Interest Earned During Transfer Of Ownership

When a buyer intends purchasing property, then after finalizing and concluding the deal with the estate agent, the funds are deposited into the conveyance’s trust account. Once the funds have been deposited the lawyer requests the buyer to sign a particular document which authorizes the lawyer to invest the funds into an interest bearing account on behalf of the buyer. The funds then remain in the account until the transfer process is completed. Finally the seller is paid (after transfer of the property) and the accrued interest is paid out to the buyer.

It is not permissible for the buyer to consent to the lawyer investing the funds in an interest bearing account with the purpose of accumulating interest due to the impermissibility of Riba. If one had consented to such an investment, then the accumulated interest must be disposed off immediately in the correct avenues; i.e. either by returning the funds to the banking institute or by giving it to the poor without any intention of reward, the latter being the better option of the two.

Therefore, it will not be regarded as hadiyyah or a gift from the lawyers.