Generally, ba’i (or sale) involves the transfer of ownership against payment of the thaman (price), while ijarah is based on the transfer of usufruct (manfa’ah) in return for ujrah (rental). In other words, in ijarah the leased property or item remains in the ownership of the lessor and only its usufruct is transferred to the lessee for a specified period of time. Technically, ijarah is a sale contract as it involves the sale of usufruct, i.e., the right to use a property for a specific period of time. In contrast, a sale involves the transfer of ‘ayn (property) and its usufruct altogether (the usufruct is said to be transferred once and for all). The shari’a rules and precepts regarding sales closely apply to ijarah.

Ijarah can be combined with sale in a contract known as ijarah thumma al-ba’i (also ijarah muntahia bittamleek), in which the ownership of the leased property is transferred to the lessee at the end of ijarah tenor according to specific terms and conditions. In this type of hybrid ijarah, the lessee has an option to purchase the leased property at the expiration date of ijarah. Therefore, it comprises two separate contracts: a contract of lease and a successive contract of sale. For example, a leasing company may purchase a vehicle based on a promise from its customer who takes it on lease and undertakes to purchase it at the end of the lease period. During the ijarah period, ownership is not passed on to the lessee, i.e., the lessor assumes the ownership risk during that period. This includes insurance costs and maintenance expenses, etc.