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Amde Akalework, managing director of Habtewold
International Commission Agent, is one of the 152
clients Habitat-New Flower Homes Plc has entered
into an agreement with to develop an entirely new
suburb around Kality area, in the eastern periphery
of Addis Abeba.
Amde has agreed to buy a house that is worth of 2.9
million Br from the real estate developer on the
plot of land around Kality St. Gabriel church.
His agreement with the real estate developer was
made on June 16, 2006, to buy Mago Court house, a
name the developers have given to the model of
houses which have three bedrooms, a terrace, a
garage with a capacity to accommodate two cars, and
a basement. The developer has agreed to complete
construction of houses within 18 months.
“I have completed 90pc of the payments,” Amde told
Fortune.
Amde and 27 other people, who claim to have mostly
completed their payments (60pc to 90pc), now are
complaining about the ambiguity surrounding the
title deeds transfer that seems to have not turned
out they way they expected.
“When we request the transfer of ownership, we have
to deal with an individual named Estegenet Abate,
who actually owns the land the houses are built on,”
Amde explains. “We do not know who this woman is and
we do not have a deal with her.”
The 28 people have requested an explanation from
Habitat about who Estegenet is. She is said to be
one of the shareholders in the company having shares
worth of 50,000 Br. She has shares in the company in
cash but not in kind, and is currently out of
Ethiopia.
“Habitat is Estegenet’s legal representative,”
Brehane Abate (Eng.), managing director of Habitat,
said; the real estate developer was established by
nine shareholders back in 1999 with an authorized
capital of 1.2 million Br.
The real estate developer has been Estegenet’s
officially authorized representative since 2005,
which entitled it to build houses on the plot she
owns and wants to develop real estate on. It has
also been entitled to represent her in relationships
with different bodies, to control and watch over the
construction and to collect the money from clients
and deposit it in the company’s and her shared
account.
The title deeds of the plot the houses are built on
belongs to Estegenet, under Title Deed No. 39963,
which is found in Kebelle 11 of the current Akaki
Kality District, the former Woreda 27.
The land is owned by Estegenet as freehold, which is
the legal ownership of a property giving the owner
unconditional rights, including the right to grant
leases and take out mortgages.
But Habitat’s 28 clients wonder why the deal
cannot, then, be finalised by the company itself;
that is part of their complaint and something they
demand explanation for from the real estate firm.
This is because, in the agreement, it is stated that
the company has secured and acquired vacant land for
residential construction purposes.
“In the agreement, the title deed number is
indicated and once you have signed an agreement you
are obliged to be ruled by it,” Manyahelishal Abate,
marketing director of Habitat, and also a
shareholder in the family business, told Fortune.
“Site shall mean the land acquired by the developer
for residential construction purposes identified
under Title Deed No. 39963 in Kebelle 11 of Woreda
27 in Zone 6 of Addis Abeba,” reads Sub-article 11
of Article One of the agreement signed by the
company and each of its clients.
At this point, however, Amde does not deny that he
and the other clients failed to cross check if the
developer had secured the land from any
authoritative body.
“We did trust the company,” he said.
Perhaps due to that, Habitat’s lawyers believe they
have the legal upper hand.
“Once you give your consent you are liable,” Tesfaye
Tadesse, legal advisor to Habitat said. “The two
parties have agreed and signed the agreement and the
agreement is binding.”
The problem would have been an issue if Estegenet
had refused to sign and transfer her ownership to
Habitat’s clients, according to Tesfaye.
But that did not happen, it is only because they do
not want Estegenet in the deal, Manyahelishal
supports the idea.
In order to bind the land owner to the agreement,
the title deed number was intentionally included and
to which all parties agreed upon.
“We only entered into agreement with Habitat and
that is all,” Amde still maintains his views shared
by his would be neighbours in the new village.
The developer and the 28 clients have been dealing
with the problems they have encountered, primarily
caused by the delay of the completion of houses.
They have also gone to arbitrations on issues
related mainly to the transfer of title deeds,
utilities, Value Added Tax (VAT) and the
infrastructure within the neighbourhood.
The 28 individuals, most of whom are from the
Diaspora community, addressed their complaints a
month ago to the Prime Minister’s Office, the
Ministry of Foreign Affairs (MoFA) Directorate for
Diaspora Affairs, Ministry of Justice, Ministry of
Works and Urban Development, Federal Ethics and Anti
Corruption Commission, the Mayor’s Office, the
Police Commission, and Akaki-Kality District.
They requested these offices to investigate the
legality of the company and the VAT and other taxes
they have paid so far.
“This is one of the many cases that come to our
office,” Mebrat Beyene, director of the Diaspora
Affairs Directorate with the MoFA told Fortune.
Some of the clients have also chosen other courses
they felt would help their case.
For instance, Amde went to the Kera Area First Civil
Bench on March 24, 2009, requesting the court to
issue a temporary injection - a judiciary order that
suspends Habitat from making any move on Amde’s
house with MC 117 identification number - and the
court did so.
“The issue of VAT is regarding the payments that
Habitat has made while the proclamation was not even
there,” Amde told Fortune. “We are not sure
if the receipts they issue are the legal VAT
receipts.”
Habitat’s legal advisor does not agree. He mentions
the agreement once again which he believes is the
major substance of the debated issue.
“All costs involving the transfer of title deeds,
including all government taxes, relevant
administrative charges, etc. shall be to the
client’s account,” reads another sub-article of the
agreement.
As a result, the developer has paid taxes on behalf
of its clients and they are obliged to pay back
through the agreement they have consented to,
according to Tesfaye.
Habitat has two construction sites; one in Kality
and the other in Kotebe area, in front of CMC
Housing Development - the latter site has 114
houses. These houses are built on a plot leased from
the city government.
At present, there are about 40 clients who have
started living in the houses on Kality site
constructed by BERTA Construction Plc, a company
established by the major shareholder and Managing
Director of Habitat, Berhane.
There are some clients who have already transferred
ownership and there are some in the process of
transferring ownership over the land and property.
Almost 10 clients from the total 152 which are
included in the Kality project have had their
agreements terminated due to being unable to make
payments on time.
The new village, which includes a tennis court,
swimming pool, an artificial lake, internal roads
and side walks, all rests on a portion of 181,134Sqm
of the total 293,582Sqm land owned by Estegenet and
approved by the former Region 14 Administration in
1999/2000, looks almost deserted.
A visit to the area on Tuesday, May 5, 2009, showed
that there was not much activity to indicate that
construction was still going on; but there are some
clients who have decided to finish the houses by
themselves. Some of the houses on the left side of
the entrance look old and the paint is already
fading. |
