A friend recently asked me if he could buy a piece of land in the new Phase VIII of Defence Housing Authority (DHA) Lahore from someone who had won one-kanal of land in a draw. The current owner paid four installments of the price that was due, in quarterly payments over a period of five years. I asked for more information before giving my opinion in light of shari’a. The following information was provided.
1. The current owner had an allotment letter stating that DHA Lahore had allotted a specific one-kanal piece of land to him, which was shown on a future map of the Phase VIII of DHA Lahore. On actual visit to the site, it was found that Phase VIII had yet to be developed and there was no demarcation of plots.
2. The owner’s file also had a copy of the list of the other winners of the draw that was conducted by DHA to pick up buyers of different sizes of the plots.
3. He also had a payment schedule for the price, which showed payment dates over a period of five years (2010-2015). 4. The possession of the piece of land was going to be affected after all the remaining scheduled payments were made. The current owner was asking the same price as he had already paid in the four quarterly installments because he wanted to exit from the transaction. The question that arises is whether it is permissible in shari’a for so-called owners to sell pieces of land before taking possession.
This case may provide an example of the prophetic prohibition of selling something that someone doesn’t possess or own. Shari’a does not allow anyone to sell something that they do not own, or rightfully possess by way of agency. Thus, it is not permissible for a son to sell his father’s house without the father’s explicit permission and/or instructions.
In the present case, the prospective seller legally owns the plot of land and the development plan clearly shows the distribution of land into small plots of which one is clearly marked as owned by him. The actual possession is subject to the owner paying all what is due in terms of the price and the development charges.
The Shari’a maxim of “Do not sell what you do not have/own” seems relevant to the current problem. The seller, however, clearly demonstrates that a plot of land has been allotted to him for which he is required to pay quarterly for a period of five years. Apparently, the prospective seller is in the process of buying a specific piece of land. What is the shari’a view on such a spatial sale and purchase of land?
A valid sale contract in shari’a requires:
1. Two willing transacting parties (buyer and seller)
2. Existence of object of sale and agreement
on delivery
3. Agreement on price and payment schedule
4. Offer from seller and acceptance from buyer
(or vice versa)
In the current case, the price is being paid over time and the delivery takes place at the end of the payment schedule. In other words, both the price and delivery are not on spot. This type of arrangement is not recognised as a valid sale in shari’a. At best, it could be considered as an “agreement to buy and sell subject to the agreed payment schedule.” If during the “agreement period” the land remains in the possession of the seller (in this case DHA), the sale remains incomplete and both the parties have a right to walk away, subject to the return of the price to the buyer.
Therefore, it seems as if the prospective seller is trying to sell a piece of land that he does not fully own as yet. From a shari’a viewpoint, onward sale of land that has been allocated to someone who has yet to pay the full price to take its possession is not a valid sale.
There is a need to look into the sale and purchase of land and property through housing societies and schemes to determine if such sales are valid. Shari’a rules are comprehensive enough to safeguard the interests of transacting parties, especially buyers. In the absence of shari’a scrutiny, a housing scheme scandal is imminent, which will be yet another blow to the already fragile economy of Pakistan.
The writer is a Shari’a advisor to a number of banks and financial institutions and can be contacted at [email protected]
