Regulation
AL-ITTIHAD INVESTMENT INC is a Canadian company registered under the Canada Business Corporations Act, R.S.C. (1985), c. C-44.
Objective
The main objective of AL-ITTIHAD INVESTMENT INC is to offer to its members the opportunity to acquire properties (residentials, semi-commercials or commercials ) offering financing options free from interest (Riba) or speculative practices. It also allows investors to derive reasonable profits from their investments and to make both moral (Halal) and material profits.
Membership
Any member in good standing is eligible for the services offered by the company. To become a member, you must meet the following conditions: (1) Open an account by filling out the membership form (2) Pay the fees of $ 150 and purchase a minimum of 50 shares (value of each share: $ 100) at the time of enrollment.
Accounts types
The members of AL-ITTIHAD INVESTMENT INC have the choice between three types of accounts: personal individual account, personal joint account or business account (moral person). Regardless of the type of account, payments must come from the account holder(s)’ bank account. No payment from a third party is accepted.
Individual Accounts
The individual account belongs to only one person, the main holder. All operations regarding the account can only be carried out by the main account holder, unless a written proxy is given to another person.
Joint Accounts
AL-ITTIHAD INVESTMENT INC allows a maximum of two (2) people to open a joint account. The joint account confers the same rights and obligations on the holders especially the investment (purchase of shares) and the withdrawal (sale of shares). This type of account gives only one right to vote at the general meetings of members. On the death of one of the holders the joint account is blocked until the results of testamentary research are done and are obtained.
Business Account
If you have a company (moral person) and you want to invest or buy a property on behalf of your company , AL-ITTIHAD INVESTMENT INC allows to open an account on the company name.
Eligibility to Property Purchasing
To become eligible to purchase a property, the member must have accumulated a minimum of 1 000 shares ($ 100,000). In this case, the member interested in beginning the purchase process must submit a request to be added to the waiting list. Prioritization on the waiting list is based on seniority, i.e. the date on which the member reaches the $100 000 threshold. In order to remain on the waiting list and keep their priority rank, the member must maintain the minimum amount of 1 000 shares.
Selection Process
Depending on their seniority on the waiting list, members whose turn has arrived are contacted so that they can decide whether they are ready to start the purchase process. The member has a deadline to send his response. If the member is ready, their name is entered in the purchase list for the period in question. If the member is not ready to buy a property, their turn will be awarded to the next member in the priority list. Failure to reply within the required time means that the member in turn gives up and must write to AL-ITTIHAD INVESTMENT INC to reconsider their name in a future selection.
Eligibility to Dividends
AL-ITTIHAD INVESTMENT INC distributes the net income from its operations to its members who hold shares in the form of dividends. Dividends are calculated yearly and prorated daily on shares held by the member. This is excluding the month where deposits have been made. Certain situations, indicated in the present regulations, make the member ineligible for dividends.
Payment of Dividends
The dividend rate is variable and depends on the performance of AL-ITTIHAD INVESTMENT INC. Dividends are calculated yearly and prorated daily. They are declared once a year, in January of the following year. By default, dividends are reinvested as shares in AL-ITTIHAD INVESTMENT INC, unless the member decides to withdraw them from his investment account.
Dividends and House Purchase Process
Members in good standing wishing to acquire a property receive dividends on their investments as long as they do not have a valid authorization letter. Dividends are therefore not granted from the month during which the member’s receives the authorization letter.
Authorization Letter / Beginning of the Purchase Process
The selected member receives a letter of authorization allowing him to negotiate with the sellers and make conditional offers on behalf of AL-ITTIHAD INVESTMENT INC. This letter is valid for three (3) months.
Type and Location of the Housing Unit
The member chooses the type and the location of the property he wants AL-ITTIHAD INVESTMENT INC to buy for them. The property can be located anywhere in Canada.
