964. A Borrowed Lulav
137:7 The hadas used for the mitzvah may not be smelled the entire week of Succos, not even on Shabbos, but the esrog may be smelled on Shabbos. When smelling the esrog, one recites the bracha "haNosein rei'ach tov bapeiros," that G-d gives fruits their pleasant fragrances. On the rest of the days of Succos, one should not smell the esrog, even when not using it to fulfill the mitzvah, because there is a doubt about whether or not the bracha would be required.
The lulav may not be handled on Shabbos, not even to use it or its place, because it is muktzeh. The esrog may be smelled on Shabbos so it is not muktzeh and it may be handled. It is permitted to return the esrog to the protective padding that it was in before yom tov because it has already absorbed the fragrance. One may not, however, put the esrog in new cotton or a cloth because this would be considered perfuming it with the scent of the esrog.
137:8 On the first day of yom tov, one does not perform the mitzvah with a lulav or any of the other species that were borrowed. It must belong to him as per Leviticus 23:40, "take for yourself on the first day." "For yourself" is understood to mean "belonging to you," and excludes borrowed species. Those who live outside Israel and who keep two days of yom tov also do not recite a bracha over borrowed species on the second day of yom tov. If one person gives the species to another as a gift, even with the stipulation that they must be returned, it is still considered a gift and the mitzvah can be fulfilled with such a set. Even if he gave them without any instruction in order to perform the mitzvah, it is understood that it is a gift with the condition that it be returned. (If the person lending it does not know the halacha, then we cannot assume that he had the proper intentions in mind and the borrower has not fulfilled his obligation – Mishnah Brurah 649:15.) If the husband is not at home and the wife wants to give the four species to someone else to perform the mitzvah, the validity of the "gift" depends on whether or not the husband would have done such a thing had he been there.