Fatwa ID: 08019
Answered by: Mawlana Abdurrahman Mohammad
Question:
I need help with the following matters. I would like to know what Sharia says about this. My brother-in-law and I bought a property in London in 2013. The price was £165,000 and bought through a bank mortgage. When we bought, we agreed to live together, and when we have more money or the property goes up, we would move into a big house or buy two separate houses. Now the property price is £330,000. The bank mortgage balance is £100,000. I asked for my share because I want to move somewhere else. What is my share in the property at the moment, even though we don’t want to sell the house? My brother-in-law wants to keep the house.
In the name of Allah, the Most Gracious, the Most Merciful
Answer:
First and foremost, I would advise that you contact your lending agency and ask them for clarification regarding the shares and distribution of your property. Consult experienced lawyers and accountants first, preferably those who have knowledge of the Shariah. If not, you may consult the following guide for advice.
Review Ownership Agreement
If you have a written agreement, such as a contract or a deed, follow its terms to determine your share. If no written agreement exists, clarify your share based on past verbal agreements.
Assess Property Value
Note the original purchase price (£165,000). This will be used to calculate your share percentage. Also, keep track of the current market value (£330,000). This may change based on time. Consider obtaining an appraisal if needed. Ultimately, the price would be what both parties agree on as in a typical sale.
Clarify Mortgage Details
Track the outstanding mortgage (£100,000). Confirm whether both parties are equally responsible or if it’s in one person’s name. Make necessary arrangements to transfer the loan.
Calculate Contributions
To calculate your share percentage, sum up all your principal payments. This is the sum of your down payment and monthly payments. Track each party’s contributions to the mortgage principal, excluding interest and fees. Calculate ownership of shares by dividing each party’s total contribution by the original purchase price of the house.
How to Calculate Percentage Share
Your Share = (Your Principal Contribution / Original Purchase Price) × 100
Brother-in-law’s Share = (Brother-in-law’s Principal Contribution / Original Purchase Price) × 100
Bank’s Share = (Outstanding Mortgage / Original Purchase Price) × 100
Determine Your Share’s Value
Agree on a price with your brother-in-law or get an appraisal. Multiply your ownership percentage by the agreed-upon property value. This can help estimate how much your share is worth. Note that there may be hidden costs and taxes associated with the property transfer.
Share Value = Share Percentage × Current Property Value
Seek Professional Help
Talk to a lawyer or real estate agent to formalize the division and address any legal issues. Consult with an accountant to ensure proper financial calculations. Before finalizing the decision, consult with a scholar specialized in Islamic financing to ensure Shariah compliance.
Only Allah (عَزَّ وَ جَلَّ) knows best.
Written by Mawlana Abdurrahman Mohammad
Checked and approved by Mufti Mohammed Tosir Miah
