Is it permissible to buy a house on installments from a bank?
Machine translationRead the Arabic original
The questioner : Buying a house from an Islamic bank on installments, is this permissible or not?
The Shaykh : Absolutely not permissible.
The questioner : Knowing that there is no interest or anything.
The Shaykh : How is there no interest?
The questioner : I took it from another person; they built apartments and I took my apartment.
The Shaykh : Oh, oh, like that Turkish one. If a person did not want to buy that house in cash, would they not sell it for less than they sold it on installments?
The questioner : Knowing that...
The Shaykh : Do not believe it, do not believe it, do not believe it.
Al-Halabi : Even if it is cash?
The Shaykh : No, the matter did not agree; do not cheat.
The questioner : We did not cheat, meaning we are saying...
The Shaykh : No, the matter did not agree; because this reminds us of the Kuwaiti merchant, but the land is occupied. Do I know if the land is occupied? It is occupied.
The Shaykh: They claimed that a car merchant in Kuwait—and what do you know about Kuwait at that time—was informed that it is not permissible to sell one item at two prices: cash at such-and-such and installments at such-and-such. The man was convinced that this is forbidden and not permissible. So what did he do? He used to sell at two prices, cash and installments, with the installment price higher than the cash price. He started selling the cash price as the installment price.
The questioner : At the cash and installment price.
The Shaykh : Excuse me, at the cash and installment price. You buy cash, you buy installments, so the price is the same. But is this price the higher one or the lower one? The higher one. So I said, when the news reached me, whether it was true or not, that is another discussion, because we are not now studying the chains of hadith and histories. Whether it was true or not, the important thing is that this man was oppressing half of his customers, those who did not have the ability to pay in cash. Now he is oppressing all of them. Meaning, let us be like that Turkish one too; they all have one price.
The Shaykh: It appears that the Islamic bank took the method from that Kuwaiti merchant. He sells at one price, but is this price the cash price or the installment price? I say with certainty it is the installment price, because he profits twice. In the name of Allah. Now, the question is: are there other banks that sell like this or not?
The questioner : ... meaning the Islamic investment bank and the Islamic bank.
The Shaykh : Good. How did that bank sell? At one price or two prices?
The questioner : The Islamic bank?
The Shaykh : No, the other one.
The questioner : He came under pressure.
The Shaykh : We are now asking Abu Anas, because Allah was with them, yes.
The questioner : ... sold in cash or sold on installments, but in our brother's case, because our brother requested.
The Shaykh : No, my discussion is not with him.
The questioner : He sold in cash at two prices.
The Shaykh : That is it, that is what we know. Now, leave us the Islamic bank. Do Muslim merchants today not sell at two prices? It is important for us to know that this sale is not permissible, due to the saying of the Messenger of Allah (peace and blessings be upon him):Sunan Abi Dawud 3461Hasan (Al-Albani) The Islamic world, for fourteen centuries, does not know, as a system in selling, what I mean not as an individual who might be allowed, but as a system, selling on installments at a price higher than the cash sale. The Islamic world does not know it except when it connected with the disbelieving West and took their method of dealing and knew the value of the world, at which time they were afflicted by making permissible what Allah has forbidden through the lowest of tricks.
The Shaykh: Today, many scholars in the lands of Islam argue for the permissibility of installment sales with a price difference. They tell you:[Al-Baqarah 2:275] This is one of the matters where we say, the general text, my brother, is not always and forever to be used as evidence for every detail that falls under the general text. They tell you this is a sale, meaning the buyer bought by his choice, and the seller sold by his choice, and the sale is by mutual consent. The consent happened, the matter is done. Fine. And how does riba happen? By mutual consent.
The Shaykh: So, is the mere existence of the condition of mutual consent in the matter a solution from all sides, without the existence of the other conditions? The answer is no.
The Shaykh: The Messenger of Allah (peace and blessings be upon him) forbade two sales in one sale. A Companion of the Successors was asked, or a Successor was asked, what are two sales in one sale? He said: that you say, "I sell you this for such-and-such in cash, and for such-and-such and such-and-such on credit." Now, the Islamic bank, leave the other banks aside. If you go to request that they bring you a specific machine or device from Europe, they do a very precise calculation. First, the cost of the capital that this bank pays is such-and-such thousand, and bringing it, and so on, all calculated on the computer. And in the end, they want profit and they want the installment difference. If the cost was, I said to them, "I will pay you in advance," they give you a price. And if I said to them, "I cannot pay except after such-and-such months," they calculate for such-and-such months, how much you will pay. They do not call it by a name called their interest, meaning their riba. They calculate and add it. If it appears to the customer that no, he cannot pay after six months, but only after a year, you will find the percentage has increased. This is the same riba, my brother, but the causes are many and death is one. This is the reality with the Islamic bank, repeatedly and over and over. Meaning, they take riba just as the usurers take it, exactly. The duration of payment decreases, the percentage decreases; it increases, the percentage increases. This is not called a sale; this is called a forbidden sale.
The Shaykh: He forbade two sales in one sale. What are two sales in one sale? He said: that you say, "I sell you this for such-and-such in cash, and for such-and-such and such-and-such on credit." And these transactions today are widespread in all the lands of Islam. You hardly find a company in the world that is safe from it. An Islamic company. We might find very few individuals scattered in this world, lost, individuals. But a company, it is not possible except that it deals at two prices: the cash price and the installment price. And the strange thing is, if you ask them, they give you the same answer as the usurers. If you say to the usurer, "Why do you lend in cash, giving one hundred on the condition that it benefits you one hundred and five?" He tells you: "My brother, we have kept our money idle." The same answer from these merchants.
