Investing With a Partner in Real Estate
Fatwa No: 373738

Question

Dear BotherAssalam alaykumMy nephew wants to invest properties in UK –and will have mortgage from bank He suggest to me to send money for investment (100k) to buy a flat .For three years suppose the rent will be 600 GBP , I will get only 500 and he will have only 100.After three years , he will sell the house and I will get my 100k bank , but any profit from selling the house he will get itI don’t live in UK, but my nephew does Is this consider Halal for me.Best RegardsSami Abdul Rashid

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.

We did not understand the above mentioned transaction and what section does it fall under; it does not fall under an authorization, a Mudhaarabah (a type of partnership), or any other type of the permissible contracts.

However, you may give him the 100,000 to invest it in a permissible way in real estate, according to the known Mudhaarabah formula, provided that he gets a percentage of profit if there is any profit from the sale of the estate, or from renting it. However, he does not guarantee the capital money unless he has transgressed or was negligent.

You may also resort to any other similar forms of permissible investment.

You should ask the scholars in person, and explain to them exactly what you intend to do.

For more benefit on Mudhaarabah, please refer to Fatwa 276166, 354718, 258553, and 94668.

Allah knows best.

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