What is the correct way to deal with stolen money that was used to build a house and from which charity was given, and is repentance by giving a portion of the earnings to Allah each month sufficient?
Feeling remorse for accepting and benefiting from stolen money is the first step towards repentance, because taking from a thief or usurper—with knowledge of their act—is akin to them. Jurists have stated that whoever buys or benefits from unlawful money, knowing its nature, is like the usurper. Repentance is obligatory and beloved to Allah the Almighty, and it is among the causes of success. For repentance to be valid, the stolen money must be returned to its owners. If reaching them is impossible, then it should be given as charity on their behalf. If returning the money requires selling the house, then it must be sold unless doing so causes extreme hardship; in that case, what is easy to pay from it should be given, with the firm intention to repay the rest.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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