Stake is a digital platform for real estate investing. It operates on fractional ownership, where investors pool their funds together to own shares in a property collectively. The business structure of Stake can be summarized in the following steps:

• Property is listed on Stake.
• Funds are raised to purchase the property.
• A SPV (A Special Purpose Vehicle) is created in the DIFC to incorporate and ensure that all investors in the property are legally registered to the property through their ownership of shares in the SPV. The SPV is listed as the owner on the title deed.
• Property documents are distributed to the investors.
• Rental payment is collected and distributed amongst the investors.
• At the end of the investment term, the property is sold, and the sale proceeds are distributed to investors according to their share in the SPV.

The SPV appoints Stake as its manager for overseeing the investment. Stake is in charge of operating the platform, identifying and managing investments on behalf of investors until the end of their investment term, managing tenants, leasing, and maintaining the property. Usually, the investors do not have any authority over Stake’s operations. However, if, through a vote, majority of the investors wish to exit the investment, the property will be sold, and the proceeds will be distributed in accordance with everyone’s shares.

Stake charges the following fees from the investors:

• 1.5% at the time of property acquisition and 0.5% as a yearly administration fee.
• 2.5% exit fee at the end of the investment term. If they manage to sell the property at a profit, they take 7% of the appreciation as a performance fee.
• They additionally charge KYC and AML fees of 0.2% at the time of property acquisition and 0.1% annually starting from the second year of the investment term.

Their fees can be categorized into two types:

1. Fees that are required by the government such as KYC and AML fees, i.e., legal fees.
2. Fees charged by Stake. These can be considered as payments for their services.

Stake rewards its customers through referral and cashback incentives.

• Referral program: existing Stake investors have the opportunity to participate in the referral program by sharing their referral link with friends. Once their friend signs up for an account, they will receive a bonus from Stake to assist with their first investment. The original investor will receive their reward once their friend invests a minimum amount, and the property is fully funded.
• Cashback incentive: if one’s investment amount over 12 months meets a certain amount, they will receive a certain percentage of cashback from Stake.^[1]

From a Sharia perspective, Stake’s business structure is composed of the following components.

1. The investors form a partnership (shirkat al-amwāl) via their contribution to the SPV.^[2]
2. The collective partnership represented by the SPV hires Stake as its agent (wakīl) to oversee the investment in return for the predefined fees.^[3]
3. As an incentive to draw clients, Stake offers referral program (juʿāla) to existing members to find new investors.
4. New members via the referral program are gifted (hiba) an amount to assist with the first investment.
5. All investors are also gifted a cashback for investments over a specified amount and duration.^[4]

Assuming the above structure and understanding of its program, it is permissible to invest with Stake.

Disclaimer: We cannot officially certify any investment as Sharia-compliant without reviewing the necessary paperwork, and permissibility of an investment does not imply investment advice on whether a person should invest. The Darul Iftaa does not offer investment advice.

And Allah knows best.

Ml. Jubair Mahmud
Student, Darul Iftaa Chicago

Checked and Approved:

Mf. Abrar Mirza
Head Mufti, Darul Iftaa Chicago