Entering Property Before Final Payment
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Question
What is the law when the buyer moves into the apartment before the final payment?
Answer
This is prohibited due to interest (ribit). Since the sale only takes effect with the final payment, the money in the contractor's hands is considered a loan from the buyer to the seller. It turns out that because of the loan the buyer gave to the seller, the seller gave the buyer permission to use the apartment. This is prohibited due to interest. Since in every regular contract the sale takes effect at the time of transfer of possession, which usually occurs with the final payment, it turns out that all the money the seller received until the final payment is a loan with the seller, as the seller has not provided compensation for the money. Therefore, the seller of the apartment is considered a borrower who is prohibited from doing a favor for the buyer, who is considered his lender.
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