Homebuyers Sue Key Housing, Bunna Insurance Over Alleged Breach, Losses

Homebuyers Sue Key Housing, Bunna Insurance Over Alleged Breach, Losses

Apr 5 , 2026. By NAHOM AYELE ( FORTUNE STAFF WRITER )

A second group of 32 homebuyers has filed a case against Key Housing Finance Solutions and Bunna Insurance in the Qirqos Division of the Federal First Instance Court. The new filing brings the total number of plaintiffs across two separate lawsuits to 268, with combined claims exceeding 37 million Br. The shift to the First Instance Court occurred, for the disputed amount in this specific filing, eight million Birr, falls below the 10-million-Birr High Court threshold.

A second wave of discontent has reached the courts, as another group of hopeful homebuyers moves against Key Housing Finance Solutions and Bunna Insurance, alleging that a promise of homeownership has instead resulted in a breach of contract, financial loss, and fear for the fate of their savings.

Thirty-two plaintiffs filed suit in the Qirqos Division of the Federal First Instance Court's Civil Bench, claiming losses exceeding eight million Birr. Their case follows an earlier lawsuit lodged by 236 homebuyers, who also accuse the companies of failing to honour their commitments and inflicting losses of more than 29 million Br in total payments. That earlier case is being heard at the Federal High Court, while the latest case is before the First Instance Court, for the disputed amount is below 10 million Br.

Key Housing Finance Solutions, a share company in which Girum Assefa holds a 20pc stake, and is known for his involvement with Abbay TV, had promoted a plan to build 100,000 homes over 10 years for low and middle-income residents. Through a savings model dubbed the KEY Common Housing Fund, members signed 30-year contracts and made monthly contributions, expecting homes within a decade.

The promise was tied to housing and to the belief that their money was protected. Each member paid extra for a performance guarantee bond issued by Bunna Insurance, convinced that their savings would be covered if the project failed. The plaintiffs now claim that protection vanished when Bunna Insurance withdrew its coverage, a move they argue represents a material breach of contract and a turning point in the dispute.

Key Housing later obtained another insurance policy from the state-owned Ethiopian Insurance Corporation (EIC). But the plaintiffs argue that the new policy, limited to mortgage and accident risks, does not replace the initial performance guarantee intended to secure their investment.

In the same lawsuit, filed through Mulugeta Belay Law Office, the plaintiffs accuse Key Housing of operating an “illegal pyramid-style scheme,” alleging that money collected from new members was used to meet returns to earlier buyers. They also claim the company exceeded its licensed mandate by engaging in real estate activities, including land leasing and construction.

While Key Housing’s promotional materials promised fully completed housing units, including interior fittings, the plaintiffs say the houses delivered through a lottery system are incomplete and built only to block level. To them, that is evidence of weak financial and operational capacity. At the current pace, they estimate, it could take more than 30 years for all members to obtain homes.

As confidence frayed, the plaintiffs say, Key Housing began terminating contracts unilaterally. They appealed to judges to nullify their agreements and order a full refund of their contributions. They submitted copies of their contracts, guarantee documents issued by Bunna Insurance, and correspondence from the National Bank of Ethiopia (NBE), hoping to prove the invalidity of the guarantee.

The lawsuit seeks the return of more than eight million Birr, along with legal fees and compensation for financial and opportunity losses. The plaintiffs also want Key Housing and Bunna Insurance held jointly liable.

The dispute widened after Girum resigned as deputy general manager in late February. In his resignation letter, he cited "unresolved concerns" over transparency, financial control and the protection of members’ interests. He also said he had opposed using members’ contributions as collateral and had raised concerns with the Board and management about structural shortcomings. Despite resigning, Girum said he would continue pursuing accountability as a shareholder.

After his resignation, Key Housing announced that it had conducted a lottery and handed over houses to beneficiaries. But the plaintiffs argue that these steps do not answer their claims or protect their investments. Arguing that the company could move or conceal assets before a ruling, they filed an urgent petition seeking asset protection, including a freeze on Key Housing’s bank accounts and a suspension on any sale, transfer, or disposal of company-owned property.

The earlier case involving 236 homebuyers remains under litigation at the Lideta Division of the Federal High Court.

PUBLISHED ON Apr 05,2026 [ VOL 27 , NO 1353]