Waqf - Scope & Shariah Ruling

Transcription

1. Shari ’ah Standard No. (33): Waqf Statement of the Standard 1. Scope of the Standard This standard presents the definition of Waqf and discusses its types, Shari’ah rulings, basic elements, and the conditions that pertain to each of these elements. It also covers the conditions required in the Waqf and the Waqif (donor), and illustrates the appropriate methods for Waqf utilization, investment, supervision and management. Furthermore, the standard covers the crucial role that Islamic financial Institutions could play in the development of Waqf, and the appropriate methods of Waqf investment. This standard, however, does not cover other philanthropic Institutions such as Irsad (allocation of public property for public utilities) and financial trusts which resemble Waqf in some aspects. 2. Definition, Shari’ah Rulings, Rationale of Permissibility and Types of Waqf 2/1 Definition of Waqf In Arabic language the word Waqf or Habs means preventing something from movement. In Shari’ah terminology, Waqf refers to making making a property invulnerable to any disposition that leads to transfer of ownership, and donating the usufruct of that property to beneficiaries. 2/2 Shari’ah status of Waqf Waqf is permissible in Shari’ah, as has been emphasized by the Sunnah (Prophetic traditions) and Ijma’ ((consensus consensus of Fuqaha Fuqaha). ). Waqf is also a binding commitment, and, therefore, declaring a property as Waqf would spontaneously deprive its donating owner the right of ownership. 814
2. Shari ’ah Standard No. (33): Waqf 2/3 Permissible types of Waqf There are several types Waqf of which most important is the charitable Waqf (al-Waqf (al-Waqf al-Khayri), al-Khayri), the family Waqf ((al-Waqf al-Waqf alAhli), Ahli ), the joint Waqf (al-Waqf (al-Waqf al-Mushtarak al-Mushtarak)) and self-dedicated Waqf (al-Waqf (al-Waqf ’Ala al-Nafs al-Nafs). ). 2/3/1 Waqf is said to be charitable when its income/usufruct is dedicated for a charitable purpose. 2/3/2 A family Waqf is the Waqf in which the income/usufruct is reserved for specifically described persons, usually family members and relatives. The income/usufruct of such Waqf goes to a charitable purpose when none of these persons is existent. 2/3/3 Joint Waqf refers to the case in which the property is donated to family as well as charitable purposes, and the income/usufruct here is shared accordingly. 2/3/4 In case of self-dedicated Waqf the donor retains the income/ usufruct of the donated property for himself as long as he is alive, and indicates the charitable purpose which shall be entitled to the income/usufruct of the Waqf after his death. 3. Basic Elements of Waqf The basic elements of Waqf include: The form of donation, the Waqif (the donor) and the donated property. 3/1 The form of the Waqf 3/1/1 The form of the Waqf comprises “offer” only, as it does not necessitate “acceptance”. When a legally competent beneficiary rejects a Waqf that has been earmarked for him, his rejection has to be concurred to, yet the Waqf shall still remain valid. In this case the Waqf- or the share of the rejecting beneficiary if beneficiaries are many - should go to charitable purposes. 3/1/2 Formation of Waqf can take place verbally, in writing, or in any form of disposition which is normally considered as indicating it. 815
3. Shari ’ah Standard No. (33): Waqf 3/1/3 Waqf can be declared as effective starting from a future date, as when the donor declares his property to become Waqf starting from next year. 3/1/4 In principle Waqf should be eternal. Nevertheless temporary Waqf is also permissible when the donor desires to get back his property after a specific period. 3/2 The Waqif (donor) 3/2/1 The Waqif can be a natural or a legal person. If the Waqif is a legal person, the Waqf decision should be made by the general assembly and not the board of directors. 3/2/2 The Waqif must be legally eligible for disposing of his property. 3/2/3 The Waqf decision of a person whose legal competence is restricted because of irrationality is invalid, except when he declares his property as Waqf for himself as long as he is alive. The validity of the Waqf decision of a person whose legal competence is restricted because of indebtedness depends on confirmation by his creditors. When the creditors refrain from confirming the Waqf of the indebted person, the Waqf becomes invalid. 3/3 The beneficiary 3/3/1 The Waqf should not be made for an impermissible purpose, although it may not be for a charitable purpose since the very beginning of its inception. 3/3/2 It is permissible to make Waqf for the benefit of non-Muslims, provided that the cause to be served does not involve a sin. It is also permissible to make Waqf for the benefit of the rich. 3/3/3 The Waqf beneficiary need not be present at the time of declaring the Waqf. 3/3/4 When the beneficiary/beneficiaries of the Waqf is/are no longer existent, the benefits of the Waqf should go to charity purposes. 816
