Misconception #8:
We have a shariah board of scholars who have approved our program.

With all due respect to every scholar, there is no scholar who is above making mistakes and our final guide must be the Quran and Sunnah. There are scholars who have allowed for interest-based loans from any bank at any time, but that does not make such an opinion correct or acceptable to the majority of scholars, and it certainly cannot withstand scrutiny according to the Quran and Sunnah.

Scholars who render opinions in contradiction to the consensus of previous and current scholars, and in conflict with the letter and spirit of Quran and Sunnah, must provide their shariah basis for such rulings and be able and willing to respond to every critic. The fact that a given scholar is on a paid Shariah board, and stands to gain from rendering an opinion favorable to the company that employs him, creates a conflict of interest. This is not to say, that every paid scholar is wrong, but to say that when there is a conflict of interest coupled with a ruling that contradicts a sound Shariah basis, such a decision must demonstrate compelling support from valid sources.

Misconceptions 101:
Try to figure out what the program does!

As consumers have become more educated about existing programs, they have become more attuned to the many ways used to obfuscate a mortgage or interest bearing loan. One common tactic is to create a program by taking rights and responsibilities from a variety of legitimate shariah arrangements and combining them into one contract. The most common combo-scheme that is used to justify the fact that you owe money if you stop renting (or end the partnership) is the "Promise-to-Buy / Co-ownership / Rent-to-Own".  While this may sound like a legitimate combination on the surface, upon analyzing it further it is clear that it is no different than other programs.  In reality, the rights and responsibilities of the newly created combo scheme are those of a lender/borrower relationship and satisfy none of the shariah requirements.

In a "Promise-to-Buy / Co-ownership / Rent-to-Own" combo, the Promise-to-Buy is the basis for you owing money, and the Co-ownership / Rent-to-Own is the basis for collecting "profit" or "rental" from you. However, a legally binding Promise-to-Buy by itself is a legitimate Murabaha agreement, with a payment plan based on an agreed upon selling price that is the total of all payments.  Of course, all the required qualifications of a Murabaha arrangement must be observed. 

That agreement makes you the homeowner, which is confirmed by the fact that you are solely responsible for all expenses, losses and gains related to the home.  So the question then becomes, if you are the homeowner and you carry all the expenses, responsibility and loss or gain from the property, then what is the role of the "Co-ownership" and what are they collecting rent for?You cannot be a committed buyer paying on installments for the whole property, and the ONLY owner bearing all responsibilities, expenses and losses; and at the same time renting what you already own.

Again, the simplest and soundest way to know exactly what you are dealing with is to make a tally of your rights and responsibilities for each role you play (renter / buyer / co-owner) and one for each of the program provider's roles. For each identity, the rights and responsibilities must be fulfilled independent of the rights and responsibilities of another. The program provider also has rights and responsibilities and they should not look anything like an interest-collecting lender who is giving you money with an obligation on your part to pay it back at a total that exceeds the amount you were given.