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f:778 -    Advance given while buying land, etc.
 Country : Cherlapally, India,
Name : submittername
Question:     Usually, while buying or selling flats, houses, plots of land, etc., the buyer gives a certain amount of money in advance to kind of reserve the plot, etc.  The rest of the money is to be paid in a certain stipulated time period.  If the person fails to pay up the rest of the amount in that period, the advance amount is not returned back.  What does the Shariah say about this?
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Answer:     When the transaction is settled with the agreement of both the buyer and the seller, then the money given in advance is actually a part of the actual price.  If the buyer cannot pay up the rest of the amount in the stipulated period of time, then the Shariah does not permit the advance amount to be confiscated.  The Holy Prophet (Sallallahu alaihi wa sallam) has prohibited this.  There is a Hadith in Sunan Ibn Majah:

It has been narrated on the authority of Hadhrat ‘Amr Bin Shu’aib narrates on the authority of his father and he in turn narrates on the authority of his father that the Holy Prophet (Sallallahu alaihi wa sallam) has prohibited “Ba’yah ‘Urbaan”  (Sunan Ibn Majah, Hadith No.2276)

It is given in Bidayatul Mujtahid, Vol. 2, Pg. No. 163:

Translation: “Ba’yah ‘Urbaan” is that the buyer buys something and gives a certain amount of the price to the seller with the condition that if the sale is completed then this amount will be considered to be a part of the price and if it is not completed, then the buyer will leave that amount with the seller and will not demand that amount.

The majority of scholars declared this to be forbidden, as in this case, the seller is acquiring the money without providing any product/service in return.  Thus, this kind of transaction is null and void.

It is established by the Shariah that if the sale is not completed, then the seller is not the owner of the advance money paid, as the buyer has not provided anything in lieu of that amount.  Thus, confiscating the amount paid as advance in sale of flats, plots or other articles if the sale is not completed, is not impermissible and forbidden.

As given in Bidayatul Mujtahid, Pg. No. 162/163.

And Allah knows best.

Mufti Hafidh Syed Ziauddin Naqshbandi Qadri

[Professor, Islamic Law, Jamia Nizamia,
Founder/Director Abul Hasanaat Islamic Research Center]
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