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Goodwill

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Goodwill is among the new jurisprudential issues. It refers to an amount paid in addition to the rent to the landlord or the previous tenant in exchange for certain non-material privileges (such as limiting the authority of the lessor in the lease). Shi'a jurists consider receiving the Goodwill amount forbidden in some cases and permissible in others. Many jurists consider taking Goodwill under the title of "Right of Business and Profession" (Goodwill) to be illegitimate. They have considered taking Goodwill from the tenant at the beginning of the lease, or Goodwill taken by the tenant from the landlord in exchange for waiving the remaining lease period, to be consistent with certain Islamic contracts and valid.

The importance of this issue lies in the fact that renting a property based on the terms of the contract, under certain conditions, may cause loss or deprivation of one of the parties from the real value of the property. So receiving Goodwill is a solution to compensate for these losses. Some jurists have mentioned conditions for the validity of the Goodwill transaction, including the specified amount of Goodwill, the consent of both parties, and the puberty and maturity (rushd) of the transacting parties.

Jurists consider Goodwill to be transferable to heirs and capable of being bought and sold. The amount of Goodwill is based on agreement and is not limited to a specific sum.

Concept and Importance

Goodwill is the money that either the tenant or the landlord receives from the other or from a third party in exchange for the intangible benefits of the property.[1] This amount is separate from the rent or the mortgage (rahn) amount.[2] Some researchers have considered the "Right of Business and Profession" as a type of Goodwill. It is a right that a merchant, artisan, or tenant of a property has acquired as a result of attracting customers and their activity in their workplace, which has caused the appreciation of the property's value.[3] In contrast, others believe that Goodwill is different from the Right of Business and Profession.[4]

The differences between Goodwill and the Right of Business and Profession have been noted as follows:

  • Goodwill is usually paid to the owner or the previous tenant, but the Right of Business and Profession is paid to the current tenant.[5]
  • The origin of Goodwill is the contract, while the origin of the Right of Business and Profession is the law and the history of the tenancy relationship, such as a good reputation.[6]
  • Legally, the Right of Business and Profession is established when: 1. The place of business is commercial, 2. There is a lease contract, and 3. The tenant has achieved fame there.[7]

The importance of the issue of Goodwill is that it creates a priority right for the tenant to renew the lease.[8] Also, if a tenant makes a property famous through customer-oriented activity or by spending money, and the owner evicts them after the location's progress, it causes harm to the tenant. On the other hand, satisfying the tenant and ruling in their favour until their satisfaction is obtained leads to their usurpatory possession (ghaṣbī) and obliges the owner to an act outside the contract.[9] Goodwill has been considered one of the new jurisprudential issues[10] and among non-material and intangible properties; because although it has economic value, it is not perceived by the five senses, and the faculty of thought was not effective in creating it.[11]

Goodwill in Shi'a Jurisprudence

Shi'a jurists, considering the existence of various methods in the landlord-tenant relationship, have examined the legitimacy of Goodwill in various aspects.[12]

Legitimate Goodwill: Taking Goodwill from the Tenant at the Beginning or During the Lease

Some Shi'a jurists have permitted taking Goodwill from the tenant at the beginning or during the lease term.[13] Husayn al-Hilli, a contemporary jurist, in the book Buhuth fiqhiyya, considered receiving Goodwill by the owner at the beginning of the lease to be permissible.[14] Nasir Makarim Shirazi believes that the owner can receive an amount as Goodwill in exchange for the tenant having a priority right after the end of the lease term; in his view, in such a case, the tenant enjoys priority in renting even if offering a lower rent compared to others.[15] Mirza Jawad Tabrizi considers Goodwill permissible in a case where the property owner cannot raise the rent or evict the tenant for certain reasons.[16]

Goodwill from Tenant to Next Tenant for Waiving the Remaining Term

Jurists such as Imam Khomeini and Sayyid Muhammad Ali Alawi Gurgani have permitted Goodwill taken by a tenant from the next tenant for waiving the remaining term.[17] Husayn al-Hilli attributes the permissibility of Goodwill in this case to the fact that it can be applied to the contracts of Ju'ala, Sulh, or Hiba; in such a way that the new tenant gives an amount to the previous tenant as one of these contracts so that they do not compete with him in renting the property or do not consider themselves entitled.[18] Husayn Nuri Hamadani believes that there is no narration regarding the deduction of the ruling of Goodwill, except for a narration from Muhammad b. Muslim regarding "paying a bribe for Mubah acts", which covers this case of Goodwill. Nuri Hamadani considers this narration to be authentic in terms of chain of transmission and implication.[19]