Choosing the property
The authorized member makes offers for properties he/she has chosen. The offer must be conditional to AL-ITTIHAD INVESTMENT INC ‘s acceptance of both the home inspection and its specific financing within a period of at least ten (10) days. If the conditional offer is accepted by the seller, the member must get the property inspected by a professional.
Title of the Buyer Name Section
As the buyer of the property is AL-ITTIHAD INVESTMENT INC, the “Buyer Name” section of the purchase offer should read as follows: “the buyer is AL-ITTIHAD INVESTMENT INC. represented by Mr … and/or Mrs … or/Company name [Name of the authorized member] “.
Documents to Submit for Final Approval
To ask AL-ITTIHAD INVESTMENT INC for final approval for the purchase of the property, the member submits the following documents: the accepted purchase offer, the counteroffer(s) [if applicable], the inspection report, the declaration of the seller, the up-to-date certificate of location describing the current state of the property, the municipal value and the declaration of divided co-ownership [if applicable]. Following the analysis of these documents, AL-ITTIHAD INVESTMENT INC issues a letter of approval for the acquisition of the property. Subsequently, AL-ITTIHAD INVESTMENT INC appoints a notary to schedule the purchase transaction.
AL-ITTIHAD INVESTMENT INC and Member Contributions
AL-ITTIHAD INVESTMENT INC contribution to the purchase of housing units is 70% of the purchase price, up to $600 000. For properties whose price exceeds ~$857 000, it is up to the member to finance the exceeding amount.
The calculation of AL-ITTIHAD INVESTMENT INC maximum contribution is based on the member’s account balance, as of the date of their last entry on the waiting list.
When submitting the documents for the purchase approval, the member must ensure that he owner is AL-ITTIHAD INVESTMENT INC shares whose value is equal to his minimum contribution.
Properties Sold Without Legal Warranty
AL-ITTIHAD INVESTMENT INC accepts the acquisition of properties without legal warranty of quality on condition that the member signs a notarized document which fully releases the company of any responsibility. By doing so, the member waives his right to sue AL-ITTIHAD INVESTMENT INC for latent defects and agrees to take under his sole responsibility any future problem in the property.
New Construction Process
If the member is the owner of the land on which the construction project will be done, the member will have to transfer it to AL-ITTIHAD INVESTMENT INC. If the member does not own the land, the price and payment schedule of the project builder will be followed. The member solicits bids from builders or research construction projects. The member will forward the bid or project of interest to AL-ITTIHAD INVESTMENT INC. AL-ITTIHAD INVESTMENT INC performs the necessary checks on the builder (reliability, trustworthiness, project history, etc.). If the results of the checks are conclusive, the member will be authorized to sign the pre-contract (preliminary contract) on behalf of AL-ITTIHAD INVESTMENT INC. Within days of signing the pre-contract, the member submits the pre-contract for approval (legal deadline of 10 days not to be exceeded). A conditional approval is issued. Conditions include delivery of the property, receipt of the pre-acceptance inspection report and certificate of location which do not indicate any non-conformities. Upon delivery of the property, the price of the property will consider the purchase cost of the land and the cost of the construction project if the land was in the possession of the member. Otherwise, the price of the property will be the cost of the construction project if the land price is included.
Finance Method
Buying and selling is the method used by AL-ITTIHAD INVESTMENT INC.
The payments made by the member enable him to acquire AL-ITTIHAD INVESTMENT INC’s shares. As a result, and since occupancy costs are calculated on the basis of AL-ITTIHAD INVESTMENT INC’s contribution, as payments are made, the portion of payments used to pay occupancy costs for the property decreases, while the portion used to repay capital increases.
** GST/QST taxes will apply if commercial.
Occupancy Agreement
In addition to the deed-of-sale, a notarial document (Occupancy Agreement) is established to frame the relationship between the member and AL-ITTIHAD INVESTMENT INC. This document indicates, among others, the member’s share, AL-ITTIHAD INVESTMENT INC’s share, the payment schedule, the amount and distribution between capital and the occupancy fees of the monthly payments.
