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Ribbis in rental contract


Hi, I’m about to take out a contract to rent a house. The rental is being managed by a letting agent, but I believe that the owner of the house is Jewish.
I know that late fees etc., do not constitute a problem of Ribbis if they are a one-time fee which do not increase. The question is, if the contract specifies that interest will be payable if the fee is not received on time, or if the rent is not received on time then I will have to pay interest which increases with time, does it make it ossur for me to sign the contract?
If yes, do you have any way for me to get round the problem and make it permissible to sign?
Thank you


Thank you for your question.

There are one of two ways to get around this issue. Either by signing a heter iska with the owner of the house, (if you can get a hold of him, and he will understand what a heter iska is and agree to it).  However, this doesn’t seem to be all that practical. There is however another solution.

By changing the wording in the contract, in a way that the landlord will be guaranteed to get his money on time, even though he technically isn’t getting an accruing interest. You can stipulate in the contract that if the rent is paid late by a number of days, (which is the norm in rental contracts) that you will pay a one-time fine, and the amount of the fine can even be large. It can even be the amount that it would have been, if it would be calculated as rising interest, for example if the interest on late payment would be 10% more than the rent on a $2,500 rent, you can agree that if the rent is more than five days late for any particular month, that you have a one-time fee of $250. Additionally, this one-time fee will apply again for the payment of the next month if it will be late. It can further be stipulated that the money for one month i.e. January will not be accepted until December and it’s one- time fine is paid up. This way the renter will have no fear that you might not pay one month’s rent or that you will be late in paying up the one-time fine, because the next month you will have to pay two one-time fines, December’s and January’s.

Although this would mean changing the wording in the contract, the renter will not be losing out at all.

I hope it works well for you.

Best wishes




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