Question Summary:
Islamic Mortgage in Canada that is known as Zero Mortgage

Question Detail:

Assalamualikum, 
 
I was told that Mufti Ebrahim Desai is the main scholar backing the Islamic Mortgage in Canada that is known as Zero Mortgage: http://www.zeromortgage.ca/ with a financial institution, Think Financial: http://www.thinkfinancial.ca/?&mkwid=sgaF3aOjd|dc&pcrid=93004652792&pkw=think%20financial&pmt=e&gclid=CKzTsO7ontACFRCqaQodQnIGnw#think-financial
 
I just wanted to confirm that Mufti Ebrahim Desai is actually backing this Halal Mortgage. I have attached the Musharakah agreement that i was given by them. Along with this, we are required to sign a second document from the Financial institution stating that we will be paying interest where the interest rate is the same as the Rent payment of the Halal Mortgage. 
 
Thank you soo much for helping me with this matter. 
 
Wasalam, 

Answer :

I have studied the Musharakah Home Financing Agreement of Zero Mortgage whose offices are based in suite 2408, Emirates Financial Towers(South), Dubai International Financial Centre(DIFC), Dubai.
I understand the contract to be a Diminishing Musharakah Contract which comprises of three separate steps,
1)    Partnership of the house between the client and Zero Mortgage.
2)    The client hires Zero Mortgages portion of the house.
3)    The client will gradually purchase Zero Mortgages share of the property as units.
The document refers to a Musharakah Agreement. The concept of Diminishing Musharakah is deduced from the last paragraph of the contract after clause 16 in which there is reference to Ijarah and the client buying Zero Mortgages share. The Shariah Compliance of a Diminishing Musharakah depends on the Shariah Compliance of each one of the three transactions in references. Those contracts are not attached. Furthermore, in the Musharakah Contract clauses 7,8 and 11 do not reflect the laws of Musharakah. It is also important to note that the sequence of the various transactions is vital in determining the Shariah Compliancy of the transactions. That too is not attached here for my observations.
I also have difficulty in understanding the deal being done in Canada and Clause 14 which state, `This agreement shall be governed by the laws of United Arab Emirates, and the parties hereto agree to the exclusive jurisdiction of the courts of United Arab Emirates.’
Accordingly, and according to the document in reference, it is my submission that the Musharakah Home Financing Agreement of Zero Mortgage does not reflect a proper Shariah Compliant Musharakah and Diminishing Musharakah. If I am provided with further conclusive details of the contract, I will review my opinion at that stage.
MUFTI EBRAHIM DESAI