Is this riba?

[Samiun]

:sl: everyone hope you are all doing fine. Lately I've been paying for my accommodation fees additional amount because I didn't pay on time. Is this considered riba? They 'penalize' me for not paying after the day that was appointed to be paid and it keeps increasing(like week by week) by 30$ or 20$ if I don't pay it.

[Muslim Woman]

:wa:


don't know if it's riba but be careful next time and don't be late.

[ardianto]

:sl:

Islamic trading law recognize penalty for late payment which in sharia classified as "Uqubah Maliyah" (financial penalty/penalty on treasure). However, this penalty must meet specific conditions:

- Only for trading or lease/tenancy transaction.
- Cannot be implemented on loan, because penalty on late payment in loan is riba.
- The buyer or tenant must know about this penalty before do the transaction.
- The penalty must be in proportional amount compared with the amount that the buyer/tenant must pay if there's no overdue.

Hopefully this short explanation is useful for other people who face same case.