Conversion of the member Shares
Once the purchase is finalized, AL-ITTIHAD INVESTMENT INC converts the member’s shares into equal value.
Purchase and Property Expenses
All expenses related to the purchase of the property, including evaluation and inspection are the responsibility of the member. Notary fees and welcome taxes are shared: the member pays them when the property is purchased and the AL-ITTIHAD INVESTMENT INC pays them when the property is transferred to the member. Property taxes and expenses are the responsibility of the member. They are deducted from the capital held by the member if AL-ITTIHAD INVESTMENT INC makes an advance payment for the member.
* Monthly administrative fees are also required for members occupying a home who make their payments by cheque.
Responsibilities during the purchasing process
During the purchasing processes, in no event shall the AL-ITTIHAD INVESTMENT INC be liable, sued and/or held responsible for any direct, indirect, consequential or incidental damages or any other damages whatsoever, whether in connection with the negotiation, submission of an offer to purchase, conclusion of the deed of purchase and/or sale or any other act directly or indirectly related to the acquisition of the property. AL-ITTIHAD INVESTMENT INC’s role is limited to financing the property; it does not intervene in the purchase process. Consequently, any fault committed in the process of purchasing the building is entirely attributable to the mandatary to the exclusion of AL-ITTIHAD INVESTMENT INC, its employees, its president and its directors.
In view of the foregoing, the Purchasers and their Broker, the Sellers and their Broker and/or any other person involved in the process of acquiring the Property, waive all recourse against AL-ITTIHAD INVESTMENT INC. Any recourse against AL-ITTIHAD INVESTMENT INC will be declared abusive.
Transfer of the Property
The member can accelerate the payment of the property without being penalized. When the value of the shares held by the member equals the cost of the house at the time of purchase, the member may request the transfer of the property to their name. The occupying member acknowledges that the transfer of ownership of the property will be made without any legal guarantee of quality and at the occupying member’s risk.
Property Value Appreciation/Depreciation
The calculation of the capital gain/loss is done by comparing the municipal evaluation of the property at the time of purchase and its municipal value at the time of transfer to the member.
Selling the Property
A member must stay a minimum of two year before being able to sell the property. The board of directors may authorize the occupying member to put the property on the market for sale to a third party. The member is responsible for the sales process. The properties are always sold without the legal warranty of quality and the notary is appointed by AL-ITTIHAD INVESTMENT INC.
Appreciation/Depreciation in case of a sale
In the event of a sale, the calculation of capital gain/loss is done. The member receives 80% of the capital gain if he holds less than 50% of the capital, and 90% of the capital gain if he owns 50% or more.
Transfer by mortgage financing
The transfer by financing may be made at the request of the member after a period of two years from the date of the original acquisition of the property. The occupying member will be required to pay 20% of the difference between the municipal evaluation at the time of transfer and the evaluation at the time of purchase. The occupying member shall pay all taxes, fees and charges inherent in the transfer of the property. The transfer will be made without any legal guarantee of quality.
Moving a Mortgage to AL-ITTIHAD INVESTMENT INC
Those who are already homeowners and wish to transfer their mortgage to AL-ITTIHAD INVESTMENT INC will be listed separately. The eligibility criteria for these members are the same as for first time buyers. In addition, they must hold for at least six months a number of shares equivalent to a minimum of 10% of the balance of the mortgage. If the equity on the property exceeds 30% of its value, the member does not have to buy more shares. Otherwise, the member has to purchase more shares to reach the threshold of 30%. The members of this list are selected separately.
Shares Certificates
AL-ITTIHAD INVESTMENT INC issues certificates for shares purchased by members in good standing. Certificates are not issued for dividends.
Tax Slips and Patronage Dividend Notices
AL-ITTIHAD INVESTMENT INC issues tax slips to members who received dividends. An annually dividend notice is also provided.