|
According to this concept, a financier and his client participate either in the joint ownership of a property or an equipment, or in a joint commercial enterprise. The share of the financier is further divided into a number of units and it is understood that the client will purchase the units of the share of the financier one by one periodically, thus increasing his own share until all the units of the financier are purchased by the client so as to make him the sole owner of the property, or the commercial enterprise, as the case may be.
|
The proposed arrangement is composed of the following transactions:
-
Creation of joint ownership in the property (Shirkat-ul-Milk).
-
Giving the share of the financier to the client on rent.
-
Promise from the client to purchase the units of share of the financier.
-
Actual purchase of the units at different stages.
-
Adjustment of the rental according to the remaining share of the financier in the property.
In the above mentioned arrangement, following conditions must be taken care of:
- The agreement of joint purchase, leasing and selling different units of the share of the financier should not be tied-up together in one single contract. However, the joint purchase and the contract of lease may be joined in one document whereby the financier agrees to lease his share, after joint purchase, to the client. At the same time the client may sign one-sided promise to purchase different units of the share of the financier periodically and the financier may undertake to reduce the rent on remaining units accordingly.
- At the time of the purchase of each unit, sale must be affected by the exchange of offer and acceptance at that particular date.
- It will be preferable that the purchase of different units by the client is affected on the basis of the market value of the asset as prevalent on the date of purchase of that unit, but it is also permissible that a particular price is agreed in the promise of purchase signed by the client.
Download Presentation
|
|
|
|