4. Shari ’ah Standard No. (33): Waqf 3/4 The Waqf property 3/4/1 The Waqf property should fulfill the following conditions: a) It shall be a Shari’ah-accepted property b) It shall be known c) The Waqif shall be the sole owner of the property in which nobody else should have a right of disposition at the time of establishing the Waqf. If the Waqif himself has the option of disposing of the property, the Waqf shall become valid, and the option is spontaneously cancelled. 3/4/2 The Waqf has a legal personality and financial liability which make it capable of giving and accepting commitment. The legal personality of the Waqf is quite separate from the personality of its manager. 3/4/3 Types of Waqf properties 3/4/3/1 Waqf is permissible in real estate along with permanent furniture and fittings. 3/4/3/1 Waqf is permissible in movable assets, whether such movable assets are part of a real estate or independent. 3/4/3/2 Waqf is permissible in money. The income generated from utilization of the money is to be spent, while retaining the principal amount. Utilization may include, for instance, Shari’ah-based lending as well as permissible and safe investments like Mudarabah where the profit share owned by the Waqf goes to beneficiaries. 3/4/3/4 Waqf is permissible in Shari’ah-accepted shares and Sukuk. In this case, the income earned by these shares or Sukuk is to be spent on the Waqf beneficiaries. In case of liquidation the Shari’ah rulings on Istibdal (exchange of Waqf property) should be applied. 3/4/4 Waqf in common property 3/4/4/1 Waqf can be a common property, whether such property is divisible or not. The whole common property in this 817
5. Shari ’ah Standard No. (33): Waqf case (not shares or Sukuk), can be leased and the Waqf gets its respective share of the rent. Alternatively, the share of the Waqf in the common property can be leased, so that the usufruct can be utilized through time-based and place-based Muhaya`h (succession), while the rental income goes to the beneficiaries of the Waqf. 3/4/4/2 When the Waqf superintendent or the Waqf partner asks for the division of an indivisible Waqf, the refraining party should be forced to accept selling. The income obtained from selling the Waqf in this manner should be used for purchasing a Waqf property of the same kind. If such request for division is made in case of a divisible Waqf, the refraining party should be forced to accept division. 3/4/5 Waqf as a floor in a building, and easement eights (Irtifaq (Irtifaq or Ta’alli) lli Waqf can be a floor in a building. It can also enjoy easement rights ((Haqq Haqq al-Irtifaq) al-Irtifaq) in a building that has not yet been constructed. In this case the Waqf can enjoy the right of Ta’alli (transcendence) when the upper floor is declared as Waqf while the owner of the lower floor is unable to perform construction. The lower floor in such case can be built at the cost of the Waqf (on permission of the concerned authorities) and the cost reimbursed to the Waqf from the income generated through its leasing. 3/4/6 Waqf as a usufructs Waqf can be a usufruct of an asset which the Waqif acquires through rent. The Waqif can lease the asset once again, and the proceeds go to the Waqf beneficiaries. The Waqf, in this case, is to be made temporary according to the period of the original 818
6. Shari ’ah Standard No. (33): Waqf rent. Waqf can take place in this manner when the owner of the property does not deprive the lessee the right of subleasing. 4. Condition in Waqf 4/1 Conditions pertaining to the Waqf contract 4/1/1 The Waqif has the right to make his Waqf subject to all conditions which do not contradict with Shari’ah, and his conditions shall be as enforceable as Shari’ah conditions. The conditions of every Waqif must be understood with due consideration to the prevailing norms in his environment. Such conditions may include, for example, designating a certain superintendent for the Waqf and specifying his remuneration package. The designated superintendent could be an individual, a group of people, or an institution. 4/1/2 Regarding the form of the Waqf, the Waqif can make a condition that his debts should be settled from the Waqf income; after his death, or he may stipulate a condition that the income of his Waqf should go to him first as long as he is alive, then to his family, and finally to charitable purposes. Another condition of the Waqif could be that the Waqf income has to be spent first on any member of his family who becomes poor, and then on charity purposes. 