Ijarah Muntahia Bitamlik
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Definition of "Ijarah Muntahia Bitamlik"
Lease (’ijarah) contracts that end up with transfer of ownership of leased assets to the lessee. It can take one of the following forms: (i) A contract that transfers the ownership of leased assets to the lessee – if the lessee so desires – for a price represented by the rental payments made by the lessee over the lease term. At the end of the lease term, legal title of leased assets passes automatically to the lessee without further contracting. (ii) A contract that gives the lessee the right of owner- ship of leased asset at the end of the lease term for a specified price, which may be a token price. (iii) A contract that gives the lessee one of the three options that he may exercise at the end of the leased term: purchasing the leased asset for a price that is determined based on rental payments made by the lessee; renewal of ’ijarah for another term; returning the leased asset to the lessor (owner). (See also operating ’ijarah.)