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Fatwa: Condition That Istisna' Requester To Be Himself The Manufacturer (Sania)

IM Insights
By IM Insights
1 year ago
Fatwa: Condition That Istisna' Requester To Be Himself The Manufacturer (Sania)

Shariah


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  1. Fatwa Database https ://islamicmarkets.com/publications Topic: Condition That Istisna' Requester To Be Himself The Manufacturer (Sania) Question: Somebody applied to Dubai Islamic Bank requesting the bank to build an investment apartment building composed of four apartments. Upon agreement of the bank to that request, the land owner, who is also an owner of a contracting company, applied to the bank to undertake by himself the construction of the building in accordance with specifications as per agreed upon amount with the bank. Is it permissible for such person to undertake building by himself in his capacity as a contractor, and after construction completion to re-purchase the building from the bank for a higher deferred price? Answer: This case involves that Istisna' requester to manufacture by himself what he requested to be made for him, as the case of a land owner who asked the bank to build for him an investment housing building and the bank agreed, is it allowed that such a land owner, who is also a contractor, to build the building for an agreed upon amount, and after construction completion to re-purchase the building from the bank for a higher amount. Shariah Board do not recommend such a transaction, since the land owner, or Istisna' requester can build the building or do the making process and in this case Istisna' contract is irrelevant. The bank may enter into a diminishing Musharka ending into ownership with the land owner. In this case the land owner contributes land and work while the bank provides funds and as such enters into Musharka each proportionate to his share. The bank may also provide the land owner with all building requirements by the way of Murabaha. Compiled & Classified By: Dr Ahmed Mohieddin Ahmed Source: Reviewed by: Dr Abdul Sattar Abu Ghuddah Shariah Board Fatwas of Dubai Islamic Bank, Fatwa No. 40.