4/1/3 A condition stipulated by the Waqif is invalid when it comprises an impermissible element, or when it violates the Shari’ah rulings on Waqf or cause harm to the Waqf property. In such cases the condition should be rejected and the Waqf shall remain valid. Examples of invalid conditions include: absolute forbiddance of Istibdal (exchange) of the Waqf, or forbiddance of the dismissal of the Waqf superintendent for any reason. A condition stipulated by the Waqif also becomes invalid when it tends to hinder the interests of the Waqf, or jeopardize the process of benefiting from it. The example of this is a condition which requires starting - at all times - with distribution of the 819
7. Shari ’ah Standard No. (33): Waqf Waqf income among the beneficiaries, even if the Waqf is in need of maintenance or renovation. 4/1/4 When the Waqif stipulates a condition that the Waqf should be benefited from through residence, the Waqf can be benefited from either in that manner, or through leasing, and vice versa. 5. Supervision and Management of Waqf 5/1 Controls on supervision and management of Waqf Supervision and management of Waqf should observe the Shari’ah rulings on Waqf, then the conditions of the Waqif which do not contradict with Shari’ah or hinder the interests of the Waqf as perceived by the judiciary. 5/2 Tasks of the Waqf superintendent The Waqf Superintendent should perform the following tasks, among others: 5/2/1 Management, maintenance and development of the Waqf. 5/2/2 Leasing of the assets or usufructs of the Waqf (through operating-lease contracts), and leasing of the Waqf lands. 5/2/3 Development of the Waqf properties either directly in Shari’ahsanctioned methods of investment, or through Islamic financial institutions. 5/2/4 Increasing the Waqf money by investing it through Mudarabah and other similar forms. 5/2/5 Changing the operational form of the Waqf assets with the aim of maximizing the benefit that results to the Waqf and its beneficiaries. This may include, for instance, converting a residential building into a commercial building, or constructing buildings for rent on an agricultural land, provided that this would satisfy the demand of the people, generate more income for the Waqf and is done with the permission of the concerned authorities. 820
8. Shari ’ah Standard No. (33): Waqf 5/2/6 Defending the rights of the Waqf, ensuring its sustainability, payment of fees to agents in case of law suits filed against the Waqf, and payment of expenses for documentation of the assets and the rights of the Waqf. 5/2/7 Settlement of the debts of the Waqf. 5/2/8 Payment of the entitlements of beneficiaries 5/2/9 Replacement of the Waqf either by selling it for a cash amount and purchasing a new asset, or exchanging it with a new asset, subject to the conditions of Istibdal (exchange). [see item 9] 5/2/10 Safeguarding the Waqf properties against occupation or seizure by others. 5/2/11 Using solidarity insurance to safeguard the Waqf assets, whenever possible. 5/2/12 Preparation of the Waqf accounts, and submission of statements and reports on them to the concerned authorities. 5/3 What shall not be done by the Waqf Superintendent The Waqf superintendent shall not do the following: 5/3/1 Neglecting the conditions of the Waqif. 5/3/2 Leasing the Waqf to himself or to one of his dependant sons even if such leasing is at more than the normal rent – except through the judiciary. He should not also lease the Waqf to one of his direct relatives (Usul and Frua’) or to his spouse, for less than the normal rent of similar property. In this case, minor injustice (Ghabn) is not forgivable, although it is forgivable in leasing to nonrelatives. 5/3/3 Using the Waqf income for increasing the Waqf properties, except when this is done in fulfillment of a condition stipulated by the Waqif. 5/3/4 Mortgaging the Waqf assets for a debt to be obtained for the Waqf or the beneficiaries. 821
