Capital Ethiopia Newspaper

City suspends land deals

Business community rebuffs new lease policy, some face bankruptcy 
The business community blasted the new Urban Lands Lease Holding Proclamation at the second Ethio-Chamber consultation forum saying that the public should have been consulted first. Discussing the proclamation, where representatives from the Construction and Urban Development Ministry were absent, Abdu Ali Hijira a law consultant briefed the participants about the much talked about land lease law published in the Federal Negarit Gazeta of the FDRE on November 28, 2011.
During his briefing Abdu said that the new lease policy would minimize the chance to own property and will leave many, who cannot afford to pay the required lease for the land they built their home on, to be displaced. He added that no person can get land without a lease.
Part two article 5 of the proclamation states “…. No person may acquire urban land other than through the lease holding system …”. Article 6 on conversion of old possessions to lease holding sub article 1 states “the modality of converting old possession into lease hold shall be determined by the Council of Ministers on the basis of a detailed study to be submitted by the Ministry; provided however, that the process of such a study may not preclude a revision of the existing rental rate applicable to old possessions.”
Abdu explained that the article means, starting now everyone will pay rent for the land their property is constructed on.  The lease price will also be calculated based upon the market price.  
One person, on conditions of anonymity, told Capital that the sub cities suspended transferring title deeds as of Friday December 16, after the city administration notified them by a letter to suspend activities that dealt with title deeds. She said that after completing the legal process and payment she went to Kirkos Sub-City to transfer the title deed, but was told to wait until further notification to process it. She added that if the lease policy is applied on her property she will go bankrupt as she cannot afford to pay for the rent of the plot where the house she bought lays. “I saved all my life to buy a house. When I finally managed to buy it with all the money I saved, this lease policy came. I think I will lose everything because I don’t have anything to pay for the rent of the plot, and I fear that I will not be able to get my money back from those who sold me the house. I am frustrated,” she said tearfully. 
Sources said that the sub cities are waiting for a directive to implement the new lease policy from the city government. According to the lease policy someone who leased a plot will have to pay a 20 percent down payment when they receive the land.
Another buyer, who was looking for a house, told Capital that he will have to renegotiate the price and will try to deduct the price of the lease.
Getachew a representative of the Meat Exporters Associations, an investor who participated in the forum, asked how the government is going to treat investors who bought factories and industries from the Privatization and Public Enterprises Supervising Authority (PPESA) on conditions that the property is sold to them without any limitation or mention of the plot. He said that the investors buy the factories after studying the profitability and sustainability, “however, the new lease policy is threatening the sustainability of the factories.”
“We plan to transfer the property to our children, but we will not be able to do this with this new policy. How is it going to be treated as there will be another regulation that forces the investor to pay rent for the land their property is on? Will someone be interested in investing now?” he questioned.
Zafu Eyesuswork Zafu who chaired the discussion said that government representatives were not there despite repeated attempts from the chamber to invite them. “We invited officials from the Construction and Urban Development Ministry to attend the forum. An official also confirmed that they will attend, but nobody showed up,” Zafu said.  The forum in the morning session also discussed about the country’s five year Growth and Transformation Plan following a presentation by Neway Gebreab, Special Economic Advisor to the Prime Minister and Director of the Ethiopian Development and Research Institute, who was applauded for his clear and brief talk.