Is it permissible to sell vacant plots of land prior to owning it? 

Q. A company is selling vacant plots of land to buyers but the company does not have ownership of the land as yet. They expect to get ownership and transfer of the land in one years time after getting enough buy-in from their buyers. Is it permissible for the company to sell vacant plots of land in this way?

A. It is not permissible for a company/seller to sell vacant plots of land without the land entering into their ownership.

Rasoolullah Sallallahu Alayhi Wasallam said: “…It is not lawful to profit from that which one does not possess, nor sell that which one does not have.” (Tirmidhi 1234)

Therefore, if the company is selling vacant plots of land to buyers without any Shariah-Complaint structure in place to effect ownership or transfer at a later stage, the transaction is null and void.

There are various Shariah-Complaint methods that can be adopted to facilitate raising of capital for the sale and purchase of land which one may not possess or own. One should consult with an experienced Alim/Mufti to determine the correct Shariah Compliant method.

Allah Ta’ala Knows Best

Mufti Ismaeel Bassa

themufti.com