The ruling on installment sales when the seller does not own the goods at the time of sale
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What is the ruling on purchasing land through Al-Rajhi Bank, and if it is not permissible, what is the aspect of doubt in that?
If the lands are with the seller and a person comes to buy a piece of land from him for cash, the seller says: I sold it to you for ten thousand, then another person comes to buy a similar piece of land but does not have money, so the landowner says: I will sell you this land for twelve thousand, deferred and in installments. This is permissible; because the land is with him,As for if he says: I want to buy a piece of land and I do not have money,So I go to the merchant and say: buy the land for me, then sell it to me in installments for more than what you paid for it. This is forbidden; because this is a stratagem to circumvent riba (usury or interest). If you had not come to this merchant, he would not have bought the land. Thus, it is as if he lent you its value with an increase, and a loan with an increase is riba (usury or interest).
(Every loan that yields a benefit is riba), and this loan yielded a benefit to the lender, which is the increase in the price. This is forbidden and is a stratagem to circumvent the prohibitions of Allah the Exalted and Majestic.
And as for the merchant’s saying: If the one who bought the land were to return from his purchase, I would accept the land. This phrase—as they say—is of the nature of throwing dust in the eyes; because it is known that he needed the land and came to seek your help to buy it for him and then sell it to him. It is known that he will not return, so he needs it. Even if one out of ten thousand were to return, that is not a standard. Moreover, I have heard that the one who returns after the merchant buys it is placed on a blacklist so that the merchant does not deal with him thereafter. This is like a threat to him if he returns, so he will accept it in any case.
So the issue has a detailed ruling: If the goods are with the seller originally before you come to him, there is no harm in selling them to you for more than their current value in installments. But if they are not with him, and he bought them for your sake and then sold them to you with an increase, it is not permissible.
If the lands are with the seller and a person comes to buy a piece of land from him for cash, the seller says: I sold it to you for ten thousand, then another person comes to buy a similar piece of land but does not have money, so the landowner says: I will sell you this land for twelve thousand, deferred and in installments. This is permissible; because the land is with him,As for if he says: I want to buy a piece of land and I do not have money,So I go to the merchant and say: buy the land for me, then sell it to me in installments for more than what you paid for it. This is forbidden; because this is a stratagem to circumvent riba (usury or interest). If you had not come to this merchant, he would not have bought the land. Thus, it is as if he lent you its value with an increase, and a loan with an increase is riba (usury or interest).
(Every loan that yields a benefit is riba), and this loan yielded a benefit to the lender, which is the increase in the price. This is forbidden and is a stratagem to circumvent the prohibitions of Allah the Exalted and Majestic.
And as for the merchant’s saying: If the one who bought the land were to return from his purchase, I would accept the land. This phrase—as they say—is of the nature of throwing dust in the eyes; because it is known that he needed the land and came to seek your help to buy it for him and then sell it to him. It is known that he will not return, so he needs it. Even if one out of ten thousand were to return, that is not a standard. Moreover, I have heard that the one who returns after the merchant buys it is placed on a blacklist so that the merchant does not deal with him thereafter. This is like a threat to him if he returns, so he will accept it in any case.
So the issue has a detailed ruling: If the goods are with the seller originally before you come to him, there is no harm in selling them to you for more than their current value in installments. But if they are not with him, and he bought them for your sake and then sold them to you with an increase, it is not permissible.