A judge at a lower court has ordered a Chinese real estate firm to hand over title deeds to homebuyers after a months-long legal battle.

The Yeka District Federal First Instance Court has ruled in favour of homeowners of Tsehay Real Estate Plc, ordering the developer to respond to the demands of 300 members of a Homeowners Association.

However, the real estate company has mortgaged the property, taking out loans in hundreds of millions of Birr. Tsehay Real Estate has taken 240 million Br in loans from Bunna International Bank, using the apartment units as collateral.

This is the latest development among dozens of disputes between real estate companies and homebuyers lingering at federal and regional courts, where there is little in the way of laws governing the real estate market.

Three weeks ago, the Federal High Court ordered for the injunction of property under Impero Real Estate Plc as part of the lawsuit against the company filed by a group of 51 buyers, who claim to have paid 125 million Br in the last seven years but have yet to secure their housing units from the developer. Impero had pledged to deliver the units within 22 months.

Established in 2011, Tsehay Real Estate claims to have invested three billion Birr in developing the property near CMC roundabout, Yeka District. The apartment complex sits on a 30,000sqm plot and houses 634 units in 13 apartment blocs. The company, which started selling the units seven years ago, agreed with homeowners to process title deeds within a "reasonable" period following the settlement of payments.

Transfers of legal ownership have yet to occur, although homeowners began to move in as early as 2014.

More than half of the homeowners organised themselves into an association and challenged Tsehay of failing to honour the terms of the contract it signed with clients.

The litigation at the court of law coincided with Bunna Bank's move to foreclose on the properties due to default, but it backed off after striking a deal with the developer to collect the payment from the sales of unsold apartment units. Dozens homeowners have also taken loans, using their properties as collateral, with the facilitation of Tsehay Real Estate.

Lawyers representing Tsehay Real Estate petitioned the court that the preparation of title deeds had been underway but delayed on the side of the Addis Abeba City Administration and the Yeka District Land Management Office. They also challenged the Homeowners Association, formed in 2017 with 105 members, for having no legal standing.

Judges dismissed the latter and ordered the District Office to ascertain whether Tsehay had put any effort into transferring deeds.

Title deeds for 174 homeowners had been prepared, though they were still in the developer's name and had yet to be transferred, officials of the District told the court.