After eight years of fierce court battle, May Real Estate finally transferred the title deeds of 20 disputed housing units to homebuyers who entered into contractual agreement with the developer.
The developer was compelled by a court order to deliver title deeds for the homes last month. The company withheld the title documents for a year and a half after it had handed keys of the properties to the home buyers.
The two parties entered into a purchase agreement between 2006 and 2009, while the properties were being developed. May Real Estate sold the units that sit on a 5,000Sqm plot in Kirkos district, in Kazanchis adjacent to the United Nations Economic Commission for Africa.
The development is a 10-story building housing 114 apartment units that sold for between 800,000 Br to 2.3 million Br, with home purchasers making deposits on the promise of specific delivery dates of the units after completion.
Not only did the developer fail to deliver the units within the agreed upon time frame, but it made requests that the homebuyers make additional payments after claiming unforeseen price escalations in construction materials due to shortages of foreign currency and arguing its construction costs had increased by 15 million Br as a result.
Protesting the company's claims, the buyers, most of them from the American diaspora, took the case to the High Court where they sued the company in February 2011. The plaintiffs claimed that the real estate firm breached the contract by failing to deliver their homes within the contractually stipulated time frame and also by demanding additional payments for violating the contract.
They requested that the court force the firm to fulfill its contractual obligations and deliver the homes to them and asked additional compensation for damages they incurred as a result of the delay.
May’s lawyers argued that the company could not fulfill the contract due to force majeure, including unforeseen circumstances like cement supply shortage and a lack of labour force. The Court rejected May's argument and held the company liable for non-performance of the contract but rejected the plaintiffs' request to order May to deliver the houses, stating it would violate the contractor’s rights.
The court ordered May Real State, founded by Yoseph Mebrahatu, brother of Daniel Mebrahatu of Dan Technocraft and Biniyam Mebrahatu of Gabby Investment, to reimburse the advance payment.
Dissatisfied with the ruling of the High Court, the buyers took the case to the Supreme Court, demanding that the contract be upheld. The Supreme Court ruled in favour of the homebuyers and ordered the real estate firm to deliver the units as is.
May in turn appealed the new ruling to the Cassation Bench of the Supreme Court and petitioned for the reversal of the lower court ruling. The judges of the Cassation Bench sustained the lower court by ordering May to transfer the homes to the buyers by October 2015.
The real estate firm then took the case to the Constitutional Inquiry, a constitution interpreting body, in 2016 and called again to have the ruling of the Cassation Bench reversed. May claimed in its petition that the Cassation Bench passed an "unconstitutional" ruling in ordering the developer to transfer the homes and violated the economic rights and right to property of the firm.
The Constitutional Inquiry, however, upheld the ruling of the Supreme Court, which based its reasoning in the spirit of the law, rather than the letter of the law.
Judgment debtors then went the next step to execute the final judgment. In their judgement execution application, they appealed that May should have delivered the houses equipped with kitchen cabinets, washing machines, refrigerators, cylinder stoves and installed doors as specified by the contract.
The execution court rejected their appeal of receiving a furnished apartment. The Court has also denied their appeal for the transfer of title deeds, stating that the Supreme Court's decision was unclear about the issue.
The home buyers took the case back to the Supreme Court, which again rejected their claim, leading them to take the case to the Cassation Bench, which ruled in their favour and ordered May to hand over the title deeds to the home buyers.
However, in 2016 before the homes were delivered, May instituted a new claim by asking for 25 million Br in compensation for the additional costs the company incurred in land leasing, bank loan interest and design changes.
After reviewing the case, the High Court ruled that the home buyers should pay 10 million Br after deducting the cost of the unfinished work. Both of the parties appealed to the Supreme Court displeased with the lower court's ruling.
While the buyers have received the title deeds of their houses, the case related to compensation payments is still pending at the Supreme Court and is adjourned to March 8, 2019, for oral litigation.
PUBLISHED ON Feb 09,2019 [ VOL 19 , NO 980]
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