9. Shari ’ah Standard No. (33): Waqf 5/3/5 Lending the Waqf assets, and if he does so, the borrower has to pay the normal rent for similar assets. 5/3/6 Borrowing for the Waqf, except in fulfillment of a condition stipulated by the Waqif, or on permission of the legal authorities, and in case of necessity. In borrowing for the Waqf the following should be observed: 5/3/6/1 Establishing a debt obligation on the Waqf is permissible through permissible means of borrowing, or deferred payment purchase, or any other permissible mode of financing. Establishing the debt through any of these modes has to be for the sake of maintaining and developing the Waqf, as per a condition stipulated by the Waqif, or on permission of the legal authorities, and due to necessity. In establishing the debt, due consideration shall also be given to the ability of the Waqf to bear such debt and sufficiency of its income for repayment. These restricted forms of establishing debt obligations on the Waqf do not include the case when the Waqf superintendent pays a certain amount of money from his own sources for an interest which concerns the Waqf, and the Waqf has sufficient income to be resorted to for settlement of such debt. 5/3/6/2 Cases which justify borrowing for the Waqf, when borrowing is not sanctioned by a condition stipulated by the Waqif: a) Need for maintenance or necessary development of the Waqf and absence of sufficient Waqf income for that. b) Payment of financial commitments – if any – when the Waqf does not have sufficient funds. c) Inability to pay the wages of the employees working in the Waqf or those who serve its purposes, and fear from endangering the benefits of the Waqf. 822
10. Shari ’ah Standard No. (33): Waqf 5/3/6/3 Borrowing should not be for the sake of spending on the beneficiaries of the Waqf. 5/4 Spending the excess income of the Waqf of a mosque In principle the income of the Waqf of a specific mosque is to be spent on its own interests. If there is still an excess amount of income which has not been spent, it is permissible to transfer such amount to another mosque that does not have enough income to cover its expenses, or the cost of its maintenance and renovation. 5/5 Judicial supervision on Waqf management 5/5/1 By virtue of public guardianship, the judiciary has the authority of overseeing the supervision and management of the Waqf, preservation of its assets, and development of its sources. The judiciary has also the right of investigating the overall status of the Waqf, looking into any complaints raised against the Waqf superintendent or any other party, and subjecting the Waqf superintendent to disciplinary action. 6. Controls on Leasing of Waqf Assets 6/1 In principle, a long period of leasing should not be the normal practice for Waqf assets, except for obvious interest, and provided that a variable rent, linked to an accurate and well known index, is going to be sought. [see Shari’ah Standard No. (9) on Ijarah and Ijarah Muntahia Bittamleek, item 5/2/3] 6/2 The normal rent of similar property as a condition Waqf assets or usufructs should not be leased at less than the rent of similar property. When leasing at a lower rent is inevitable it should be considered in view of the actual necessity, and hence, excessive injustice (Ghabn (Ghabn Fahish) Fahish) can be accepted. If there happen to be a new tenant who can pay the rent of similar property, the Waqf superintendent has the right to terminate the previous contract, unless the old tenant accepts the rent increment. If the normal rent for the Waqf in question has risen because of developing the Waqf 823
11. Shari ’ah Standard No. (33): Waqf land and constructing a new building on it at the cost of the Waqf, the tenant is obliged to accept rent increment. If land development and construction of the building is done at the cost of the tenant, he is not bound to accept the rent increment. 6/3 Some permissible forms of Waqf leasing 6/3/1 Signing a lease contract with the aim of keeping the Waqf land in the hands of the tenant as long as he pays the normal rent for similar property as it changes according to circumstances. This type of contract is known as (Hikr (Hikr)) and is subject to the following conditions: 6/3/1/1 The Waqf has no income to be used for its development. 6/3/1/2 There is no person who is willing to have fixed-term rent and make advance payment so as to be spent on developing the Waqf. 6/3/1/3 Istibdal (exchange) of the Waqf is not possible 6/3/2 Haqq al-Qarar (right to stay) which a tenant deserves when he pays at the time of signing the lease contract a lump sum amount, known as (Kardar (Kardar)) for development of the Waqf, and a rent which is below the rent of similar property. This form of Waqf leasing is permissible when dictated by necessity, and if there is no tenant who is willing to pay the normal rent for similar property along with a lump sum amount for development of the Waqf. In some countries, this contractual form is known as ((alalKhulu). Khulu ). 7. Application of Modes of Investment for Development of Waqf Income and Assets 7/1 It is permissible to invest Waqf income, in the following cases: 1- As per a condition stipulated by the Waqif. 2- During the waiting period (prior to identification of beneficiaries). 3- Excess income, after payment to beneficiaries. 824
