Murabaha on Lands
Literally, Murabaha means selling on profit. The Sharia application of this term is as follows:
A purchaser approaches a seller, provides the details of goods he wants to purchase from a supplier and promises the seller that he will purchase the goods from him at a price, which will include the cost of the goods incurred by the seller plus an agreed fixed amount or percentage of profit. The seller then purchases the goods for himself in his own name and sells it to the purchaser on the terms already agreed upon. It must be always kept in mind that the ownership of the goods during the period from purchasing it from a supplier and selling it to the purchaser, irrespective of the span of that period, lies in name of the seller and he bears full risk as the owner of the goods during that period.
Applying this mechanism, we purchase a plot of land as per your specifications and your promise to purchase it from us on deferred payment basis. For this purpose, a Murabaha agreement is signed, the ownership of the land transfers to you and we obtain a security/guarantee from you to ensure prompt and timely payment of the installments due from you as per the Murabaha terms.
Details of the terms under which this product is offered are outlined below:
Terms of Financing:
Down Payment : Minimum 50% of the purchase price*
Transaction Period : Up to 5 years
Mode of Payment : Quarterly, Semi-annual or Annual terms are available
Source of Payment : Business cash flows, rentals from other properties
Profit Rate : Fixed throughout the financing period
Security : First class mortgage on the land, post dated cheques covering installments
Documentary Requirements:
Primary documents comprise:
Individuals
1. Copy of valid passport
2. Completed finance application form
3. Copy of site plan
4. Copy of title deed
Companies
1. Copy of valid Trade License
2. Copy of Commercial Registry
3. Copy of Partnership agreement (in case of partnerships)
4. Copy of valid passport of partners (in case of partnerships)
5. Copy of valid passport of authorized personnel and copy of Articles of Association defining their powers
6. Copy of site plan
7. Copy of title deed
8. Last 3 years’ financials
*Requirement may be lowered if additional security is provided.