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Interest Earned During Transfer Of Ownership


Normally when a property is bought, and the buyer pays the money for the property upfront. But he has no access to the property until transfer is not done. Meanwhile the monies are kept in trust with the lawyers (conveyancers). The lawyers keep the amount in the bank which accrues interest. When the transfer is done, the lawyers give the interest to the buyer. It is the buyer’s for keeps.

What is the shar’i ruling of this amount given by the lawyers. Is it still deemed as interest? Hence haraam. Or is it deemed as hadiyyah (a gift). Hence halaal.


When a buyer intends purchasing property, then after finalizing and concluding the deal with the estate agent, the funds are deposited into the conveyance’s trust account. Once the funds have been deposited the lawyer requests the buyer to sign a particular document which authorizes the lawyer to invest the funds into an interest bearing account on behalf of the buyer. The funds then remain in the account until the transfer process is completed. Finally the seller is paid (after transfer of the property) and the accrued interest is paid out to the buyer.

It is not impermissible for the buyer to consent to the lawyer investing the funds in an interest bearing account with the purpose of accumulating interest due to the impermissibility of Riba. If one had consented to such an investment, then the accumulated interest must be disposed off immediately in the correct avenues; i.e. either by returning the funds to the banking institute or by
giving it to the poor without any intention of reward, the latter being the better option of the two. 

Therefore, it will not be regarded as hadiyyah or a gift from the lawyers. 

Checked and Approved By:

Mufti Muhammed Saeed Motara Saheb D.B.


واحل الله البيع وحرم الربوا
(سورة بقرة) 

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