Assalamualikum
Mufti sahab iam confused whether i shall take loan or not. i wish to purchase a plot which is aboout 80 lakhs . I have about 52 lakhs of money remaining 28 lakhs money i shall take from a person in a islamic way. we shall fix the rate of plot in square yards for 28lakhs which is 10 percent more. at the start of contract i shall take the money and purchase the plot on my name (registration) .For one year Installment i shall pay the person 31 lakhs.
Please answer me whether this method is sharia compliant financing or please explain me how shall i take the plot in islamic way.
Answer:
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
We commend you for seeking a Shariah compliant solution for your purchase of the plot.
There are few options in you executing the purchase in a Sharia compliant way:
If the landlord is willing to sell you the plot in different bits, the procedure would be that you purchase a portion for yourself for 52 Lakhs, the other remaining plot could be purchased either by
- The Financier himself at a sum of 28 Lakhs, take possession of it and then sell it to you for 31 Lakhs over a period of 12 months. This is a preferred method.
- Or you may purchase the plot on behalf of your financier; in this case you would be his agent. After having purchased the plot on behalf of your financier, you may inform him and at the same time make an offer of purchase to him. When your financier accepts the offer, the sale is concluded whereby the ownership as well as the risk of the commodity is transferred to the client/you. [1]
There are other financing modes as well. For more examples, you may refer to the following book: Introduction to Islamic Finance by Mufti Taqi Usmani (Hafidhahullah).
And Allah Ta’āla Knows Best
[Mufti] Safwaan Ibn Ml Ahmed Ibn Ibrahim
Darul Iftaa
Limbe, Malawi
Checked and Approved by,
Mufti Ebrahim Desai.
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[1] An Introduction To Islamic Finance – Mufti Taqi Usmani – Pg, 104-109 – Idaratul-Ma’arif