Monday, July 22, 2024
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Buyback clause, legal deed

Fatwaa ID: 1493

Assalamu’alaikum warahmatullahi wabarakatuh 

So if I have a house worth 400k and an investor gives me 100k to buy 25% share of the house. I would buy that share back over let’s say 10 years for 120k.

My question is that if we have a legal agreement which states all this and this document can prove ownership in court, does the client’s name have to be on the deed? The reason I’m asking is because my taxes may go up everytime I add or remove people from the deed.

In the Name of Allaah, the Most Gracious, the Most Merciful.
As-salaamu ‘alaykum wa-rahmatullaahi wa-barakaatuh.

  1. It is not permissible to have a buyback clause or condition. The sales of the shares may not be conditional to the original owner repurchasing them. A promissory note however may be signed separate from the sales contract expressing his intent.
  2. It is not necessary to add the new partner to the legal title deed. The sales will be valid without it. The ownership will be transferred with the mutual agreement. However, having some documentation, as in the enquired situation, is advisable and appropriate.

And Allaah Ta’aala knows best.
Mufti Muajul I. Chowdhury
Darul Iftaa New York

وصل اللهم وسلم وبارك على سيدنا محمد وعلى ءاله وصحبه أجمعين


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