Buys House for Sister Through his Company with Interest
Fatwa No: 83762

  • Fatwa Date:31-1-2002 - Thul-Qi'dah 18, 1422
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Question

My youngest sister does not have a house and is also not financially well off. She is living in a rented apartment and at the same time finds it difficult to pay the rent. A friend of my brother in law has given them his apartment on rent. Since they cannot afford it, they pay the rent after several months. Since it is the obligation of my brother in law's friend, (let's call him Mr. X), he comes to their house too often. My sister is too beautiful, I do not like it but since he helps them a lot and especially the apartment is his, they cannot be rude to him. They cannot afford deposit of another house if they leave this apartment. I do not like this situation and want to help them. My company offers assistance in buying a house or an apartment by paying the markup. I can take a loan from any financial institution on the purchase of an apartment and the company will pay the markup. Is markup interest or not? I am not clear. Under the circumstances, can I take a loan to help her to get out of this obligation? If I take a loan from a bank, I will have to pay the principal and the interest and then on submission of receipt of payment, my company will reimburse the mark up amount. I need a Fatwa as to whether under these circumstances, such loan and payment and reimbursement of markup would be allowed under Islamic Law. Kindly advise.

Answer

All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad  sallallaahu  `alayhi  wa  sallam ( may  Allaah exalt his mention ) is His slave and Messenger.

 

In reality, Riba (interest and usury) is one of the major sins and the worst crimes in the sight of Allah. So, it is strictly forbidden to deal in Riba except in a dire need; a need that cannot be satisfied through other ways.

The transaction you mentioned is, without a doubt, a form of Riba. Even if the company pays the interest, this does not make that permissible. Because the prohibition of Riba covers each and every party and transaction related to such an activity.

In this regard, Jaabir, may Allah be pleased with him, narrated that the Prophet  sallallaahu  `alayhi  wa  sallam ( may  Allaah exalt his mention ) said “Allah has cursed the one who consumes Riba (i.e. usury or interest), the one who gives it to others, the one who records it and the one who witnesses it (its transaction).” He  sallallaahu  `alayhi  wa  sallam ( may  Allaah exalt his mention ) added: “All of them are equal in sin.” [Muslim]

No doubt that the relation of the witness on Riba transaction and its writer is weaker than that of the one who concludes the contract itself. So, the latter is more deserving the curse since he committed the sin directly.

Thus, we state that you have to avoid such a transaction. In addition, your sister's state can be solved through renting another house and avoiding mixing with the present owner as well as preventing him from entering the house if any forbidden act is possible.

Anyway, since you can rent a house by avoiding any forbidden act, then you are not allowed to deal with such a transaction as you described.

Allah knows best.

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