Al-Halabi : Time has a price.
The Shaykh : By Allah, we seek help from Allah.
The questioner : Oh Shaykh, regarding the beard.
The Shaykh : Excuse me, have you finished or not yet?
The Shaykh : Absolutely not permissible.
The questioner : Knowing that there is no interest or anything.
The Shaykh : How is there no interest?
The questioner : I took it from another person; they built apartments and I took my apartment.
The Shaykh : Oh, oh, like that Turkish one. If a person did not want to buy that house in cash, would they not sell it for less than they sold it on installments?
The questioner : Knowing that...
The Shaykh : Do not believe it, do not believe it, do not believe it.
Al-Halabi : Even if it is cash?
The Shaykh : No, the matter did not agree; do not cheat.
The questioner : We did not cheat, meaning we are saying...
The Shaykh : No, the matter did not agree; because this reminds us of the Kuwaiti merchant, but the land is occupied. Do I know if the land is occupied? It is occupied.
The Shaykh: They claimed that a car merchant in Kuwait—and what do you know about Kuwait at that time—was informed that it is not permissible to sell one item at two prices: cash at such-and-such and installments at such-and-such. The man was convinced that this is forbidden and not permissible. So what did he do? He used to sell at two prices, cash and installments, with the installment price higher than the cash price. He started selling the cash price as the installment price.
The questioner : At the cash and installment price.
The Shaykh : Excuse me, at the cash and installment price. You buy cash, you buy installments, so the price is the same. But is this price the higher one or the lower one? The higher one. So I said, when the news reached me, whether it was true or not, that is another discussion, because we are not now studying the chains of hadith and histories. Whether it was true or not, the important thing is that this man was oppressing half of his customers, those who did not have the ability to pay in cash. Now he is oppressing all of them. Meaning, let us be like that Turkish one too; they all have one price.
The Shaykh: It appears that the Islamic bank took the method from that Kuwaiti merchant. He sells at one price, but is this price the cash price or the installment price? I say with certainty it is the installment price, because he profits twice. In the name of Allah. Now, the question is: are there other banks that sell like this or not?
The questioner : ... meaning the Islamic investment bank and the Islamic bank.
The Shaykh : Good. How did that bank sell? At one price or two prices?
The questioner : The Islamic bank?
The Shaykh : No, the other one.
The questioner : He came under pressure.
The Shaykh : We are now asking Abu Anas, because Allah was with them, yes.
The questioner : ... sold in cash or sold on installments, but in our brother's case, because our brother requested.
The Shaykh : No, my discussion is not with him.
The questioner : He sold in cash at two prices.
The Shaykh : That is it, that is what we know. Now, leave us the Islamic bank. Do Muslim merchants today not sell at two prices? It is important for us to know that this sale is not permissible, due to the saying of the Messenger of Allah (peace and blessings be upon him):
If anyone makes two transactions combined in one bargain, he should have the lesser of the two or it will involve usury.
من باع بيعتين في بيعة فله أوكسهما أو الرباThe Shaykh: Today, many scholars in the lands of Islam argue for the permissibility of installment sales with a price difference. They tell you:
But Allah has permitted trade and has forbidden interest
وأحل الله البيع وحرم الرباThe Shaykh: So, is the mere existence of the condition of mutual consent in the matter a solution from all sides, without the existence of the other conditions? The answer is no.
The Shaykh: The Messenger of Allah (peace and blessings be upon him) forbade two sales in one sale. A Companion of the Successors was asked, or a Successor was asked, what are two sales in one sale? He said: that you say, "I sell you this for such-and-such in cash, and for such-and-such and such-and-such on credit." Now, the Islamic bank, leave the other banks aside. If you go to request that they bring you a specific machine or device from Europe, they do a very precise calculation. First, the cost of the capital that this bank pays is such-and-such thousand, and bringing it, and so on, all calculated on the computer. And in the end, they want profit and they want the installment difference. If the cost was, I said to them, "I will pay you in advance," they give you a price. And if I said to them, "I cannot pay except after such-and-such months," they calculate for such-and-such months, how much you will pay. They do not call it by a name called their interest, meaning their riba. They calculate and add it. If it appears to the customer that no, he cannot pay after six months, but only after a year, you will find the percentage has increased. This is the same riba, my brother, but the causes are many and death is one. This is the reality with the Islamic bank, repeatedly and over and over. Meaning, they take riba just as the usurers take it, exactly. The duration of payment decreases, the percentage decreases; it increases, the percentage increases. This is not called a sale; this is called a forbidden sale.
The Shaykh: He forbade two sales in one sale. What are two sales in one sale? He said: that you say, "I sell you this for such-and-such in cash, and for such-and-such and such-and-such on credit." And these transactions today are widespread in all the lands of Islam. You hardly find a company in the world that is safe from it. An Islamic company. We might find very few individuals scattered in this world, lost, individuals. But a company, it is not possible except that it deals at two prices: the cash price and the installment price. And the strange thing is, if you ask them, they give you the same answer as the usurers. If you say to the usurer, "Why do you lend in cash, giving one hundred on the condition that it benefits you one hundred and five?" He tells you: "My brother, we have kept our money idle." The same answer from these merchants.
Al-Halabi : Time has a price.
The Shaykh : By Allah, we seek help from Allah.
The questioner : Oh Shaykh, regarding the beard.
The Shaykh : Excuse me, have you finished or not yet?
Source
www.al-albany.com
The Arabic text is copied verbatim from the original source, without any edits.