What is the ruling on using the home purchase plan service from Masraf Al Rayan, whereby the bank purchases the entire property, then sells a portion of it to the client and leases the remaining portion to him at a rent based on a standard percentage, which makes it similar to a mortgage, while the client wishes to avoid any suspicion of usury (riba)?

Diminishing Musharakah is defined as an agreement between two parties to establish a joint ownership company that concludes with the gradual transfer of one partner's share to the other through independent and successive sales contracts.

Regulations of Diminishing Musharakah: 1. Three separate contracts must be executed: a- The bank and the client jointly purchase the property as co-owners, or the bank purchases the property then sells a portion of it to the client. Both parties bear the responsibilities of ownership (insurance, maintenance, taxes, transfer fees) and the risks of property damage in proportion to their ownership shares. b- The bank leases its share of the property to the client, and the rental value decreases as the client purchases the bank's shares. c- The client gradually purchases the bank's share based on a non-binding promise from both parties. A sales contract must be concluded each time a share is acquired.

2. It is not permissible to pledge to purchase the shares at their initial value when the project begins (guaranteeing the partner's capital). Rather, the sale must be at the market price or the price agreed upon at the time of sale, to share in profit and loss.

3. Standardized rent linkage: It is permissible to link the rent to a specific index or increase it annually, provided that the rent is known at the beginning of each period.

4. It is not permissible to impose maintenance and insurance expenses solely on the client, as this contradicts the essence of Musharakah, which is based on sharing in profit and loss. Instead, these expenses must be borne by the partnership in proportion to the shares. It is also not permissible to stipulate maintenance on the tenant due to the uncertainty of the rent.

If the Musharakah adheres to these regulations, there is no objection to it.