Key money

Question ID: 19219

Assalamu Alaikum Mufti saab.
My question is regarding key money – we previously owned a small block of flats/shops in Mumbai. The income is very small due to the government regulation that the owner cannot increase the rental, e.g. an occupier of a flat normally pays rental of rupees 200.00 per month (R40.00) per month for years on end. When a tenant vacates a flat, the agent normally request key money from the new tenant as a norm – approx. 12000.00 rupees (R2400.00). This is to compensate for the low return.
The question: is the key money In such cases permissible to use as rental income?

N.b. I did try to send this question before but it didn’t go through so im sorry if it comes through twice.

Jazakallahu khair

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Asked on February 6, 2016 2:06 pm
Private answer

State to the new tenant that rental is R2400,00 payable in advance.

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Answered on March 8, 2016 6:31 pm