Surety is an item given to the borrower as a security in case of not repaying the debt; The surety should be definite in type and description and can be used or sold. Surety is legitimate and regulated by six rules.
Surety
The Arabic term rahn, which means ‘surety’, is defined as giving something of value as security for a debt. Should the borrower fail to repay his debt, then the surety may be used or sold to repay the creditor [1] Its legitimacy is based on the Qur’anic verse that says in respect of loans that need to be documented:
‘And if you are on a journey and cannot find a scribe, then a security deposit [should be] taken.’
(2:283)
The fact that the verse mentions this in a case of travel is to highlight something that often happens. The Sunnah clearly indicates that giving something as surety is perfectly legitimate.
:A’ishah reports
‘The Prophet (peace be upon him) bought food from a Jew with payment deferred until a specified date and gave him an iron shield as a pledge of surety.’
Rulings:
1-It is not permissible to give as surety something that cannot be sold, such as an endowment or a dog, because this cannot be used to repay the creditor. Nor is it permissible to give in pledge something that the giver does not own.
2-It is essential to know the amount of the surety, its type and description.
3-The party giving the surety should be a person who is qualified to take such an action, the owner of the thing to be pledged or has the authority to give it as surety.
4-Neither the party giving the surety, nor the one accepting it, can dispose of the pledged article without the consent of the other party.
5-It is not permissible for the person taking the surety to benefit by the pledged article unless it is an animal that can be ridden or milked. In this case, it is permissible for him to ride it or take its milk, provided that he bears the cost of looking after it.
6-The pledged article is a ‘deposit’ for the party receiving it, and he only guarantees it in case of misconduct. When the time is due of repaying the debt that the article was pledged in surety for, the creditor must repay it. If he does not, the judge forces him to repay it. If he still refuses to pay, the judge may punish or imprison him until he has repaid. Alternatively, he may order the sale of the pledged article to repay the creditor.
references
- Ibn Qudamah, Al-Mughni, vol. 4, p. 326.