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The share of each partner in the sale of a property

Answered according to Hanafi Fiqh by Muftionline.co.za
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Q: We buy some property. One partner only gives 10 lacs while others give 50 lacs. Before selling the property we say to 10 lac partner that we will give you 20000. After selling the property we give him 20000 to him. We fixed the amount before selling the property. Is it halaal or sood?

Bismillaah

A: If the property was bought without the intention of resale (e.g. for acquiring rental), then each partner will be a shareholder of the property in proportion to his capital investment. If the property is sold thereafter, each partner will receive a percentage of the profits in accordance to his capital investment. For example, if one partner invested 10% of the entire building, then he should receive 10% of the profits. Hence, if the partner who invested 10 lacs is given 20000 and this amount is less or more than his capital investment, it will not be permissible.

However, if the property was bought with the intention of resale, then since this is a business partnership, each partner will receive from the profits according to the mutual agreement of the partnership. Example, if it is agreed that the partner who invested 10% capital of the building should receive 20%, it will be permissible with mutual agreement if all the partners are active in the partnership. In this case, if there was no mutual agreement regarding the percentage of profit sharing, then each partner will receive profits according to his capital investment.

And Allah Ta’ala (الله تعالى) knows best.

 

Answered by:

Mufti Zakaria Makada

Checked & Approved:

Mufti Ebrahim Salejee (Isipingo Beach)

This answer was collected from MuftiOnline.co.za, where the questions have been answered by Mufti Zakaria Makada (Hafizahullah), who is currently a senior lecturer in the science of Hadith and Fiqh at Madrasah Ta’leemuddeen, Isipingo Beach, South Africa.

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