Subject : Ruling on Timeshare Contract
Fatwa Number : 3483
Date : 26-03-2019
Classified : Current Financial Issues
Fatwa Type : Search Fatawaa

Question :

What is the ruling of Sharia on timeshare contract?

The Answer :

Praise be to Allah, the Lord of the Worlds.

Timeshare contract entails possessing undetermined shares in a property`s benefits where the possessed or hired property is benefitted from by partners successively. This contract is based on selling or leasing a certain residential unit to many people. Timeshare is beneficial to both parties of contract. The costs of stay, maintenance, and furniture are reduced for the receiver of service, and, on equal basis, the investment costs are reduced for the provider of service.

From the perspectives of Sharia and law, timeshare is divided into two parts:

First: Complete possession (Property and benefit) by purchasing an undetermined share through a sale contract for joint benefit over successive periods. By this, it is a sale contract of an undetermined share of a property along with taking turns in benefitting from that property, and partners agree on turns annually. In this form of transaction, the conditions stipulated in a sale contract should be met. For example, the sold property is defined and each partner pays for its maintenance.

Second: Incomplete possession (only the benefit) by leasing an undetermined share of the benefit through an Ijarah (Leasing) contract for joint benefit over successive periods. It is a leasing contract for temporary possession of an undetermined share of a certain or a described property`s benefit along with using that benefit by turns where partners agree on their turns annually till the end of the leasing period. Accordingly, this contract should meet the conditions of an Ijarah contract. For example, the property and the timeline of the contract are defined, and the lessor is liable for the basic maintenance of the leased property.

Taking turns is a division of benefits amongst partners alternately, and scholars approve of this when done consensually. During its twelfth session, the International Islamic Fiqh assembly and the Accounting and Auditing Organization for Islamic Financial Institutions(AAOIFI) have permitted, in standard (9), the timeshare contract so long as it meets the conditions of sale and Ijarah contracts.

In conclusion, there is no blame in dealing with timeshare contract (Selling and buying shares) or leasing benefits of shares, if the conditions of sale and Ijarah contracts are met. We recommend exercising caution before making purchases from some companies that deal in timeshare contracts. And Allah the Almighty knows best.



Warning: this window is not dedicated to receive religious questions, but to comment on topics published for the benefit of the site administrators—and not for publication. We are pleased to receive religious questions in the section "Send Your Question". So we apologize to readers for not answering any questions through this window of "Comments" for the sake of work organization. Thank you.