Division of Properties bought Jointly

Everyday Islamic Finance Personal and Family Finance
#1

As-salamu alaykum,

I am hoping to get some clarity in the scenario below:

My brother and I bought a property jointly in 2006 as a family home. We bought a 2nd home jointly in 2016, to which my brother moved.

In both cases we paid the same amount towards the deposit and both properties are under both our names. But the value of the properties and total deposit amount for each property was different.

Now we want to split the home ownership so each of us is a sole owner of one house, myself the house bought in 2006 and my brother in the house we bight in 2016

In order to do this, do we

  1. Take the market value of the properties as of today. Net the gains/loss (equity) from the two properties since they were bought and make a payment to make the Equity gain equal

or

  1. Do we take the amount of deposit required for each house at the time they were bought and net that off and make a payment.

So the general question is, what is Sharia compliant: To split according the cost of purchase of each property or current market value…or is there another way? Any guidelines would be appropriated. Jzk.

#2

Wasalam

May Allah bless you.

The way I see it, is that you both have a 50/50 interest in both properties (will call them A and B).
You and your brother can either:

  1. both of you are happy to just take one property each. For example if you are happy with property A, and your brother wants property B, and neither of you are interested in making money out of either properties, then you can just settle the matter by taking ownership of one property each.

  2. to avoid any disputes in the future, work out the current value of both properties. Who ever will reside in the most expensive one, will pay the difference to the other brother. For example, property A is worth £100k and property B is worth £110k, the one who will take property B will pay £5 to the other brother.

And Allah knows best!