Ethiopia Passes New Urban Land Lease Proclamation

A new urban land lease holding proclamation was passed by the Ethiopian Parliament last Tuesday.

An amendment made to the previous directive puts all old land possessions under the lease system as per the revised proclamation. The new law has not established whether lease payments will be required on previous holdings or if the new arrangements will just legislate a length of time for ownership according to lease arrangements.

It is expected that the detailed principles for the conversion will be determined by the Council of Ministers as per rigorous investigation to be conducted and submitted by the Ministry of Urban Development & Construction.

The new proclamation which supersedes all previous laws in this area also established time limits for construction on leased land. Consequently a limit of 24 months for small projects and 48 months for larger constructions has been set.  Construction projects that fall in between are expected to be completed within 36 months. Extensions for construction cannot exceed 6 months for small projects and one year for medium to large constructions.

Lease holders can only anticipate receiving the original lease payment with interest, the value of any construction and 5% of lease transfer value should they wish to transfer lease rights before completing construction on the leased land.

Other principles dealing with lease holdings as well as stringent punishment for government officials and other individuals engaged in corrupt practices with regards to land holdings were also established by the revised proclamation.

Source: Addis Fortune

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