Question Summary:
Home financing product of MCCA

Question Detail:

 
I was planning to buy house In Australia without interest, There is one Islamic bank MCCA that proivdes Loan based on Shariah Loans,
The process how it works the link is below
"http://www.mcca.com.au/how-it-works" 
Also there are approvals from Scholars for this loas schemes.
"Our Shariah Advisory Board members are among Australia’s leading scholars. They include the Mufti of Australia Dr. Ibrahim Abu Muhammad, Shaykh Gul Saeed Shah and Shaykh Wissam Ahmad Zaatiti. We also continuously present our products to Shari'ah advisors abroad that have also endorsed our products. Some names amongst these include Dr. Muhammad Dawud Bakkar, Dr. Oussama A. El Rifai and Dr. Mabid Ali Al-Jarhi."
Kindly let me know if this is Halal from Islamic point of View ?

Answer :

In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh
We have browsed through the MCCA website. We understand that the home financing product of MCCA is based on Ijarah Munyahiyah Bi al-Tamleek (Lease and ownership upon termination). Therefore all the rules and laws of such a concept will be applicable. Furthermore the financier appoints the client as agent to identify the house. The house is purchased by the financier and leased to the client for a fixed period of time and gifted to the client upon expiry of the lease. 
 
In general we have noticed that the contracts of such schemes are interconnected to each other and are not separable and independent. That is not Shariah Compliant. What if the bank does not gift the house to the client? Does the client have a legal claim against the bank/financier for the proposed gift? Furthermore how is the agency and purchase separated under such an arrangement? Is there any home insurance? If so, if the insurance volitional and mandatory from the government and how is the insurance charged under the contract? Kindly provide the terms and conditions of the contract in order for us to issue a specific ruling. We understand the sensitivities surrounding such an issue. We are more than willing to engage with the bank/financier in positively promoting and enhancing Islamic Finance via our skills and knowledge.
 
And Allah Ta’āla Knows Best
 
Ismail Desai,
Darul Iftaa
Checked and Approved,
Mufti Ebrahim Desai.