Question: 

1.

There is a person who constructs buildings. He is called a builder. He purchases property, constructs houses and shops on it and then sells them. Before constructing the houses he draws up the plans and then shows it to customers. He then sells them the one they like. He gives the details of the size of the building, how many rooms it will have, their size etc. He says that you will have to make a down payment of a fixed sum. Then he says you will pay the remainder in $1000 instalments. He mentions the total cost. After the building is constructed we will deal with the legal issues in the government and then hand over the house to you. Is this type of contract permissible?

2. 

Zaid purchased a building in this manner from the builder. After paying a few installments he sold it with profit to Bakr. Is it permissible for Zaid to sell the house before it was completed and before the house was handed over to him?

3.

Zaid purchased a house in this manner (mentioned in question 1) but after paying a few instalments, he sold it back to the same builder with profit. Is this permissible in Shari’ah?

Answer: حامدا ومصليا ومسلما

1.

If this type of sale has become conventional then it will come under the ruling of istisnaa’ (contract of manufacture) and will be permissible.

ومنها ان يكون مما يجري فيه التعامل بين الناس الخ (بدائع الصنائع 5:3)

2.
This (second) sale is invalid. (i.e. the sale between Zaid and Bakr. Translator’s note)

لانه بيع ما ليس عند الانسان وانما اجيز في الاستصناع استحسانا وهذا ليس من الاستصناع كما هو ظاهر

3.
This (second) sale is invalid. (Zaid’s reselling to the builder with profit. Translators note)
كما هو ظاهر
 

And Allah Ta’aalaa knows best

(Hazrat Mufti) Ahmed Khanpuri (May Allah preserve him)

The answer is correct

(Mufti) Abbas Dawud Bismillah (May Allah preserve him)
Mahmoodul Fataawaa (2/465-467)