Answered by Mufti Mohammed Tosir Miah
In North America, when we start a masjid project, we collect a large amount of money. A deposit or line of credit is deposited with the city to ensure that the project meets all city requirements. The city pays interest on this money. Rest of money is deposited in term deposits and interest is paid on this too. We have been told that in a fatwa book – Fatawa Rahimiyyah-Vol 9- Baab:Ahkamul Masaajid wal Madrasah -Page 214 there is a fatwa that this interest money can be used for paying for building permits ,paperwork and costs associated with building the masjid! I am very uncomfortable with this interpretation and I would like a clear opinion on this as soon as possible.
The recipients of interest money are the poor and destitute. Some scholars have said that one may use the interest money to make toilets for the poor or to repay an interest based loan. However, it is preferable to give interest money to the poor without the intention of reward (thawab). (Raddul Muhtar p.553 v.9 & Jadeed Fiqhi Masaail p.406 v.1)
In Fatawa Rahimiyah it says that interest money received for the mosque money which is deposited in to the banks, should be used for the toilets of the Masjid or given to pay of the various taxes which are levied on the Masjid. If that is not possible, then it should be given to the poor. (Fatawa Rahimiyah p.197 v.9)
Interest money should not be used for the paperwork and on the administration side of the Masjid.
On the reference you gave me I could not find the ruling where Mufti Abdur Rahim Lajpuree said you can use interest money for the paperwork of the Masjid.
Only Allah Knows Best
Mohammed Tosir Miah
Darul Ifta Birmingham
This answer was collected from DarulIftaBirmingham.co.uk, which is run under the supervision of Mufti Mohammed Tosir Miah from the United Kingdom.