The Ruling on the Contract of Istisna' in Building Construction

Question:
Is it permissible to pay a person money to build a house for him at half the value, and then pay him the rest of the money out of fear of any defect in his work?

Answer:
This is called istisna', the contract of istisna'. You say to him, for example: Build me a house or a building for such and such an amount, on the condition that he is paid half the fee now and the rest when the work is completed.
According to the majority of scholars, this is not valid. It is called the contract of istisna' because the thing does not exist, as the house does not exist now at the time of the contract, and the building does not exist at the time of the contract. It is not valid according to the majority, but this is permissible according to the Hanafis; the contract of istisna' is permissible according to the Hanafis. Yes.
However, if he hires them, saying: I will build me a house or a building, and I will pay for the cement, the iron, and all the costs; you only have to do the work for a wage, there is no harm in this. This is called a wage. But if he says: Build me the building and everything is from you, everything is from you, the iron, the cement, the paint, the doors, and everything is from the craftsman, from the worker, this is the contract of istisna' according to the majority, which is not valid and not permissible, and this is the correct view. Peace. But according to the Hanafis, it is permissible. Welcome, welcome, welcome.