Hibah for secured properties or Hibah Bersyarat Rumah Bercagar (HBRB) is one of the preferred instruments of property planning to avoid inheritance disputes in the future.
This article was translated from Fahami konsep hibah. Bolehkah rumah yang masih bercagar dihibahkan? by Damia Norwin.
Wealth distribution can be a nightmare if it is not well planned while you are still alive. Apart from cash, a house is also an asset that is often argued among the heirs of the deceased while ignoring the fate of children and spouses who have just lost a loved one.
Undoubtedly, many couples buy houses together to get better approval chances for home loan applications. Thus, on the Sale and Purchase Agreement (SPA/SNP) there will be two names, namely the name of the husband and wife, and both are required to take Mortgage Reducing Term Assurance (MRTA) or Mortgage Reducing Term Takaful (MRTT).
Unfortunately, if one of the nominees passes away, the house will be divided into two. Assuming, if the price of the house is RM1 million, the value of the house will be divided into two:
- 50% for husband – RM500,000
- 50% for wife – RM500,000
If the husband has passed away, 50% of the husband’s share does not need to be paid, this is because the MRTA or MRTT has paid it off. However, the remaining 50% must continue to be paid by the wife until the financing amount is settled. The problem that arises is when the deceased’s part, namely the husband, has already become an inheritance. If the husband’s mother or father is still around, they can claim their share (according to Faraid law) of the 50% because the deceased did not endow the house as hibah.
This is the reason why we need to understand Faraid law. However, that does not necessarily guarantee that the distribution will take place fairly and equitably according to the actual demands.
To avoid future conflicts from happening and to protect your family when you’re no longer around, you should opt for hibah for secured properties or Hibah Bersyarat Rumah Bercagar (HBRB). By endowing your house as hibah, it can steer off a lot of disputes among the heirs of the deceased.
What is conditional hibah
There are several types of hibah. In general, conditional Hibah is categorised as hibah that uses Sighah in a way of Idafah, Tawqit, and Ta‘liq. In addition to that, hibah can be done in the form of Taqyid, which is a hibah contract that depends on conditions. Conditional hibah is divided into three namely; hibah with the condition of Umra, hibah with the condition of Ruqba, and hibah with the condition of imposing reprisal.
Conditional hibah – Umra
Hibah Umra means ownership of assets is given to a person by fixing or limiting the ownership period, based on the death of the beneficiary/ recipient or the death of the settlor. It is called Umra because it relates to one’s age. Hibah Umra does not have a specific Islamic definition but adopts the same meaning from a linguistic point of view. Hibah Umra is clearer if it is described in the form of Lafaz Sighah.
Conditional hibah – Ruqba
Hibah given in Ruqba is defined as the giving of hibah from one person to another. Subsequently, the property is returned to the one who lives after one of the parties dies. Imam Abu Hanifah also gave a similar definition by stating that the concept of hibah Ruqba is associated with the death of the hibah giver by stating that Ruqba is the giving of property to others after the death of the settlor. Thus, the Shafi‘i, Hanafi School and Hanbali school of thought assume that when a hibah contract occurs with the condition of Umra, the property donated will become the property of the hibah recipient and his heirs without being bound by time.
Conditional hibah – Hibah with reprisal
Through this concept, the hibah is made by the settlor on the condition that the hibah recipient returns the favour. There are several types of conditions included in the hibah contract such as the hibah recipient must commit or fulfil responsibilities to ensure the interests of the hibah settlor or the heirs of the hibah settlor or the interests of other parties are protected as agreed in the hibah contract between the parties involved.
Among the conditional hibah products that have been commercialized by related institution, such as Amanah Raya Berhad (ARB), Wasiyyah Shoppe Berhad, CIMB, Tabung Haji, Amanah Saham Nasional Berhad (ASNB) and Prudential BSN Takaful Berhad.
Thus, it can be concluded that hibah is a contract of giving property during life for free or with reprisal that does not deny the fact of tabarru ’in the gifting of properties. Through a conditional hibah, the husband can donate (50%) of his share to the wife and vice versa. If the husband dies, the husband’s share will go entirely to the wife. The amount is 100% and vice versa. It is safer and more secure.
The principles of a hibah contract
Here are the principles of hibah that you need to know.
- A hibah settlor (assignee)
- A hibah beneficiary
- The assets bequeathed as hibah
- Offer and acceptance/ Ijab and Kabul (Sighah). Sighah is something that needs to be emphasised.
- However, some states include Qabd as a necessary aspect to ensure hibah is effective.
What is a secured property
Secured property is property purchased, assigned, or mortgaged to a financial institution or bank to secure the interests of the borrower or financial institution that allows payments to be made to the developer. Secured properties are divided into two:
Collateral charge mortgage
Applicable to landed properties that are individually owned or Strata-owned properties that already have separate ownership. For master titled or Strata-titled properties, it also refers to property registered on which a charge (Form 16A of the National Land Code).
Applicable to landed properties (not individual ownership) or properties that are still under the master title. For this category, it refers to the property registered on which the Deed of Assignment by Way of Security.
The owner of a secured property cannot transfer his or her property ownership to another person until the house loan is settled. Typically, a secured property will be released from a housing loan or deed of assignment after the borrower has repaid all bank loans.
Can a house that is still under a running housing loan be bequeathed as hibah
Yes. This was taken on the ijtihad of Professor Dr Wahbah Az-Zuhaili that is on the condition that the debt/ bank loan is settled if the settlor dies. What is meant by the statement is that there should be an MRTA or MRTT. The cost of MRTA or MRTT is around RM1,600 only for one to three house titles.
How to make a hibah declaration
The declaration must be made by a lawyer or property inheritance consultant who is qualified in managing the hibah.
- Get the services of a lawyer or property inheritance consultant from an accredited trust company. This party can also act as a trustee to the property.
- Draft a hibah declaration document.
- Verify the document in the Syariah Court or make a Private Caveat in the Land Office. This is to prevent it from being claimed by other heirs as an inheritance.
What are the advantages of hibah
Often, we hear, the heirs of the deceased have to go the court, back and forth for years to settle inheritance disputes. In addition to spending a sum of money, it also consumes the heirs’ emotions. Thus, the granting of hibah is seen to iron out the delays in settling the claims of the deceased’s properties. Moreover, the nature of the hibah which is effective immediately does not require a complicated process as it is implemented while the settlor is still alive. This may prevent conflict and tension between the heirs of the deceased. The hibah case will be concluded as valid if it meets the principles of hibah set by Jumhur Fuqaha’.
In conclusion, the best solution that can avoid prolonged conflict between heirs is through a conditional hibah or HBRB. To husbands and wives, plan your property nominees from now on. Although conditional hibah has invited various opinions of Fuqaha’, in principle, we are not bound and can accept one of their opinions because the concept of hibah is not included in matters related to faith, but is one of the practices of muamalat that does not conflict your faith.
Imposing conditions when giving hibah are increasingly practised. The imposition of any condition that is free from oppressive elements or denies any purpose of hibah may be applied, including the conditions of Umra and Ruqba. Furthermore, the conditions must not conflict with Islamic principles and be free from illegal elements. An understanding of the concept of hibah is very important to the community as a preparation for property planning knowledge so that property can be distributed fairly and equitably.
Edited by Rebecca Hani Romeli