A bill, known as Real Estate Home Developers Proclamation, is being discussed in Ethiopia, reports Addis Fortune. The bill includes provision that obliges real estate developers to deliver homes on time, fulfilling commitment to quality, issuance of licenses for real estate developers and the transfer of finished homes.

To date, no meeting has been organised with stakeholders to discuss the bill, but a questionnaire that seeks to identifying the problems of the sector and indicate solutions has been produced. This questionnaire has been delivered to Ayat and Access Real Estate firms.

The current questionnaire represents only samples. But meeting will be called with developers and other stakeholders concerned once the bill is fully developed.

The questionnaire tries to identify problems during the home buying process and the transfer of homes, and suggest core points that should be included within a legal framework.

Problems with delivery and price irregularity are indeed a problem among real estate developers, according to their customers. In February 2010, the Addis Abeba City Administration Land Allocation Authority found a dismal performance while investigating the progress made by the 125 real estate developers.

Access Real Estate is one of those real estate firms that are having problems in keeping promised delivery dates. Despite starting with an ambitious plan to deliver homes within a year, it has yet to hand over a single unit of the 1,200 residences it had sold at 40 project sites since 2010.

The problems faced by the real estate sector are numerous, according to an article published in the Journal of African Real Estate Research in 2008. Although real estate requires a lot of investment, not a lot of it is available in the country.

Alternative financing for the sector is unavailable, which will lead to too much borrowing from weakly supervised banks. Other problems included high tax rate for real estate investment, inefficient real estate supply and pricing, an underdeveloped construction material production sector and poor infrastructure and services, all contributing to high cost and delays.

Experts believe that, despite the availability of a civil code to handle suits where a breach of contract occurs, it is good that a regulatory body is coming up with a law specifically geared for real estate developers which will hold them responsible for their promises

Most customers that have made a deal with real estate developers do not peruse legal recourse when there is breach of contract both in terms of delivery and pricing because legal recourse can be protracted. According to experts, the details of real estate agreements should be left to the contracting parties themselves but it would be useful if the proclamation can include a model real estate contract, and included articles for the revocation of licenses given to developers in cases where they fail to keep their promises.

A customer who has made a partial payment of three million Birr, for four houses, over the past three years, to Access Real Estate but received none said that it would be good if a clear punishment would be included in the bill and if the contract between the developers and the buyers was required to be registered by the Documents Registration and Authentication Authority.