Property investment

15 Oct 2018 Ref-No#: 1095

As Salaam Ua Alaikum. As one would invest in a company by buying shares and remaining a silent investor having absolutely no input in the day to Day running of the company and simply taking ones dividend at the end a particular period. (For example buying shares in Apple stock – you have no no input and take dividend only. How they operate the company – and whether they raise capital through issuance of shares or from banks via loans or other means is not shared with you)

Can one invest in a company which will purchase property and simply return one a dividend on completion of the renovation of that property and subsequent sale. If the persons controlling the company raise other capital to fund the company business by other means also such as bank loans etc (again you as a simple inverstor/shareholder would not be taking any loans or be part of the process of any loans from banks) – Would this be permissible.

Answer

Wa’alaykum as Salam wa rahmatullahi wa barakatuhu,

Whilst on the surface it may seem that the investment is straightforward, and hence permissible, the best is to get a Mufti to study the entire contract. There may be just one clause in the contract which might affect the whole deal.

Yes, even if the company is attaining funds from other sources, some of which are not permissible, it will still be permissible for you to take the dividends on your share.