Question
I would be grateful if you could assist me in my business on the issue of Riba and the following hadith:
Jaabir (R.A) said: The Messenger of Allah (blessings and peace of Allah be upon him) cursed the one who consumes Riba and the one who pays it, the one who writes it down and the two who witness it, and he said: they are all the same.
In my mind the bolded section could very well apply to my business – we run a real estate company. Most transactions are funded by the bank at the request of the buyers. Our process is as follows:
1. The agents assists the buyers to complete the following clause on our contract:
MORTGAGE BOND
If required by the Purchaser this offer is subject to the Purchaser’s application for a loan being approved by a bank or other financial institution on its standard terms and conditions for an amount of R………………………………………………………… […………………………………………………………………………………………………………………………………………….(in words)] or such lesser amount as may be acceptable to the Purchaser by no later than …………………………………………. . Such loan/bond shall be applied for forthwith by the Purchaser to a Bank or Financial Institution and approval must be confirmed in writing by such Bank or Financial Institution by no later than the date as aforesaid, or within such extended period as the Agency may in their sole discretion allow. Upon demand, the Purchaser shall provide the Agent and/or Agency with all the information and/or documentation required by the financial institution(s) for the purposes of considering and/or approving such bond application. Failure to do so shall constitute a breach of this agreement and shall entitle the Seller to regard the aforesaid suspensive condition as having been fulfilled.
2. We would facilitate the home loan process by collecting the banks required documents from the purchaser then forwarding the required documents to a bond originator who will apply for a home loan to all major banks on the buyers behalf. Most of our buyers are uneducated about the home loan process so this process is the most convenient for them. It also allows us to manage the process by directly communicating with the bond originator.
Respectively, my questions are as follows:
1. If the agents complete the mortgage bond clause above, will they be considered as the one who writes it down in terms of the above hadith. If the answer is in the affirmative will it be sufficient if the buyer completes the clause themselves, if not what process should be followed;
2. Is it permissible to assist the buyer in obtaining a loan as described in 2 above. In the event that it is impermissible may we:
i) Provide the bond originator’s/banks contact details to the buyer and/or
ii) Provide the buyers contact details to the bond originator/bank.
Answer
Answer one:
Yes, if the agents complete the mortgage bond clause mentioned in the query, they will be considered as the ones who write down the interest transaction as mentioned in the Hadith of Sahih Muslim which you cited. If the buyers complete the clause themselves then the agent will still have to submit the documents to the bank/bond originator. Therefore, despite the fact that in this case the agents will not be considered as the ones who write interest, however they will be assisting in sin. This will be further elucidated under answer two. The agents will also be classed as those who witnessed an interest transaction, who is also cursed in the Hadith, since they will have to do some signing on the documents to confirm that this person is purchasing the house.
Answer two:
It is not permissible to assist the buyer in obtaining a loan as mentioned in clause number two in the query. It will also not be permissible to provide the bond originator`s/bank`s contact detail to the buyer and vice versa. The contact details of the bank and any other financial institutions are readily available for all and sundry to obtain. Hence there is no need for the agents/agency to furnish the buyer with such details. Most, if not all people who venture to purchase a house are of some financial standing, on account of which they have dealings with a bank or another financial institution. Hence they themselves will be able to contact their bank etc. for financing to purchase the house. Furnishing details of concerned parties in such transactions, so as to initiate the transaction is also assisting in sin and doing so is prohibited in Islaam. Allah Ta’aala mentions:
“Help each other in righteousness and piety, and do not help each other in sin and aggression. Fear Allah. Surely Allah is severe at punishment.”
Surah 5:2
It is for this very reason that the Hadith which you cited has been narrated by Rasulullah Sallallahu Alayhi Wa Sallam, it explicitly shows that merely witnessing the interest transaction and writing it down renders the person just as culpable as those who give and receive the interest. In the light of this, we say, that all forms of assistance rendered by the agency in order for the buyers to obtain an interest bearing loan are prohibited and must be avoided. The buyers should source their own finance and arrange a cash purchase from the agency. Therefore, we strongly suggest that the agency should not assist in any way with mortgage bond financing.
Checked and Approved By:
Mufti Muhammed Saeed Motara Saheb D.B.
References
صحيح مسلم – باب لعن آكل الربا ومؤكله
(٨ ٩ ١٥) حدثنا محمد بن الصباح، وزهير بن حرب، وعثمان بن أبي شيبة، قالوا: حدثنا هشيم، أخبرنا أبو الزبير، عن جابر، قال: «لعن رسول الله صلى الله عليه وسلم آكل الربا، ومؤكله، وكاتبه، وشاهديه»، وقال: «هم سواء»