Series of Answers by the Eminent Scholar Ata bin Khalil Abu al-Rashtah, Amir of Hizb ut-Tahrir, to Questions from his Facebook Page Followers
Answer to a Question
To Mohammad al-Qaisi
Question:
Assalamu Alaikum Wa Rahmatullahi Wa Barakatuhu,
I would like to ask about the following purchase format: (buying a car with a down payment and the remainder in personal checks, but the seller stipulates that ownership will not be transferred until the value of the last check is received). Is this considered Halal or not? May Allah bless you.
Answer:
It is not permissible for a seller to pledge a house (or car) after selling it on credit, because this falls under the category of "pledging the sold item against its price" (rahn al-mabi' 'ala thamanihi). There is a difference of opinion among jurists regarding this; some permit it under certain conditions, some forbid it, and others permit it in some cases and not in others.
What I find most weightier is that this is not permissible. This is because when a car or house is bought on credit or in installments, it becomes the property of the one who bought it. They have the right of disposal over it—selling it, renting it, or utilizing it, such as living in it or letting others live in it, etc. What is permissible in such a case is for the seller of the car to either be patient with the debtor until the debt is paid, or to take something else as a pledge other than the car he sold him, such as a piece of gold, etc. This remains with the seller until the buyer of the car pays the full agreed price, after which the pledge (the piece of gold, etc.) is returned to the buyer. It was authentically reported that the Messenger of Allah ﷺ:
اشْتَرَى رَسُولُ اللَّهِ ﷺ مِنْ يَهُودِيٍّ طَعَاماً بِنَسِيئَةٍ فَأَعْطَاهُ دِرْعاً لَهُ رَهْناً
"The Messenger of Allah ﷺ bought food from a Jew on credit and gave him his shield as a pledge." (Narrated by Muslim from Aisha, may Allah be pleased with her).
If the payment deadline arrives and the debtor refuses to pay or is unable to do so, the pledge is sold. From its price, the remaining amount owed to the creditor is taken, and any surplus is returned to the debtor. This is because the pledge remains the property of its owner, according to the Hadith:
لَا يُغْلَقُ الرَّهْنُ مِنْ صَاحِبِهِ الَّذِي رَهَنَهُ
"A pledge is not locked away from its owner who pledged it." (Narrated by ash-Shafi'i from Sa'id bin al-Musayyib). This means if its value exceeds the debt, the surplus is returned to the owner.
As for the seller pledging the sold item against the debt or installments, this is not permissible. Sale on credit or installments is a complete and finished sale; the buyer gains full ownership of the sold item as soon as the sale is contracted on credit or installments (e.g., a payment every year or less or more according to the agreement). If the sold item is held as a pledge, it constitutes an injustice to the buyer and an infringement on their ownership. Since a credit or installment sale is a valid and complete sale, the buyer owns the item and can dispose of it as they wish. It is not permissible after the sale contract for the seller to pledge the item, because this prevents the buyer from exercising their right of disposal over the property they bought.
We have previously answered this in detail on May 24, 2015. I will repeat it here for your benefit:
(This issue is known in Fiqh as "pledging the sold item against its price," meaning the sold item remains pledged with the seller until the buyer pays the price. This issue does not arise if the seller and buyer act as the Messenger of Allah ﷺ said in the Hadith narrated by al-Bukhari from Jabir bin Abdullah:
رَحِمَ اللَّهُ رَجُلاً سَمْحاً إِذَا بَاعَ، وَإِذَا اشْتَرَى، وَإِذَا اقْتَضَى
"May Allah have mercy on a man who is easy-going when he sells, when he buys, and when he demands his due."
However, they sometimes disagree on whether the goods should be received first or the price paid first. After the sale contract, the seller might resort to withholding the goods—i.e., pledging them—until the price is paid. Hence, this issue arises. Jurists differ on this: some permit it with conditions, some do not, and others distinguish between cases.
What I find most weightier after studying this issue is as follows:
First: The Type of Sold Item:
- Items measured by volume (makil), weight (mawzun), or length (madhru'), etc., like selling rice, cotton, or fabrics.
- Items not measured by volume or weight, etc., like selling a car, a house, or an animal.
Second: The Price of the Sold Item:
- Immediate (hal), meaning cash, such as buying the item for ten thousand paid immediately.
- Deferred (mu'ajjal) for a period, such as buying the item for ten thousand to be paid after a year.
- Partially immediate and partially deferred, such as buying the item with a down payment of five thousand and paying the other five thousand after a year, or in monthly installments.
Third: The Shari’ah ruling differs based on the aforementioned points:
Case One: The sold item is not measured by volume or weight (e.g., a house, car, or animal):
- Price is cash: i.e., you buy a car for ten thousand in cash, and this is stipulated in the contract. In this case, it is permissible for the seller to withhold the goods (keep them as a pledge) until the immediate price is paid according to the contract. The evidence for this is the Hadith narrated by at-Tirmidhi (who classified it as Hasan) from Abu Umama, who said: I heard the Prophet ﷺ saying in the sermon of the Farewell Pilgrimage:
العَارِيَةُ مُؤَدَّاةٌ، وَالزَّعِيمُ غَارِمٌ، وَالدَّيْنُ مَقْضِيٌّ
"A borrowed item must be returned, a guarantor is liable, and a debt must be repaid."
