عربي
06 Jamadi al-Awwal 1444  ,  30 November 2022

*Fatwa and Sustainable ... Date Added: 31-10-2022

Iftaa` Department and the ... Date Added: 25-10-2022

Achievements of Iftaa` ... Date Added: 23-10-2022

Fatwa is Accepted only from ... Date Added: 19-10-2022

"The Role of Religious ... Date Added: 09-11-2022

If a Man Fights or Abuses ... Date Added: 02-11-2022

The Prophet`s Birth ... Date Added: 02-11-2022

Scary Questions about ... Date Added: 01-11-2022

Search Fatawaa


Subject : A Form of Land Investment

Fatwa Number : 3454

Date : 28-01-2019

Classified : Current Financial Issues

Fatwa Type : Search Fatawaa


Question :

A landowner and an investor have reached an agreement whereby the owner shall offer a plot of land to the investor on basis of a power of attorney that extends until the end of the intended project. In return, the investor shall pay the sum of one million and two hundred and fifty JDs, via cheque cashable after two years from its date, as the price of that land. However, that price shall remain fixed regardless of any rise in land prices. The purpose behind the two-year period is giving the investor the opportunity to build residential flats and sell them. The latter shall also cover all the needed expenses. Moreover, any party that fails to fulfill the terms of this agreement shall pay, to the other party, the value of all the damages resulting from that, in addition to (9%) as an interest, effective from the date of the agreement. What is the ruling of Sharia on this?



The Answer :

Praise be to Allah, the Lord of the Worlds.


After reviewing the provisions of the aforementioned agreement, it was found out that it is more of a conditional sale, but, according to scholars, it is prohibited. While stating the conditions for valid sale, Ibn Hajar said, "Sale shouldn`t be bound by a certain time, be it a lifetime or a thousand years….Also, it shouldn`t be bound by a condition."{Tohfat al-Mohtajj, 4/225}.


In addition, amongst the modern conditions of sale is registration at government departments, whether via transfer of property, or irrevocable special power of attorney. However, this was lacking in the above agreement. In addition, this agreement included a form of usury as it is conditioned that the party, which fails to fulfill the terms of the agreement, shall pay (9%) as an interest to the other party.


In conclusion, both parties must either amend the terms of this agreement by turning it into a valid sale contract, along with removing the conditions that render it invalid, or turn it into a partnership that meets all the conditions stipulated in Sharia. And Allah knows best.







Comments

 

Name *

E. mail Address *

Country

Comment Title *

Comment *

Captcha
 
 

Warning: this window is not dedicated to receive religious questions, but to comment on topics published for the benefit of the site administrators—and not for publication. We are pleased to receive religious questions in the section "Send Your Question". So we apologize to readers for not answering any questions through this window of "Comments" for the sake of work organization. Thank you.