Dealing in A Contract with A Real estate Contractor
There was a man who wished to build a house. He signed a contract with a contractor. The contractor said that if the building fee was to be paid in cash, the amount was so and so. Whereas if the fee was to be paid in several installments, then the amount would be larger. Is such contract lawful according to shari’a?
Answered by The Lajnah Daimah:
It is allowed for a muslim to make a contract of cooperation with a contractor so that the contractor build a house for him with a cost of 500 thousand Saudi reals, since the payment will be settled in several installments which to be paid in certain time interval. Whereas if is paid fully in advance the cost will be just 400 thousand reals.
Such transaction is not a kind of usury, but it is similar to the non-cash transaction which cost is higher than the cash transaction.
A muslim is allowed to sell a cloth priced 10 thousands if the transaction is a non cash one; whereas if it is paid in cash the price will just be 9 thousands.
But in such case, both the seller and the buyer should not leave the place of transaction but after they agreed upon which payment form to be applied, whether it is the advance, full payment with a cheaper price, or the installments with a consequently higher price.
The above fatwa was signed by Sheikh Abdul Aziz bin Abdullah bin Baz, Abdurrazzaq Afifi and Abdullah bin Qaud. (Fatwas of Lajnah Daimah part:14 Page. 396-397, the first question in fatwa no.2573).
Author: Ustadz Aris Munandar, M.PI.
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