Illegitimate Goodwill: Goodwill from the Owner for Attracting Customers and Reputation

A group of Shi'a jurists, by declaring the "Right of Business and Profession" illegitimate, believe that the tenant has no right to take an additional amount as Goodwill after the lease term ends (even if they caused the shop's popularity), and in case of non-renewal of the lease and the owner's dissatisfaction, they must vacate the premises.[20] According to Husayn al-Hilli, the reason for this ruling is that the owner has dominion over their property, and taking Goodwill from the owner conflicts with the owner's dominion over their property.[21]

Conditions and Specific Rulings of Goodwill

Experts have considered the observance of the following conditions necessary for the legitimacy of Goodwill:

  1. Agreement and consent of both parties.[22]
  2. Long duration of the lease contract.[23]
  3. The amount of Goodwill being known at the time of signing the contract.[24]
  4. Puberty and maturity (rushd) of both parties.[25]
  5. Existence of an exchange (ʿiwaḍ).[26] Based on this, in exchange for taking the Goodwill right, the landlord's powers in eviction and increasing the rent must be limited.[27]

Some Specific Rulings of Goodwill

According to researchers, the right of Goodwill is among the intangible property rights that have forced legislators around the world to accept and enact laws regarding it.[28] Some of the rulings stated by jurists in this regard are as follows:

