Abstract:
This paper explores the application of Islamic concept of Hibah Mudarabah in managing waqf commercial properties in the state of Kedah, Malaysia as a wealth redistribution mechanism instead of the present welfare mechanism role. In the past, the traditional practice of waqf properties is that pieces of lands were handed over to mosques in owners' neighbourhood for waqf uses and the State Islamic religious affairs council was the trustee. There should be a change in the management of waqf institutions in Malaysia which include the management of this untapped potential in waqf properties so that the owner and public can benefit from this new wealth redistribution role. Hibah Mudarabah is a form of partnership where one of the contracting parties, the rabb-al-mal (the financier), provides a specified amount of capital and acts like a sleeping partner, while the other party called the mudarib, provides the entrepreneurship and management for carrying on any venture, with the objectives of earning profits. The principles are applicable for profit and loss sharing, which are widely used in Islamic finance. A waqf is a charitable endowment which is used in Islam used for philanthrophic purposes without consuming the property itself. Waqf not only acts as a welfare mechanism but also plays an important role in the economic development and advancement of Muslims society just like during the golden era of the Muslim civilization. It is hoped that this exploratory study on unlocking the value of waqf property development in Kedah, Malaysia will offer regional experiences of waqf properties as a productive resource. New information will help create a new paradigm shift as well as provide input to unexplored issues on waqf properties in Malaysia. It is hoped that this research will be a springboard for more in depth studies in Islamic real estate in the future
