Almost scholars agreed that there is no any riba’ on the cash sales and purchases. Riba’ commonly occurred on credit’s transactions. But, on the development of business today we recognized several kinds of sales and purchased contracts and agreements. One of latest kind of contract that well recognized particularly on real estate’s and properties sales and purchased is BBO “Buy Back Option Agreement”. In the first part of my essay I would like to explain about the definition of BBO. Then, I would like to give some comments and views on available example, and finally I will try to give some laws preference on Buy Back Agreement applications.
Keyword: riba’, cash, credit, contract, agreement, buy back option
The definition of Buy Back Option Agreement
Base on my own experience buy back option is a kind of agreement on contract that band some parties on several circumstances. To make it clear here is the example of buy back option agreement’s application.
The Application of Sale and Purchasing of House
Several months ago a friend of me bought a house from someone. Here is the detail of transaction:
Let’s illustrate that the parties involving on this transaction are Mr. A and Mr. B, Mr. A wanted to sell his house cost 2 billion IDR to Mr. B with some conditions. The conditions purposed by Mr. A are:
1. He wanted to sell his house to Mr. B but, if it possible he intended to stay in that house afterward. For this circumstance he will pay annual rental fees to Mr. B.
2. Beside sale and purchased agreement there should be another contract that defines a “buy back agreement” Mr. A able to repurchase his sold house after determined agreed time with Mr. B.
3. After 5 years Mr. A will repurchase his sold house from Mr. B with additional value 30% or around 2.6 billion IDR.
4. Every single transaction is paid in cash.
These conditions are what Mr. A purposed on this transaction.
The Comments and Views on the Available Case
From the case above we could summarize that there are 2 different transactions and 2 different agreements in a single time, the transaction of sale and purchasing, the transaction of rent, the agreement of sale and purchase and the agreement of repurchasing. In my opinion there are no serious syari’ah obstacles available on it. That sale and purchasing transaction is completed, there are 2 parties (seller and buyer) as the ‘aqidain, there is a house as the object of contract and there is sale and purchasing agreement on it.
Also the rent transaction, it already completed some preconditions of rental agreement. But the obstacle is available on the banded repurchasing agreement among Mr. A and Mr. B. On the agreement before, Mr. A purpose some conditions that should be agreed by both parties, one of them is the condition to repurchase his house back after 5 years. In my opinion repurchasing activity is fine as long as it does not being designed before, means that it happen spontaneously without any binding agreement on one party involved on the contract. The obstacle on previous case is Mr. A. was trying to band Mr. B with his banded repurchasing agreement.
Some laws preference for BBO
The Islamic legal notice on sale and purchasing activity:
1. Al-baqarah verse 275 and An-Nisa’ verse 29, on the permission and suggestion of sale and purchasing
275. those who devour usury will not stand except As stand one whom the evil one by His touch hath driven to madness. that is because They say: “Trade is like usury,” but Allah hath Permitted trade and forbidden usury. those who after receiving direction from their Lord, desist, shall be pardoned for the past; their case is for Allah (to judge); but those who repeat (the offence) are companions of the Fire: They will abide therein (for ever).
29. O ye who believe! eat not up your property among yourselves In vanities: but let there be amongst you traffic and trade by mutual good-will: nor kill (or destroy) yourselves: for Verily Allah hath been to you Most Merciful!
2. The prophetic tradition that indicate some permission of khiyar (conditions)
أنت باخيارفي كل سلعة ابتعتها ثلاث ليال
‘you have your option on your every purchased good at three nights”
(Baihaqi and Ibnu Majah)
3. The disallowance of banding (ikrah) on the contract al-baqarah verse 256
256. let there be no compulsion In religion: truth stands out Clear from error: Whoever rejects evil and believes In Allah hath grasped the Most trustworthy hand-hold, that never breaks. and Allah heareth and knoweth all things.
Due to some providences before I conclude that repurchased agreement consists of some forcing (ikrah) element of one party on other party, sale and purchasing activity is not consist any usury as long as it conducted in cash, some condition might be charged on any transaction with concern on some ethical element of Islamic economy. Therefore, to legalize the case mentioned before Mr. A should skip his banded repurchasing agreement beside sale and purchasing agreement among him and Mr. B.
Dr. Al-Amien Ahmad , Jual Beli Kredit ; Bagaimana Hukumnya? (terjemahan), Gema Insani Press, Jakarta, 2001.
Irfan Syauqi Beik & Radiyta Sukmana, Malaysia dan Bai al-Inah, Republika, 18 Januari 2006.
Prof.Dr.Abdullah al-Mushlih, Fikih Ekonomi Keuangan Islam (terjemahan), Darul Haq, Jakarta, 2004.