12. Shari ’ah Standard No. (33): Waqf Investment in these cases should be through permissible methods such as Mudarabah, Musharakah, Murabahah, Ijarah, and Salam, and in low risk investments. 7/2 For development of the Waqf land, the following is permissible: 7/2/1 Application of the Istisna’a through B.O.T. contracts. [see Shari’ah Standard No. (11) on Istisna’a and Parallel Istisna’a, item 3/2/1] 7/2/2 Application of diminishing Musharakah, where the Waqf and the financing partner construct the building through joint financing (excluding the Waqf land), and the Waqf gradually owns the building. [see Shari’ah Standard No. (12) on Sharikah (Musharakh) and Modern Corporations, item 5/8] 7/2/3 Application of Ijarah Muntahia Bittamleek for a specifically described property to be delivered in the future. In this case, the Waqf land is leased to the financier who constructs a building on it and delivers it to the Waqf to execute the lease contract. At the end of the contracting period, the Waqf becomes the owner of the building. [see Shari’ah Standard No. (9) on Ijarah and Ijarah Muntahia Bittamleek, item 3/5] 7/3 All appropriate means should be adopted for development of Awqaf, with due consideration to Shari’ah rulings on Waqf and the conditions stipulated by the Waqifs, as well as present day requirements. 7/4 Help in this regard should be sought from Islamic financial institutions, specialized in Waqf investments. 8. Maintenance, Renovation and Replacement of Waqf Assets 8/1 Maintenance and renovation of Waqf assets, and allocation of reserves for that purpose 8/1/1 Spending on maintenance, reparation and renovation of the Waqf assets should precede distribution of the Waqf income among beneficiaries. In this connection, due consideration shall be given to the technical schedules of periodical maintenance. 825
13. Shari ’ah Standard No. (33): Waqf Maintenance and reparation of Waqf assets also do not require a prior condition to be stipulated by the Waqif. 8/1/2 Maintenance and renovation requirements (maintenance reserve) shall be retained from the Waqf income every year even if the Waqif has not stipulated such a condition. The reserve, thus deducted, can be invested in a safe and easy to liquidate form of investment, and the returns be added to the principal amount. The beneficiaries shall have no right on the maintenance reserve, unless part of it turns out to be in excess of actual needs. 8/1/3 In the absence of sufficient amounts for maintenance and renovation of a leased Waqf asset, the Waqf superintendent has the right to allow the tenant to make such maintenance and renovation, against having the priority to continue as a tenant of the Waqf asset until getting full repayment of his debt. 8/1/4 Solidarity insurance shall be used for maintenance or renovation of the Waqf assets. 8/2 Making allocations for replacement of Waqf assets It is permissible to deduct from the Waqf income (after distribution to beneficiaries) periodical amounts commensurate to the economic lifetime of the depreciating Waqf assets, so as to use the accumulated amount for replacement of these assets (depreciation allowance). 9. Istibdal (Exchange) of Waqf Assets 9/1 Istibdal refers to the process of selling the Waqf asset and purchasing a new one instead, so as to maximize the interest of the Waqf. 9/2 Istibdal can take place according to a condition stipulated by the Waqif, or when the Waqf becomes ruined (even if prevented by the Waqif). Istibdal Istibdal,, in such cases, takes place by selling the Waqf property and purchasing a new one instead, so as to maintain the Waqf as it was before. 826
14. Shari ’ah Standard No. (33): Waqf Istibdal is also permissible when there is no way of benefiting from the Waqf (e.g., the Waqf has become in a deserted area), or because of fear from seizure of the Waqf by others, or when benefiting from the Waqf becomes extremely difficult. 9/3 Istibdal should be subject to the following conditions: 9/3/1 The Waqf must have reached the stage of generating no income, while there is no money for its development. 9/3/2 There should be no excessive injustice in the sale price. 9/3/3 Istibdal should meet the satisfaction and interest of the Waqf. 9/3/4 Istibdal should be permitted by the judiciary. 9/3/5 If the Waqf is a real estate it should also be exchanged for a real estate. When there is no risk of misuse, a real estate Waqf can be sold for cash, and the money kept with the judiciary until a new real estate is purchased. 10. Date of Issuance of the Standard This Standard was issued on 28 Jumada II, 1429 A.H., corresponding to 2 July 2008 A.D. 827