Praise be to Allah.
In reality, this transaction is what is called a murabahah transaction for the one who instructs another party to buy something for him.
We have previously explained that this kind of transaction is permissible if it meets two conditions:
1.. That the bank takes possession of the house before selling it to the employee, so it buys the house for itself in a genuine purchase before selling it to the one who wants to buy it.
2.. That the bank takes possession of the house before selling it to the customer, in the sense that the seller empties the house and enables the bank to take possession of it.
If the transaction does not meet these two conditions or one of them, the transaction is prohibited.
It says in Qararat Majma` al-Fiqh al-Islami: In a murabahah transaction for the one who instructs another party to buy something for him, if it involves buying an item after it comes into the ownership of the one whom the purchaser asked to buy it for him, and that party took possession of it in the manner required according to Islamic teachings, it is a permissible transaction, so long as the one who was asked to buy it is liable for any damage that occurs before it is delivered, and he should agree to accept return of the item if it turns out that there is a hidden defect in it or there is any other reason for which it may be returned after delivery; and provided that the conditions of buying are met and there are no impediments to this transaction.(Majallat al-Majma`, 5/2/753, 965).
As the bank fears that if it buys the house, the employee of the company may change his mind about buying it, as a result of which the bank would be harmed, so when buying the house, the bank stipulates that it should have the option of cancelling the deal within a specific timeframe, and it has the right to return the items sold (the house) and cancel the deal within that period – such as twenty days, for example – there is nothing wrong with that, because selling an item with the option of cancelling the deal is a proper kind of transaction.
The scholars (may Allah have mercy on them) have stated that such transactions are permissible.
It says in Al-Mabsut by as-Sarkhasi (30/237):
A man instructed another man to buy a house for one thousand dirhams, and told him that if he did that, the one who instructed him to buy it would buy it from him for one thousand and one hundred (1,100). But the one who was instructed to do that was worried that if he bought it, the one who had instructed him would not want to buy it. He said: Let him buy the house on the basis that he has the option to cancel for three days, and take ownership of it, then let the one who instructed him to buy it go to him and tell him: I will buy it from you for one thousand and one hundred, to which the one who was instructed to buy it should say: I agree… But if the one who instructed him to buy it does not want to go ahead with the purchase, the one who was instructed to buy it for him can return it to the first owner on the basis of the option to cancel. By doing this, he can ward off harm from himself. End quote.
Ibn al-Qayyim (may Allah have mercy on him) noted that there were some loopholes that are permissible to use, which will enable a person to get his rights without going against Islamic teachings. He said:
Example 101: A man says to someone else: Buy this house or this item from So-and-so for such and such an amount, and I will give you a profit of such and such for it. But the other man is worried that if he buys it, the one who told him to buy it for him may change his mind and not want it, and he will not be able to return it. The loophole is that he may buy it and stipulate that he has the option of cancelling the deal for three days or longer. Then he can say to the one who instructed him to buy it: I have bought it for the amount that you mentioned. Then if he buys it from him, all well and good, otherwise he will be able to return it to the original seller on the basis of the option of cancelling the deal.(I`lam al-Muwaqi`in, 4/29).
It says in Qararat al-Hay’at ash-Shar`iyyah li Bank al-Bilad (guideline no. 12):
It is permissible for the bank, in a murabahah contract when buying an item from the first seller, to buy it with the condition that it has the option of cancelling the deal, lest the customer change his mind. Then [the bank] can offer it to the one who instructed it to buy the item during the stipulated timeframe, and offering it to him does not invalidate the option of cancelling the deal. Then if the person who instructed the bank to buy it wants to go ahead with the purchase, all well and good, otherwise the bank can return it to the first seller. End quote.
But if the bank does not buy the house from its owner – rather it makes a deal with him stating that the bank is interested in buying the house and obliges the owner not to sell the house to anyone else during the agreed-upon period – this agreement does not mean that the house becomes the property of the bank, so if the bank sells it to the employee after that, then the bank has sold the house before taking ownership of it, and this is prohibited, as noted above.
And Allah knows best.
Comment