Fortune News | Jul 23,2022
The relationship between a real estate developer and hundreds of homebuyers has not been warm and sunny of late. Embroiled in a series of issues from title deed issuance to manners in which shared properties are managed and the absence of commercial units as initially promised, managers of Tsehay Real Estate Plc are at odds with leaders of the Homeowners Association.
Delays in issuing title deeds to homeowners at Tsehay Real Estate have caused a dispute driving Association leaders to press charges at the Federal High Court.
Buyers and the real estate company signed contracts stating that lease ownership of the housing would be provided within "a reasonable" period of time. Even though most contracts were signed seven years ago and homeowners have moved in, transfers of ownership have yet to occur. The Homeowners Association, founded in 2017 with 105 members, has its legal standing challenged by the real estate company, however.
Tsehay, a China-based real estate developer, has yet to transfer lease holding rights to homeowners who bought apartment units at a Yeka District site near CMC. The real estate company claims to have invested three billion Birr in developing an upscale neighborhood that lies on a 30,000Sqm plot with more than 630 units in 13 apartment blocs; 55 units remain unsold.
The company took loans from banks, including Bunna International Bank, which advanced 240 million Br between 2018 and 2019. The Bank was close to pursuing foreclosure in February of this year after the real estate company defaulted on its loans, putting homebuyers' property security at risk. Bunna's move to auction the property caused anxiety to the 306 current members of the Association, according to Tewodros Yilma, the chairperson.
Tsehay Real Estate requested loan rescheduling in February 2021. Managers at Bunna are considering the request, looking into whether the real estate firm fulfills requirements set by the central bank. Bunna Bank has also agreed to hold the 55 unsold units as collateral instead of the entire property, where 575 people have bought units.
Managers at Bunna have declined to comment on the matter, despite repeated inquiries from Fortune.
However, Bunna is not the only bank in the saga.
Close to 29 homeowners have taken loans from Bank of Abyssinia against their respective units held as collateral.
The real estate company was supposed to start the process of seeing title deeds issued through the District office but has yet to do so.
A homeowner who bought a flat from Tsehay seven years ago never expected issues with title deeds would arise, as she believed the company was "large and renowned." Her family's concern began to grow about three years ago due to conversations with other homeowners. The family, originally planning to move in a few months, is now weary as the issue has yet to be resolved and Tsehay continues giving them unfulfilled promises.
Recently, they were told to bring documentation to Tsehay's office. Later, a person claiming to call from Yeka District informed them that they should come in on a Saturday at 1:30pm and receive their deeds, the family member told Fortune. They realised that the District, like most government offices, is not open on Saturday afternoon. The same person called back a day before the appointment to let them know it had been canceled. The family later learned that the calls were coming from Tsehay Real Estate itself, this family member claims.
Managers at Tsehay Real Estate declined to comment on these claims and the trouble brewing with homebuyers.
Right about when Bunna Bank's auction was made public, the family understood the depth of the problem and reached out to the Association.
"We contributed for legal fees," said a member of the family.
The dispute over title deeds is just one reason for the growing disquiet at Tsehay. The issue of property management has caused fury among homeowners, who claim that property managers have failed to meet the quality of services they promised, according to Association leaders.
Power outages and unhygienic water discharge in the site's water system are among the allegations laid out.
The Association filed a suit at a civil court of Yeka First Division in October 2020. Reliance Property Management & Security Services Plc, hired by Tsehay Real Estate to administer the site, has been ordered by judges to leave the premises in a ruling the court made on March 11, 2021.
Despite orders from the court, the property management company has yet to transfer shared properties. Neither has it evacuated the site nor has Tsehay Real Estate made an effort to facilitate the process, Association leaders claim.
"We're going to file an application of execution," said Hana Woldegebriel, secretary of the Homeowners Association.
PUBLISHED ON Mar 27,2021 [ VOL 21 , NO 1091]
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