Key Money for Premises

Question

Shops are given and taken against key money for the tenancy right — is this permissible or impermissible? If it is permissible, what can the permissible form be, and if it is impermissible, for what reason is it impermissible? Further, a shop had been in one man’s possession for a long time; now this man has fallen ill and has been lying at home for about four or five years, and the shop stands closed, and this man regards paying the rent for this shop as money paid for nothing, since he is ill and lying at home.

Answer

Let the owner of the shop rent out his shop to someone in this manner, for example: “I rent out this shop for one year; the rent will be twenty rupees a month, and I shall take four hundred rupees in advance as key money together with one month’s rent” — this form is valid.

Source: Fatawa Mahmudiyya

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