Rent Sharing

Definition of "Rent Sharing"

A mode of financing adopted by financial institutions in Pakistan, according to which the financial institution provides part of the finance for construction of a house. The client and the financial institution share in the presumptive rent of the house. Since maintenance and taxes are to be paid by the client, a suitable allowance is given to him in the share of the rent. Similarly, the financial institution’s share is adjusted upward to provide for administrative expenses. But all legal charges are paid by the client and the house remains mortgaged until the financial institution receives back all due to it.