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Buying and Selling

While booking in projects which are under construction


While booking in projects which are under construction, the plots are available but the flats are not in existence officially. Due to the partial payment, the flat is considered to be in the ownership of the person who booked it, however the possession is given to him by the constructors only after the completion of work and the documentation which establish the ownership of the buyer too is completed at the same time. However, during the process of all these stages, people almost use to buy and sell and earn profits as well. Therefore what is the ruling of the profit so earned by this buying and selling and what is ruling of the amount charged by the builders as ownership fees (in which government does not involve)

الجواب حامدا و مصلیا

In the name of Allah, the Most Beneficent and the Most Merciful In the name of Allah, the Most Beneficent and the Most Merciful
Let it be known that in such a circumstance, purchasing and booking of a flat or an office which is being built from any building, before the completion of its construction is, correct and permissible, if it is for the first time in view of Bai Isthisna’a (Istisna tansaction).
And in Istisna transaction, the ownership of the sold item does not transfer to the purchaser until the item is manufactured and handed over to the purchaser. Therefore it is not permissible according to the Shari’a for the purchaser to sell it ahead to another buyer due to its non-existence and not having the ownership. Therefore selling it ahead or doing brokerage and getting commission on the pretext of legal authority and documents, both, are not permissible and prohibited as per the Shari’a, hence it is necessary to avoid and refrain from such acts.

Allah knows best.