work, accommodation is quite expensive and difficult to find. Whenever I am interested in renting a house, the person mentions that if I want to take the house, I will have to pay him “key money” which normally ranges from 5,000.00 to 18,000.00 of the local currency.
Key money is a sort of a payment you have to give to this guy for him to lease the house to you. Is this islamically lawful or not? whether the government allows this or not? Please keep in mind thatthe house is often the property of the government and the one renting it out to me is only leasing it from the government. Some of them say they take this “key money” because they also had to pay “key money” to the previous tenant when they took over the house.
Sheikh al-Sharîf Hamzah al-Fa`r, professor at Umm al-Qurâ University
It is permissible for anyone who owns a property to rent it to another person. It is also permissible for a person who leases a property to lease it in turn to another party.
Even if - as is mentioned in the question - the government is the one renting the property to the primary leaseholder, it is still permissible for the leaseholder to rent it to a third party as long as the government allows it.
There is no objection in Islamic Law to “key money” if it is a prevalent local custom in the area, since this money is being paid in exchange for the owner or tenant giving up his own right.
However, he must not lie to the new leaseholder and claim that he has paid “key money” when he himself rented the house if he actually did not do so.
He has the right to ask for “key money” even if he did not pay it before, but he must not lie.
And Allah knows best.
Source: Islam Today
-- Al Arabiya Digital