The Majlis Archive

Finance - Banking - Business The Majlis Vol 23 No 08, p.4

I bought a property from a developer. The condition attached to the sale is that all buyers must become members of the Homeowners Association.

Question

I bought a property from a developer. The condition attached to the sale is that all buyers must become members of the Homeowners Association. The directors are mostly Muslims. The chairman too is a Muslim. These Muslim directors have started to charge a penalty called "Late Building Fees" or "Late Completion Fees". What is the Shariah's ruling regarding such penalties?

Answer

Firstly, the condition of becoming a member of the association is baatil. The sale is rendered faasid (corrupt / not permissible) by the imposition of this condition.

Secondly the penalties which the Homeowners Association is levying are Haraam riba. Since the members are Muslims, they must take notice of war from Allah Ta'ala and His Rasool for oppressing other Muslims with their riba penalty demands.

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The Majlis Vol 23 No 08
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