Investing into land

CategoriesTrade, Business & All Things Money [490]

A family wants to invest into under developed land in Dubai, the family has a friend in England to which you give money to and he invests the money for you, the family wants to invest 300k very quickly, they had a meeting with the agent in England and here is the contract deal:
He takes the money and invests it for the family, the longer you invest the money the more money you get back as the value
increases for the land in dubai every year, every year they expect an annual investment increase of 25% and the family wants to keep it for 3 years thus they are expecting an investment income of upto 40%. The agent says that the family can expect an income of upto 40% or more in
relation to how much the property land is going up every year, this is also stated on the contract drawn by the agent in England, for reassurance the agent says to the family that if the land they invest in goes into liquidation then he will refund their money back (which is not jaaiz as this is a investment and for that has to be a risk involved), however this is not written in the contract and is done via word of mouth, the agent is willing to give the family money from his own pocket as he has
assets worth upto 55 million pounds if the land the family invests in goes into liquidation,please could you clarify all this and let me know if what the family are doing is jaaiz or not. They require an answer as soon as possible as they have put their properties up on the market so that they can invest in dubai.

In the aforementioned scenario the investment the family want to make into an underdeveloped land in Dubai will be permissible.

The money one invests into the land and the extra money one receives will not be considered as interest (riba), but is a profit, hence it will be permissible.

As interest is defined in Raddul-Muhtar as “an increase in one good for another in an exchange, without a compensation (iwad) for the increase.” (Raddul Muhtar P398 v7)

This sort of investment is similar to buying shares in a company where the more money one invests into the company the more benefit one will receive.

Mohammed Tosir Miah

Darul Ifta Birmingham

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