Shariah compliant best practice tenancy management framework for commercial Waqf properties

Abstract

Commercial waqf property (CWP) is seen as a catalyst for fulfilling the waqf philosophy provided that the waqf properties are well managed and able to produce a good income stream. However, a number of problems were highlighted in waqf tenancy management practices such as lack of adherence to Shariah principles. In fact, there was also ambiguity on Shariah and waqf tenancy management attributes in terms of tenant selection, default rent and penalties. The arising issues need to be addressed by adopting the best practice tenancy management (BPTM). However, BPTM adopted by CWP shall coincide with Islamic principles and waqf needs. Therefore, the objectives of this study are to determine the tenancy management attributes based on the best practice, waqf needs and Shariah compliance and to investigate the tenancy management practice for CWP in Malaysia. A framework of Shariah Compliant Best Practice Tenancy Management (SCBPTM) for CWP is developed using a WaqfServ Dimension by integrating BPTM, waqf needs and Shariah compliance. The framework was developed to achieve Shariah compliant tenancy management, sustainable income generation and tenant satisfaction. This study employed a case study approach. Data were collected using document review, focus group discussion, in-depth interviews and in-situ observation. Semi-structured interviews were conducted with waqf property managers and tenants to investigate the compliance of Shariah, adherence to waqf needs and the issues of tenancy management.. The findings revealed that BPTM of tenant selection, rental charged, duration, early termination and rental distribution were not adopted as it did not meet the waqf needs. Furthermore, BPTM of penalty was not adopted since it was not Shariah compliance. It can be deduced that the full spectrum of BPTM could not be fully adopted by the waqf properties since waqf properties have their own special characteristics. Overall, this framework is deemed feasible in waqf tenancy management in Malaysia as concurred by the experts. The framework is expected to contribute to the waqf institutions including State Islamic Religious Council (SIRC), Department of Awqaf, Zakat and Hajj (JAWHAR), Yayasan Wakaf Malaysia (YWM), waqf stakeholders, investors, professional property managers and researchers. Furthermore, the framework could assist to improvise the CWP to be at par with the conventional building management while Shariah principles are being fully observed in the full spectrum of waqf tenancy management.