Notes

  1. Jamʿī az Muḥaqqiqān, Farhang-i Fārsī-yi fiqh, 1387 Sh, vol. 4, p. 440; ʿAlī-Nūrī, Kulliyyāt-i fiqh-i Islāmī, 1383 Sh, p. 170; Kishāwarz, Barrasī-yi taḥlīlī-yi qānūn-i jadīd-i rawābiṭ-i mūjir wa mustaʾjir, 1384 Sh, p. 117; Ṭāhirī Sartishnīzī, "Gudharī bar mālikiyyat-i amwāl-i ghayr māddī-yi ghayr fikrī dar ḥuqūq-i Īrān", p. 167.
  2. ʿAlī-Nūrī, Kulliyyāt-i fiqh-i Islāmī, 1383 Sh, p. 170; Kishāwarz, Barrasī-yi taḥlīlī-yi qānūn-i jadīd-i rawābiṭ-i mūjir wa mustaʾjir, 1384 Sh, p. 117.
  3. Kishāwarz, Barrasī-yi taḥlīlī-yi qānūn-i jadīd-i rawābiṭ-i mūjir wa mustaʾjir, 1384 Sh, p. 117; Bīgdilī, "Naqdī bar sarqafli wa ḥaqq-i kasb wa pīsha wa tijārat dar qānūn-i rawābiṭ-i mūjir wa mustaʾjir-i", pp. 56-57; Shīrī, "Sarqafli; taḥlīl-i māhiyyat wa aḥkām-i ān dar fiqh-i Imāmiyya wa niẓām-i ḥuqūqī-yi Īrān", p. 104; See: Ḥillī, Buḥūth fiqhiyya, Muʾassisat al-Manār, p. 147; Malikzāda, "Sarqafli ḥaqq-i kasb wa pīsha bā rūykardī bi dīdgāh-i Imām Khumaynī", pp. 141-142.
  4. Jaʿfarī Langarūdī, Mabsūṭ dar terminoloji-yi ḥuqūq, Ganj-i Dānish, vol. 3, p. 1707; Bīgdilī, "Naqdī bar sarqafli wa ḥaqq-i kasb wa pīsha wa tijārat dar qānūn-i rawābiṭ-i mūjir wa mustaʾjir-i", pp. 56-57; Shīrī, "Sarqafli; taḥlīl-i māhiyyat wa aḥkām-i ān dar fiqh-i Imāmiyya wa niẓām-i ḥuqūqī-yi Īrān", pp. 107-109.
  5. ʿAbdīpūr-Fard, "Rūykardī taḥlīlī bi māhiyyat-i ḥaqq-i kasb yā pīsha yā tijārat wa ḥaqq-i sarqafli", pp. 106-111.
  6. ʿAbdīpūr-Fard, "Rūykardī taḥlīlī bi māhiyyat-i ḥaqq-i kasb yā pīsha yā tijārat wa ḥaqq-i sarqafli", pp. 106-111.
  7. ʿAbbāsī Dākānī, "Barrasī wa muqāyisa-yi ḥaqq-i sarqafli bā ḥaqq-i kasb yā pīsha yā tijārat", p. 86.
  8. Makārim Shīrāzī, "Ḥudūd-i ikhtiyārāt-i mālik dar sarqafli", Official website.
  9. Bajnūrdī, "Sarqafli", p. 34; Muṭahharī, Muqaddama-ī bar iqtiṣād-i taṭbīqī, 1401 Sh, pp. 118-119.
  10. Bajnūrdī, "Sarqafli", p. 33; Shīrī, "Sarqafli; taḥlīl-i māhiyyat wa aḥkām-i ān dar fiqh-i Imāmiyya wa niẓām-i ḥuqūqī-yi Īrān", p. 107.
  11. Ṭāhirī Sartishnīzī, "Gudharī bar mālikiyyat-i amwāl-i ghayr māddī-yi ghayr fikrī dar ḥuqūq-i Īrān", p. 160.
  12. See: Shīrī, "Sarqafli; taḥlīl-i māhiyyat wa aḥkām-i ān dar fiqh-i Imāmiyya wa niẓām-i ḥuqūqī-yi Īrān", pp. 105-107; Bajnūrdī, "Sarqafli", p. 33.
  13. Tabrīzī, Tawḍīḥ al-masāʾil, 1382 Sh, p. 441; Makārim Shīrāzī, "Ḥudūd-i ikhtiyārāt-i mālik dar sarqafli", official website; Ḥillī, Buḥūth fiqhiyya, Muʾassisat al-Manār, pp. 151-154.
  14. Ḥillī, Buḥūth fiqhiyya, Muʾassisat al-Manār, pp. 151-154.
  15. Makārim Shīrāzī, "Ḥudūd-i ikhtiyārāt-i mālik dar sarqafli", official website.
  16. Tabrīzī, Tawḍīḥ al-masāʾil, 1382 Sh, p. 441.
  17. Khomeinī, Tawḍīḥ al-masāʾil, p. 429; ʿAlawī Gurgānī, Tawḍīḥ al-masāʾil, p. 490.
  18. Ḥillī, Buḥūth fiqhiyya, pp. 150-151.
  19. Nūrī Hamadānī, "Sarqafli", pp. 55-57.
  20. Dūzdūzānī, Risāla-yi tawḍīḥ al-masāʾil, p. 532; Khumaynī, Risāla-yi tawḍīḥ al-masāʾil, p. 428; Sīstānī, "Sarqafli"; Waḥīd Khurāsānī, Risāla-yi tawḍīḥ al-masāʾil, p. 569; ʿAlawī Gurgānī, Tawḍīḥ al-masāʾil, p. 490; Makārim Shīrāzī, "Ḥukm-i muṭāliba-yi ḥaqq-i kasb wa pīsha", official website.
  21. Ḥillī, Buḥūth fiqhiyya, pp. 150-151.
  22. Bārīklū, "Taḥlīl-i fiqhī ḥuqūqī-yi sarqafli dar qānūn-i mūjir wa mustaʾjir-i", pp. 199-202; Makārim Shīrāzī, "Sarqafli chi sharāyiṭī dārad?", official website.
  23. Khumaynī, Taḥrīr al-wasīla, 1379 Sh, p. 982; Bārīklū, "Taḥlīl-i fiqhī ḥuqūqī-yi sarqafli dar qānūn-i mūjir wa mustaʾjir-i", pp. 199-202.
  24. Makārim Shīrāzī, "Sarqafli chi sharāyiṭī dārad?", official website.
  25. Makārim Shīrāzī, "Sarqafli chi sharāyiṭī dārad?", official website.
  26. Bārīklū, "Taḥlīl-i fiqhī ḥuqūqī-yi sarqafli dar qānūn-i mūjir wa mustaʾjir-i", pp. 199-202.
  27. Bārīklū, "Taḥlīl-i fiqhī ḥuqūqī-yi sarqafli dar qānūn-i mūjir wa mustaʾjir-i muṣawwab-i", pp. 207-208.
  28. Sayfī-Zaynāb, "Sarqafli dar ḥuqūq-i Īrān", pp. 197-198.
  29. Saʿdī, "Dars-i khārij-i fiqh-i ustād Ḥusaynʿalī Saʿdī", Website of Madrasa-yi Fiqāhat.
  30. ʿAbdīpūr-Fard, "Rūykardī taḥlīlī bi māhiyyat-i ḥaqq-i kasb yā pīsha yā tijārat wa ḥaqq-i sarqafli", p. 101.
  31. Khumaynī, Risāla-yi tawḍīḥ al-masāʾil, p. 429.

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