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FatwaFederal TerritoriesTransactions & Finance

AL-KAFI #957 : TIPUAN BIDA: PAKATAN AGEN-AGEN SEMASA LELONGAN HARTANAH

What is the ruling on collusion among all agents at a property auction so that only one agent bids and the price stays low?

Short answer

Auction sales are originally permissible according to the majority of scholars, including the Shafi'i school.

Federal TerritoriesOpinion (irsyad)

A reference, not a fatwa. First sentence of the summary below — read the original fatwa and consult your state authority before acting.

Authority
Federal Territories Mufti Office
Date
Status
Opinion (irsyad)
Series
Al-Kafi li al-Fatawi
Topic
Transactions & Finance

No evidence of gazettement in the source — this is not a gazetted fatwa.

Summary

Auction sales are originally permissible according to the majority of scholars, including the Shafi'i school. However, collusion among all agents to refrain from bidding, whether with or without payment, is prohibited by Shariah under the principle of sadd al-zari'ah because it undermines free competition and the seller's rights. The fatwa notes a difference of opinion where the collusion does not involve all participants: the Maliki scholars and Ibn Taymiyyah permit it, but it is not allowed when all attendees agree to stop bidding. In Malaysia, bid rigging is also an offence under the Competition Act 2010 and the law should be obeyed.

Written in our own words from the original fatwa — check the source before acting on it.

Kesimpulannya, berdasarkan penjelasan di atas, kami cenderung kepada pendapat bahawa aktiviti "kawtim" oleh semua agen yang disebut oleh orang yang bertanya, adalah diharamkan oleh Syarak

Excerpt from the original fatwa · Federal Territories

Read the full fatwa on the Federal Territories website (new tab)

How to cite

Cite the original fatwa and its authority. Rujuk Fatwa is only where you found it.

Federal Territories Mufti Office. “AL-KAFI #957 : TIPUAN BIDA: PAKATAN AGEN-AGEN SEMASA LELONGAN HARTANAH”, 13 December 2018. https://muftiwp.gov.my/ms/artikel/al-kafi-li-al-fatawi/2872-al-kafi-957-tipuan-bida-pakatan-agen-agen-semasa-lelongan-hartanah. Found via Rujuk Fatwa: https://rujukfatwa.com/en/fatwa/ruling-agent-collusion-property-auction/

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Evidence cited

Hadith

  • Tirmizi 1139