What is the ruling on companies selling villas to people on installment?
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The questioner : Shaykh! Some companies sell some villas to some people on installments over a period of years. What is your opinion on this, given that this company purchases these villas?
The Shaykh : If the villas are owned by the company from before, and are offered for sale for cash or on installment, there is no harm. But if the company does not have villas, and a man comes and says, "I want such-and-such a villa," and they go and buy it from its owner for cash, then sell it to the one who requested it on installment, this is easily forbidden. Because it is undoubtedly a stratagem to engage in riba (usury or interest). And were it not that this requester wanted this villa, the company would not have bought it. They did not buy the villa except in order to take the increase through installments.
The questioner : May Allah reward you, Shaykh Muhammad. If the correct image regarding the installment sale of villas by some companies is not as we say, what is it?
The Shaykh : I say: If the villa is in the possession of the company from the start, for example, they built a hundred villas and offered them for sale, then if someone comes to buy for cash, hand to hand, they say, "For one hundred thousand," and if someone wants installments, they say, "I will sell to you over one year for one hundred and fifty thousand, give me so much and so much each month," this is valid. But as for something that is not in the ownership of the company, but they go and buy it for you, this is not permissible.
The presenter : May Allah reward you with good. This image has become clear. May Allah reward you with good, Honorable Shaykh, and thank you to the sister
The Shaykh : who asked the question.
The Shaykh : If the villas are owned by the company from before, and are offered for sale for cash or on installment, there is no harm. But if the company does not have villas, and a man comes and says, "I want such-and-such a villa," and they go and buy it from its owner for cash, then sell it to the one who requested it on installment, this is easily forbidden. Because it is undoubtedly a stratagem to engage in riba (usury or interest). And were it not that this requester wanted this villa, the company would not have bought it. They did not buy the villa except in order to take the increase through installments.
The questioner : May Allah reward you, Shaykh Muhammad. If the correct image regarding the installment sale of villas by some companies is not as we say, what is it?
The Shaykh : I say: If the villa is in the possession of the company from the start, for example, they built a hundred villas and offered them for sale, then if someone comes to buy for cash, hand to hand, they say, "For one hundred thousand," and if someone wants installments, they say, "I will sell to you over one year for one hundred and fifty thousand, give me so much and so much each month," this is valid. But as for something that is not in the ownership of the company, but they go and buy it for you, this is not permissible.
The presenter : May Allah reward you with good. This image has become clear. May Allah reward you with good, Honorable Shaykh, and thank you to the sister
The Shaykh : who asked the question.
Source
قناة «فضيلة الشيخ محمد بن صالح العثيمين»، 1882- ما حكم تقسيط الشركات الفلل على الناس /سؤال على الهاتف 📞 /ابن عثيمين — youtube.com
The Arabic text is a machine transcription of the audio recording.