The decision overrules a prior ruling to compensate the homebuyers, rather than hand over the homes
The dispute among May Real Estate Development Plc and homebuyers is set to continue, even though the Federal Supreme Court ruled, on November 13, 2013, that the real estate company must hand over the houses to the homebuyers.
The 24 homebuyers appealed to the Supreme Court after the Federal High Court ruled, in January 2013, that May must pay them 15 million Br in compensation, rather than transfer the houses, located in Kazanchis, Kirkos District, so that they can complete the work themselves.
The Federal Supreme Court, however, overturned that ruling two weeks ago, and ordered the real estate developer to transfer the houses. The contract signed between the developer and buyers is a contractor’s agreement and not necessarily a house selling contract, as the developer had claimed, the court found.
“The ruling of the Supreme Court not only safeguards us, but makes all real estate companies in the city act responsibly,” said Kumilachew Dagne, the lawyer of the homebuyers.
The developer, however, does not see it the same way. May will file an appeal within the next three months, Solomon G. Michael, lawyer for the company, told Fortune, since the houses are still under construction.
“It seems me that it is not clear, not only for me, but also for others as well, including the plaintiffs,” said Yosef Mebrahtu (Eng), who is the major shareholder and general manager of May.
Since its establishment in 2003, with a paid up capital of 1.5 million Br, by brothers Yosef and Binyam Mebrahtu, May signed contracts with approximately 110 buyers to deliver the houses within five years. The houses, however, are yet to be completed and the money paid by homebuyers has not been refunded.
It was in 2011 that the 24 homebuyers, of which the majority reside abroad, sued May, not only for failing to deliver their homes within the stipulated time, but also for raising the prices of the housing units in violation of the contract.
The delay and rising costs were due to a combination of the difficulty of working on the rocky land and a shortage of foreign currency, as well as a price increase in the construction materials, defended the developer.
This past January, however, the Federal High Court ordered the developer to compensate the homebuyers for the price hike. The Supreme Court, on the other hand, denied them the compensation, but secured their homes.
The buyers are to now receive the houses, which are almost completed and located in a prime area, right behind the United Nations compound and flanked by several high end hotels, including Radisson Blu and the new Elilly International Hotel. There are five different 10-storey buildings, and prices for a unit range from 800,000 Br to 2.3 million Br. In addition to the housing units, the premises are to feature parking, a rooftop swimming pool, a clubhouse and a gymnasium, according to the contract agreement.
While the homeowners are eager to take over their homes and finally see them finished, Yosef, who claims that the decision is ‘unlawful’, is reluctant to accept the decision of the court.
“La luta continua [the struggle continues],” Yosef told Fortune.
AddisFortune
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