The point of evidence in the Hadith is his ﷺ saying, "and a debt must be repaid." If the buyer takes the goods before paying the price, it becomes a debt, and "a debt must be repaid." Priority is given to paying the debt as long as the purchase was for cash. In other words, the price must be paid first since the contract stipulated immediate cash payment. Al-Kasani says in Bada'i' as-Sana'i' commenting on the Hadith: "The Prophet ﷺ described debt as being 'repaid' in a general or absolute sense. If the delivery of the price were delayed after the delivery of the sold item, this debt would not be 'repaid' [immediately], which contradicts the text." Therefore, it is permissible for the seller to withhold the sold item until the buyer pays the price, so that no debt remains. This aligns with the contract because the sale was not on credit but for a cash price.
Price is deferred: i.e., you buy a car for ten thousand to be paid after a year. In this case, it is not permissible to withhold the goods until the price is paid, because the price is deferred according to the contract with the seller's consent. He is not allowed to withhold the goods to guarantee the price when he himself sold it on credit, thereby waiving his right to withhold the goods. Thus, he must deliver them to the buyer.
Price is partially immediate and partially deferred: i.e., you buy the car with a down payment of five thousand paid immediately, and the other five thousand after a year or in installments. In this case, it is permissible for the seller to withhold the goods until the immediate portion (the down payment) is paid. After that, it is not permissible for him to withhold the goods to collect the deferred installments, for the reasons mentioned in points 1 and 2.
The conclusion is that it is permissible for the seller to pledge the goods against the immediate price. That is, if the sale contract is for an immediate price to be paid now, the seller may withhold the goods until the buyer pays that price according to the contract.
Likewise, it is permissible for the seller to withhold the goods until the buyer pays the immediate down payment according to the sale contract.
It cannot be argued here: how can the buyer pledge his goods before taking possession of them (i.e., before owning them)? This is because a pledge is only valid for what is valid to be sold. Since purchased goods cannot be sold until possession is taken—based on the Hadith narrated by al-Bayhaqi from Ibn Abbas: The Messenger of Allah ﷺ said to Attab bin Asid:
إِنِّي قَدْ بَعَثْتُكَ إِلَى أَهْلِ اللَّهِ، وَأَهْلِ مَكَّةَ، فَانْهَهُمْ عَنْ بَيْعِ مَا لَمْ يَقْبِضُوا
"I have sent you to the people of Allah and the people of Makkah; forbid them from selling what they have not yet taken possession of."
And the Hadith narrated by at-Tabarani from Hakim bin Hizam who said: "O Messenger of Allah, I engage in many sales; what is halal for me and what is haram?" He said:
لَا تَبِيعَنَّ مَا لَمْ تَقْبِضْ
"Do not sell what you have not yet taken possession of."
These Hadiths explicitly forbid selling what has not been possessed. So how can the sold item be pledged before possession?
This argument is not applicable because these two Hadiths refer to goods measured by volume and weight. As for other items like houses, cars, and animals, they can be sold before possession based on the Hadith narrated by al-Bukhari from Ibn Umar (ra): "We were with the Prophet ﷺ on a journey. I was riding a difficult young camel belonging to Umar, and it was getting ahead of the people. Umar would check it and push it back... The Prophet ﷺ said to Umar, 'Sell it to me.' He said, 'It is yours, O Messenger of Allah.' He said, 'Sell it to me.' So he sold it to the Messenger of Allah ﷺ. Then the Prophet ﷺ said:
هُوَ لَكَ يَا عَبْدَ اللَّهِ بْنَ عُمَرَ، تَصْنَعُ بِهِ مَا شِئْتَ
'It is for you, O Abdullah bin Umar; do with it as you wish.'"
This is a disposal of the sold item (by gifting it) before taking possession, which indicates the completion of ownership of the sold item before possession and indicates the permissibility of selling it because the seller's ownership is complete.
Accordingly, it is permissible to pledge the sold item before possession as long as it is permissible to sell it before possession. However, this only applies if the sold item is not measured by volume or weight—such as a house, car, animal, and the like—and in the case of a sale for an immediate price or if there is an immediate down payment in the contract. In such cases, it is permissible to pledge the sold item before possession until the immediate price or down payment is paid.
Case Two: The sold item is measured by volume or weight, such as buying quantities of rice, cotton, or fabrics. In this case, it is not permissible to withhold the sold item for its price, regardless of whether the price is immediate, deferred, or in installments:
If the price is deferred, he cannot withhold the goods as explained above.
If the price is immediate, he still cannot withhold the goods (pledge them), because it is not permissible to pledge items measured by volume or weight before possession according to the Prophet’s ﷺ Hadith mentioned above. In the case of an immediate price, the seller has two choices: Either sell the goods for an immediate price, deliver them, and be patient for the payment—whether paid now or later—without pledging the goods; or not sell the goods at all.
Therefore, if a sale is contracted for an immediate or deferred price when the sold item is measured by volume or weight, it is not permissible for the seller to pledge the goods until the price is paid.
This is what I find most weightier, and Allah is All-Knowing and All-Wise.
Your brother, Ata bin Khalil Abu al-Rashtah
22 Jumada al-Akhirah 1441 AH 16/02/2020 CE
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