Laws of Trade
Making a Friend a Partner in a House and Dividing the Rent
Question: What do the esteemed scholars state regarding the following matter: Zayd bought a house some time ago for PKR 650,000. Now, Zayd wants to make his friend, Umar, a partner in one-fourth of that house, and they would both receive the rent. Please clarify, is it permissible according to Shariah for Zayd to make his friend Umar a partner in this house? If it is permissible, should he include him as a partner based on the original purchase price or the current value? The current value of the house is 700,000 rupees. Furthermore, on what basis will the rental income be divided between Zayd and Umar?
اَلْجَوَابُ بِعَوْنِ الْمَلِکِ الْوَھَّابِ اَللّٰھُمَّ ھِدَایَۃَ الْحَقِّ وَالصَّوَابِ
Answer: In the scenario described, Zayd can include Umar in his property. If he wishes to give him a one-fourth share, i.e., 25%, he may do so. However, it is essential that both parties agree on the price, i.e., the consideration. It is not necessary to sell the share based on the original purchase price or the current market value; rather, any price can be determined by mutual consent. As for the division of rent, each partner will be entitled to the rent in proportion to their respective share.
The erudite Hanafi jurist, Mufti Amjad ꜤAlī al-AꜤẓamī رَحْمَةُ الـلّٰـهِ عَـلَيْه writes:
A person bought something. Another person said to him, 'Make me a partner in it.' The buyer said, 'I have made you a partner.' If this exchange takes place after the buyer has taken possession of the sold item, the partnership is valid. If he has not taken possession, the partnership is not valid, because making another person a partner in one's own property is equivalent to selling it to them, and a sale can only be conducted for an item that is in one's possession. When the partnership is valid, it will be necessary [for the new partner] to pay half the price, as both will be considered equal partners. However, if it is specified that the partnership is for one-third, one-fourth, or any other portion, then the partnership will be for the specified share, and it will be necessary to pay the price in accordance with that share.[1]
The distribution of rent will be according to the shares. As it is stated in Durar al-Ḥukkām:
”لو اجر الشركاء الحانوت المشترك بينهم لآخر فيجب تقسيم بدل الايجار بينهم حسب حصصهم في الحانوت“
Meaning: If partners rent out their jointly-owned shop to another person, the rental payment must be divided among them according to their respective shares in the shop.[2]
وَاللہُ اَعْلَمُ عَزَّوَجَلَّ وَ رَسُوْلُہٗ اَعْلَم صلَّی اللہ علیہ واٰلہٖ وسلَّم
The Ruling on Accumulated Funds if a Participant in a Committee Scheme Passes Away
Question: What do the esteemed scholars state regarding the following matter: A person was participating in two committee schemes. He had received the payout for one of them, amounting to PKR 800,000. In total, he had paid PKR 1,050,000 towards both schemes. Now, he has passed away, due to which he will not be making any further payments. His second committee payout is due in approximately seven months. The question is, must the extra PKR 250,000 that the deceased had paid be given to his heirs immediately?
اَلْجَوَابُ بِعَوْنِ الْمَلِکِ الْوَھَّابِ اَللّٰھُمَّ ھِدَایَۃَ الْحَقِّ وَالصَّوَابِ
Answer: In the situation described, the deceased had paid a total of PKR 1,050,000 for both committee schemes and had received PKR 800,000 for one of them. Therefore, a total sum of PKR 250,000 became a loan owed by the committee administrator. According to Shariah, a loan must be returned upon demand. In any case, it is incumbent upon the committee administrator to give the 250,000 rupees to the heirs. The procedure for this can be that the heirs of the deceased and the committee administrator mutually agree on a date for the repayment. The heirs should also consider that if the committee administrator is not able to pay immediately and requests for time, they should not demand immediate payment but rather grant him some respite.
In our custom, money paid into a committee scheme is considered a form of loan. Accordingly, ꜤAllamah ꜤAlā al-Dīn Ḥaṣkafī رَحْمَةُ الـلّٰـهِ عَـلَيْه writes in Durr al-Mukhtār regarding the definition of a loan:
”شرعا:ما تعطيه من مثلی لتتقاضاه“
Meaning: In the Shariah, a loan is a fungible good that you give with the purpose of getting a similar one back.[3]
وَاللہُ اَعْلَمُ عَزَّوَجَلَّ وَ رَسُوْلُہٗ اَعْلَم صلَّی اللہ علیہ واٰلہٖ وسلَّم
What is the Ruling on Taking Extra Money for a Late Committee Instalment?
Question: What do the esteemed scholars state regarding the following matter: Can the collector of a committee scheme (B.C.) impose a condition that a person who submits their instalment late will also have to pay an additional amount due to this delay?
اَلْجَوَابُ بِعَوْنِ الْمَلِکِ الْوَھَّابِ اَللّٰھُمَّ ھِدَایَۃَ الْحَقِّ وَالصَّوَابِ
Answer: It is an impermissible and forbidden (haram) condition for the committee collector to stipulate that a person who submits their instalment late will have to pay an additional amount because of the delay. This is because if the person paying the instalment has not yet received their payout, they are not a debtor. Therefore, taking extra money from them due to a delay is a financial penalty, which is impermissible and a sin. And if the person has already received their payout and has outstanding instalments, they are a debtor. In this case, for the committee collector to take extra money from this person due to a delay is interest (ribā), which is strictly impermissible and forbidden.
As it is stated in Al-Mabsūṭ:
”مقابلة الاجل بالدراهم ربا“
Translation: Taking dirhams [money] in exchange for a period of time is interest (ribā).[4]
Regarding financial penalties, the Imam of Ahl al-Sunnah, Imam Ahmad Raza Khan رَحْمَةُ الـلّٰـهِ عَـلَيْه states: "Discretionary punishment through financial penalty (taʾzīr bi al-māl) is abrogated, and it is not permissible to act upon an abrogated ruling."[5]
وَاللہُ اَعْلَمُ عَزَّوَجَلَّ وَ رَسُوْلُہٗ اَعْلَم صلَّی اللہ علیہ واٰلہٖ وسلَّم
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