No Seed of Truth in Habitat Real State Case


No Seed of Truth in Habitat Real State Case

Dear editor,

This is written in response to a story headlined, “Diaspora Homebuyers’ Hopes Dashed” (Volume 15, Number 730, April 27, 2014). We believe that the story is full of misinformation that it reminds us of a previous smear campaign conducted within and outside Ethiopian by some homebuyers a few years ago. That campaign, aimed at tarnishing the reputation of our company, failed miserably in its endeavor because we had appreciative clients and most people knew us better and refused to fall for malicious rumors.

It now seems that the same people are back at their old tricks again and the story has, wittingly or unwittingly, become an instrument to a slanderous campaign perpetrated by few individuals. In our opinion, he story should, at the very list, have checked the veracity of any information that could tarnish the hard-earned reputation of individuals and companies. After all, we are only a phone call away.

Let us now see how inaccurate the story in question was. In the story, the homebuyers say that they have applied to certain government ministries “seeking help in taking ownership of homes they paid for 11 years ago.”  If indeed that was the case, why the need to publish their complaints in a newspaper while their case is still pending? Is it to put undue pressure on the ministries or to damage our companies’ reputation or both?

In any case, all homebuyers who have paid the cost of their house and all pertinent taxes have long since taken delivery of their houses. Even the ones now complaining have done so after the tripartite agreement signed in 2010 between the homebuyers and the companies. We wonder why they chose to omit this fact.

Incidentally, our company has reported to the responsible authority about the refusal of these homebuyers to pay VAT and penalty and the authority has instructed our company to collect the tax from the homebuyers, who, as the end-users of the properties, are required to pay the tax. Copy of the written instruction has been given to homebuyers who still refuse to pay the tax.

The story also claims that our company is an affiliate of Berta Construction. This is completely untrue. The fact is that, Habitat is a legally instituted independent real estate developer (consultant) company and Berta Construction Plc am entirely different entity. And so is Etsegent & Families Real State Company.

Etsegent & Families Real State Company has authorized Habitat to manage its Akaki site project. This entails for Habitat to sign agreements with residential homebuyers by employing the service of a construction company and by supervising the contractor’s quality of work with its own architect and engineers. Other relevant facts that the homebuyers chose not to mention are that Etsegent has given a legal power of attorney to Habitat to administer real estate development project on the said land and hence Habitat and Berta have entered into a construction agreement whereby Berta would be responsible for building the houses in the development.

The statement in the story which says that “in actuality, the real state developer had no plot of land and the contractor has no legal license for construction” is yet another misinformation as Habitat has at no time claimed that it owned the land on which the kality site development was going to be built. In fact, fomenters should have known this, as the location and title deed of the land, was clearly written in the Construction Agreement they signed with Habitat.

Unless there is another motive behind this claim, we find it hard to believe that educated and experienced Diaspora returnees would invest serious money on property whose land ownership they were not sure of.

The homebuyers also claim to have “paid 90pc advance prior to construction and the remainder over time according to the payment deal.” This is yet another misrepresentation of the facts as laid down in the Construction Agreement signed between Habitat and the homebuyers. The actual terms of payment are: a first payment of 10pc as down payment upon signing of agreement, a second payment of 20pc on or prior to commencement of construction, and a third payment of 30pc on completion of sub-structural works. A fourth payment of 30pc will come at the start of finishing works, and a fifth payment of 10pc comes on commission and handing over of house.

The fact remains the same home buyers never abided to the above schedule of payment. The claim that homebuyers were not issued receipts is completely untrue and begs the question how a group of experienced businessmen and professionals can fail to demand for immediate receipts for separate and substantial payments over a long period of time.

There were several reasons why the 18 month deadline for the delivery of house could not be met. The most important of these which the homebuyers prefer not to be mentioned is the fact that the majority of homebuyers never paid scheduled payments fully and on time. Other reason also known to homebuyers included: the sky rocketing cost and even absence from the market of building materials, such as steel and cement, as well as unavoidable technical difficulties, such as the redesigning of foundation works for the second phase houses.

After the tripartite agreement mentioned above, the homebuyers have taken delivery of their houses after agreeing to settle all outstanding taxes and all monies owed to Habitat as per the Construction Agreement. The arbitrator has been appointed and will start work soon.

In the meantime, we trust that individuals and groups will refrain from supplying false information. We also hope that the media will desist from publishing any unsubstantiated information.


Berhane Abate,
Managing Director, Habitat-New Flower Homes Plc



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