Forward Ijarah is a form of lease which ends with transfering the ownership of the asset (subject of the contract) to the client on maturity and upon meeting all its obligations under the Forward Ijarah Contract.
Subject of the Contract, be it full share or common share of a property, which is not existig at the time of signing the Forward Ijarah Contract, may be acquired by the bank under Istisna Sale Contract or any other Sharia’a compliant mode of finance.
However, the client may be a partner in a project (the property) contributing by its land and cash as its share in the partnership, whilst bank’s share will be finance disposed for construction, hence, the Bank will be having common share of such property which will form subject of the Forward Ijarah Contract.
In any case, on completion of construction, and based on your request and promise to lease the asset, the Bank, who has accepted such offer according to the terms and conditions set out in the Forward Ijarah, will lease the asset/its share in the asset to you and will receive agreed rentals.
At the end of the lease period (i.e. on maturity) and upon meeting all your obligations under Forward Ijarah Contract, we will transfer the ownership of the property to you for a nominal sale price under a separate sale contract.
Details of the terms under which this product is offered are outlined below:
Terms of Financing:
Type of Property: Freehold.
Cash Contribution: Minimum 40% to 50% of total project cost.
Finance Tenor: 10 years including up to two years construction period.
Mode of Repayment: Monthly, Quarterly, Semi-annual or Annual terms are available
Sources of Repayment: Primary: Rental income of the project. Secondary: Other incomes.
Floating Rentals: Relevant EIBOR + bank’s margin with a minimum of certain rate.
Security: First degree registered mortgage on the plot and the building, in addition to the other terms of approval.
Insurance: Insurance policy covering the property under construction to be assigned to the Bank.
Qualified Assets: Residential, Office Buildings & Villa Complexes.
Documentary Requirements:
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Copy of valid passport.
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Full details of personal financial information supported with documents.
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Personal bank statements for the last six months.
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Completed finance application form.
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Copy of site plan.
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Copy of title deed.
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Comprehensive Feasibility Study prepared by reputed consultant.
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Project specification and approved drawings.
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Copies of the consultant / contractor agreements.
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Copy of approval of electricity connection date.
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Paying the applicable fees for technical assessment of the project by our In-House Engineers.