Answer
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
In this fatwa:
If the landlord refuses to postpone the collection of rent owed by their tenants, even after admonishing and advising the landlord to do so, we can take the view of allowing debt forgiveness to count against one’s Zakah as a concession and a means by which we can ease the hardship of insolvent tenants.
Answering your question, the Resident Fatwa Committee (RFC) of AMJA (Assembly of Muslim Jurists of America states:
Scholars have different views about counting forgiven debt against one’s zakah. The majority of scholars do not permit it for the following reasons:
1- First of all, the forgiver of the debt is in essence reviving his “dead money” (i.e., the bad debts) through Zakah.
2- And by doing so, he has made the right of Allah Almighty (i.e., the Zakah) a means by which he benefits himself.
3- He is also in essence using the Zakah alternative here as a means of recovering his own money fully and protecting his own wealth from any decrease.
4- It also causes the debt forgiver (in this case, the landlord) to be no different than the one who aims to give charity from his impure wealth (obtained through haram means) as opposed to giving it from his good, pure wealth (obtained through halal means).
5- And finally, “forgiving” debts is not the same as “giving” money to someone.
However, some Shafi`i jurists have said that it is permissible for a creditor to count debt that one forgives an insolvent debtor for against the Zakah money that the creditor owes. This opinion was mentioned by Imam An-Nawawi in his book Al-Majmu` (6/211). This is also the view of Imam Al-Hasan Al-Basri, Ataa, and Ibn Hazm, may Allah’s mercy be upon them all.
And no doubt, by taking the safer approach and not counting forgiven debt against Zakah, one avoids this controversy. It is indeed legislated for the lender who gives a loan in good faith to be patient with the insolvent debtor who is unable to repay the debt. Allah Almighty has said, {And if someone is in hardship, then [let there be] postponement until [a time of] ease. But if you give [from your right as] charity, then it is better for you, if you only knew.} (Al-Baqarah 2:280)
So it is preferred for the Muslim lender/creditor to forgive some, or all, of the insolvent debtor’s debts. By doing so, the creditor should expect the reward from Allah without counting this debt forgiveness against the Zakah money he owes.
However, looking at the widespread difficulties caused by this pandemic, and bearing in mind that:
1- The debtors (i.e., the tenants) will truly benefit by having their debts (i.e., the unpaid rent) forgiven, because it does contribute to covering one of their essential needs, which in this case is their own debt relief; and
2- It is possible that lenders (i.e., landlords) might attempt to seek the eviction of their tenants, or at the very least threaten and harass them with that possibility, for not paying the rent when due.
? Read Also: How to Calculate Zakah on Property Bought for Investment
It is for these reasons, the Committee feels that if the lender (landlord) refuses to postpone the collection of rent owed by their tenants, even after admonishing and advising the landlord to do so, we can take the view of allowing debt forgiveness to count against one’s Zakah as a concession and a means by which we can ease the hardship of insolvent tenants. Indeed, the Quran has referred to debt forgiveness as sadaqah (charity) in Surat Al-Baqarah: {But if you give [from your right as] charity, then it is better for you, if you only knew.} (Al-Baqarah 2:280)
Almighty Allah knows best.
Source: https://www.amjaonline.org/