Key Money When Renting Out Premises

Question

Nowadays owners of houses or shops, when renting out property, also take 25–30 thousand as key money, and thereafter the agreed rent is paid month by month or yearly. This advance sum is, after all, devoid of any consideration. Is this key money permissible in the Shariʿa or not?

Answer

Let two kinds of rent be stipulated: one paid up front (muʿajjal), whose lump-sum amount is specified, and the other in instalments every month or every year. The first is customarily called key money, and the second is called rent. If the owner of a house or shop rents it out to someone in this way, then there appears to be latitude for it.

Source: Fatawa Mahmudiyya

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