Fatwa: # 15493
Category: Financial Transactions
Country: South Africa
Date: 7th August 2007

Title

We had sent you the contractual information for Guidance Finance which you informed , that apparently it is Halal but we need to make sure that it is implemented according as well.

Question

We had sent you the contractual information for Guidance Finance which you informed , that apparently it is Halal but we need to make sure that it is implemented according as well. Therefore, we asked for a checklist of things that we could investigate at the time of implementation. In other words, we would need to know what to look out for. Could you please very kindly provide us with such a checklist so that we could go ahead and start the transaction with Guidance House Financing, USA? Jazakullah Khair.

Answer

In the name of Allah, Most Gracious, Most Merciful

Assalaamu `alaykum waRahmatullahi Wabarakatoh

Guidance House Financing product is a diminishing Musharakah product that have two base elements in it, owenership (Bai) and Ijarah (hiring).

In principal, it is not permissible to contract two deals in one. In simple terms, one deal cannot be a condition of the other. In this context, one cannot conclude the deal only if the partner legally accepts to hire the property. The partner may make a promise which is only morally binding on him. Once a person purchases a share of the property, now he can hire it. From a practical point of view, this should not be a problem as generally a person will most certainly hire the purchased property as he intends to finally own it. The above procedure is to ensure that two deals are not done at once and simultaneously. They should be separate and independent.

And Allah knows best

Wassalam

Mufti Ebrahim Desai
Darul Iftaa

DISCLAIMER - AskImam.org questions
AskImam.org answers issues pertaining to Shar'ah. Thereafter, these questions and answers are placed for public view on www.askimam.org for educational purposes. However, many of these answers are unique to a particular scenario and cannot be taken as a basis to establish a ruling in another situation or another environment. Askimam.org bears no responsibility with regards to these questions being used out of their intended context.
  • The Shar's ruling herein given is based specifically on the question posed and should be read in conjunction with the question.
  • AskImam.org bears no responsibility to any party who may or may not act on this answer and is being hereby exempted from loss or damage howsoever caused.
  • This answer may not be used as evidence in any Court of Law without prior written consent of AskImam.org.
  • Any or all links provided in our emails, answers and articles are restricted to the specific material being cited. Such referencing should not be taken as an endorsement of other contents of that website.
The Messenger of Allah said, "When Allah wishes good for someone, He bestows upon him the understanding of Deen."
[Al-Bukhari and Muslim]