Home Buyers Leverage Favorable Ruling

May real estate will deliver title deeds to 24 home buyers

Justices at the Federal Supreme Court closed the fierce battle that raged between May Real Estate Development Plc and its 24 home buyers, ordering the may real estate to deliver title deeds to the home buyers.

The five justices of the Cassation Bench, Dagne Melaku, Teklit G. Mesqel, Teferi Gebru (PhD), Ken’a Kitita, and Abiye Kassahun, ruled in favour of the home buyers, five weeks ago, overruling the lower courts’ decision that relieved the real estate firm from handing over title deeds to the home buyers.

The court battle was instigated in 2011 when the home buyers took the case to the Federal High Court claiming that the real estate developer had terminated the contractual agreement on homes they bought in 2007 and 2010. Contract termination was evoked when May Real Estate requested  home buyers to increase the payment to recover price variation due to devaluation, the introduction of Value Added Tax and a sharp shortage of supplies.

May Real Estate, founded by Yoseph Mebrahatu, brother of Daniel Mebrahatu of Dan Techocraft and Biniyam Mebrahatu of Gabby Investment, sold 114 housing units built on three G+10 blocks around Menelik II Avenue in Kazanchis that becomes the hub of both local and international hotels. The prices for a unit range from 800,000 Br to 2.3 million Br.

The real-estate firm and the 24 home buyers, most of them from the diaspora community, were embroiled in a dispute when they refused to pay the requested prices increases. This led to the contract termination by the developer.

The home buyers took the case to the High Court asking for the reinstatment  of the contract and to deliver of the homes to them. The High, Supreme and Cassation courts uniformly decided in favour of the home buyers ordering May to deliver the units in a condition that they were entitled to. The court had also reserved May’s right to reclaim outstanding payment.

While the home buyers moved ahead to execution, May asked for the intervention of the Council of Constitutional Inquiry. May stated the courts’ ruling as ‘unconstitutional’ on the freedom of contract of parties. The real state firm stated that the courts considered the contract as a complete contract while it was a future contract of sale.

The Council closed the case favouring the home buyers, who later reinstated the execution at Federal High Court. In their claim, the home buyers required the court to order May handover the houses with kitchen cabinet, washing and drying machine, refrigerator, cylinder stove and installed doors. They also requested the court order May to prepare the parking lot and transfer title deeds of the homes to them.

On January 23, 2017, the High Court rejected their request ordering May handover the houses as they are and without giving any order about the transfer of title deeds. They, then, appealed to the Supreme Court, which sustained the lower court’s ruling.

The home buyers then took the case to the Cassation Bench on April 27, 2017, asserting the lower courts made an error of law in not ordering May deliver the title deeds of the houses to the judgement creditors. They also petitioned the court to order the real estate firm to handover the housing units with the aforementioned kitchen and home appliances.

The Bench has only framed the initial claim of the home buyers, title deed transfer. After reviewing the case, the Justices overruled the lower courts decision that denied the home buyers title deeds. The justices then remanded the case back to the lower court to proceed with the execution.

“We are waiting until the court return from recess to submit the case for execution,” said Kumlachew Dagne, lawyer of the judgment creditor.

Solomon G. Michael, May’s lawyer, believes that the Cassation bench overlooked their claim.

“We explained well that the home buyers made insufficient payments,” Solomon said, “plus the bench reviewed the entire judgment of the lower court, rather than explicitly reviewing the ruling.

(MAHDER HADDIS, FORTUNE STAFF WRITER, has contributed to this story)


Published on Sep 08,2018 [ Vol 19 ,No 958]



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