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Constructing Houses in Return for Installments is Permissible

I work in the construction business. One customer asked me to build him a house estimated at (100 square meters). The approximate cost is (15000) and I have to deliver it after its completion. He stipulated giving (3000 JDs) as down payment and the rest as monthly installments. What is the ruling of Sharia on this kind of contract?

Answer:

All perfect praise be to Allah the Lord of the Worlds. May Allah`s peace and blessings be upon our Prophet Mohammad and upon all his family and companions.

Istisna’ means asking someone to construct, build or manufacture an asset. In Islamic finance, istisna' is generally a long-term contract whereby a party undertakes to manufacture, build or construct assets, with an obligation from the manufacturer or producer to deliver them to the customer upon completion.

According to the Hanafi school of thought, this contract is permissible provided that the specifications of the manufactured asset are agreed upon to avoid any disputes upon delivery. Thus, the specifications of the house should be given in details, the type of the tools used during constructing and finishing it , and the contractor should perfect his work and advise the customer to the best course of action in that regard.

Moreover, there is nothing wrong with delaying the whole price or giving it in installments with specified deadlines agreed upon by contracting parties. And Allah the Almighty knows best.

This answer was collected from the official government Iftaa Department of Jordan.

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