Investing Buyer’s Funds into an Interest Account

Question

Q1. As a conveyancer, we are required to invest purchasers money in an investment account, which accrues interest or profits from Islamic accounts with FNB. Does this constitute facilitation of interest as it is compulsory in the profession?

Q2. Secondly we have estate agents that want advances on there commission, so they request interest bearing finance from an institution on the basis of the transfer. From our side, we have to sign a form confirming that we are doing the transfer and that we are about ready to transfer. Secondly, once the matter is registered, we have to make payment to the finance institution, which amount includes interest. Please advise if the above constitutes facilitation of interest and is impermissible?

Maulana Abdul Kader Fazlani · Accepted Answer

A1. If investing the purchaser’s funds in an interest-bearing investment is a requirement by law, as stated by you in the query, then one will be permitted to adhere to the said requirement. However, we advise that Muslim clients should appoint Muslim conveyancers to dispose of the interest funds to the correct recipients as required in Shariah, as this will protect them from taking benefit from the Haraam funds.

A2. There is no harm in providing a letter of confirmation stating that one is attending to transfer of the property. However, one should not assist in filling in any documentation that will assist the estate agent in applying for finance. Furthermore, if the estate agent appoints you as a conveyancer to transfer their commission to a financial institute, then you may transfer the funds on their behalf. This will not render you sinful as you are in no way involved in assisting the estate agent in applying for an interest-bearing loan, nor are you writing or witnessing the transaction which is prohibited in the Hadith Sharif.

AND ALLAH TA’ALA ALONE IN HIS INFINITE KNOWLEDGE KNOWS BEST!

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