Friend financially assisting one to purchase a house

Q: I had rented a house and thereafter negotiated with the landlord to purchase the house. As I did not have the funds to purchase the house, my friend offered to assist by loaning me the full purchase price payable to him as arranged. He forwarded the monies to the seller and the legal transfer process from the seller to me commenced. Soon thereafter my friend went through some financial problems and his family members demanded that I repay the loaned amount to him (my friend) within 24 hours. I was very troubled as I could not arrange such a large sum within such a short time and whilst I was at work another friend happened to pass by. We greeted one another and he noticed the troubled look on my face. Upon his insistence I explained to him the situation and he there and then phoned his bank and asked them to transfer the money to my first friend's account. I was surprised and asked him about the repayment and he said that the house is yours and we will talk about the repayment. Upon my insistence he suggested that I pay 4000 rental monthly for now and then we will discuss the repayment.

NB. Since the house was in the process of getting transferred to my name from the seller, he (second friend) asked the conveyancer to continue with the transfer into my name and when I queried with him, he did mention that the house is yours and it is for you. I continued paying the monthly stipulated rental until one day he passed away.

Upon his death I told my wife to ask my friends widow about the house and she said that she is aware of the situation. She sent her brother to my house who then said that they prefer keeping the house as an investment for the children and they do not want to sell. I did not pursue the matter further until I recently mentioned it to an aalim who felt that it could probably be that I am paying interest and the widow is receiving interest as the amount given to me by the second friend was a loan and not a purchase price of the house.

Can you please advise as to what the status of the above transaction is and who is the owner of the house and what is the status of the monies forwarded to me by my second friend as I would not like be involved in interest in anyway.

A: Since you had purchased the house from the initial owner and your friend had merely assisted you to finance the house, the house belongs to you. Charging a rental is incorrect. You only need to pay him the amount that he had paid on your behalf.

And Allah Ta'ala (الله تعالى) knows best.


Answered by:

Mufti Ebrahim Salejee (Isipingo Beach)