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EEDERAL NEGARIT GAZETAOF 'mE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA

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CONTENTS

Proclamation No. 272/2002Re-Enactment of Urban Lands Lease HoldingProclamation Page 1732

PROCLAMA TION NO. 272/2002A PROCLAMATION TO PRO VIDE FOR THERE-ENACTMENT OF LEASE HOLDING

OF URBAN LANDS

WHEREAS, it is provided by the Constitution of theFederal Democratic Republic of Ethiopia that land is apropertyof the Stateandthe peopleof Ethiopia andthat itsuseis a subject of specificregulation by law;

WHEREAS, for the last few years lease has been inplace as a cardinal land-holdingsystemto transferurbanlandto users to the extent possibleand in accordancewithMasterPlan;

WHEREAS, it is believed that transferring urban landby lease for a fair price, consistent with the principlesof freemarket, will help achieve overall economic and socialdevelopmentand to help build capacityenablingprogressiveurban development based on the life span that a landedproperty may have and the period it requires to recoverInvestmentcosts, the specialnatureof the investment.andtheland use specified in conformitywith Master Plan; .

WHEREAS, it has been found necessary, arisingfromthesecircumstances,to developoptimumconditionsinwhichleasewill becomeexclusiveurban land-holdingsystemandtoremove obstacles of and to expediate the process of pennit-ting and holding urban land by lease based upon invesmlentplan made in conformitywith Master Plan;

WHEREAS, It has conversely been found necessarytoensure that the order in which the claims of anyone alleginginfringementof-one's legal rights and benefits is transparentand expedient;

NOW, THEREFORE, in accordance with Sub-.-\rticle(2) (a) of Article 55 of the Constitution of the FederalDemocratic Republic of Ethiopia..~tis hereby proclaimedasfollows:

~;Jt"" ;Ju.1l) ;r'PI.<Il. ifitliNegarit G.P.O.Box 80,001

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1. Short TideTbis Proclamation may be cited as the "Re-enactmentofUrbanLandsLeaseHoldingProclamationNo.27mrm."

2. 'DefinitIonsIn this Proclamation:1) "Lease" meanslease-holdsysteminwhichuseright

of urban land is transferredor held contractually;2) "Urban land" means land located within urban

boundary;3) "Town" pteaps a place in which a ml1nicipalityis

established,or whicha concernedRegiondesignatesas a town;

4) "Region" means a Region indicated under Article47 (1) of the Constitutionof the FederalDemocraticRepublicof Ethiopia,

5) "City Government" means the Addis Ababa CityAdministration or the Dire Dawa AdministrativeCouncil;

6) "Appropriate Body" meansa body of aRegionor aCity Administratiort.vestedwith the power to clear,permit by leaseand administerland;

7)' "Public Interest" means that which an appropriatebody determines as a public interest in conformitywith Master Plan or development plan in order tocontinuouslyensure thedirector indirectusabilityofland by peoples,and to progressivelyenhanceurbandevelopment;

8) "Person" means any natural person or any bodydesignatedas a person by law.

3. Scope of Application

1) This Proclamation shall be applicable to an urbanland held by the permit system, or by lease-holdsyst~m.or byother meansprior thereto,as wellas toan urban land permittedhereafter.

2) Notwithstandingtheprovisionsof Sub-Article(I) ofthis Article.this Proclamationshallbe applicableto:(a) any urbanland which has not beenunderlease-

holdsystem,asper the timeandconditionstobeset by,the concern~ Region or City Govern-ment;

(b) any town, which has not been underlease-holdsystem,as per the time and conditionsto be setby the concernedRegion or.Citygovernment.

4. Lease Hold Pennit

1) An urban landshall be permittedto be heldby lease. (a) inconformitywithplanguidelineswheresuch

- a plan exists, or, where it does not exist, inconformity with the law which Regionor Citygov~rnmentmakes,as the case maybe, and

(b) on auctionor through negotiation;or(c) accordingto the decisiondf Regionor City

government.2) Minimum pnce shall be aetermmeu 101Wu~u la.ud to

be permittedon auction,or through negotiation.3) The details of the execution of auction and

negotiation shall be specifiedby,Regulationsto be.issuedby a Regionor CityGovernment.

5. LeaSe-holdTitleDeed'

1) Lease-hold title deed shall be conferredon a personto whom an urban land.is permitted.

2) The details to be containedin the titledeed shallbespecifiedby Regulations to be issuedby RegionorCity Government.

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6. Periodof Lease. 1) , The, period Qfle~~ shall ~ary 4c,pend,i,ngon tbe level

of urban'develbpm,entand sc.PtQrpf development~Ctivityor the type of seryice'and shall have theceilingof: , , '

(a:) in any town ,

1) up to 99 years for housing (personal andleasable), science, technology; research

,and study, go~ermnent offic~, non-profit-, making philanthropist organization,

religious institution; ,

2) ~pto 15 years for urbanagricul,ture;3) as pergove~ent agrc;:e,mentfor diplomatic

missions and internaijonal organisations;" (b) iJ;lAddis Ababa and ~na.to\Vndesignated as of

the grade of Addis Ababa: '"

1) upto 90 years for ed~cation, health, cul-ture, sports; ,,'

2) upto 60 years for,industry;3) uptO50 years for commerce;

.4) upto 50,years foriOthers., (c). in other towns not designated as of the Grade of

Addis Ababa; '.

1) upto 99 years for education, health, culture,sports; '. ' "

2) upto 80 years for industry;3) upto 70yem for commerce;4) upto70 years for others.

2) Notwithstanding the provisions of Sub-Article (1) ofthis Article, ,

(a) other ceilings,may be set by Regulations to beissued by Region or City Government for otherdevelopment activities or services falling shortof specificity. ' ,

(b) a ceiling exceeding not more than half of theceiling of the lease periodisetfor each activiryorservice may be set for"development activity orservice requiring a protracte<i:periodof lease onaccount of its special nature. The"criteriaand theexecution, thereof shall be specified byRegulations to be issued by Region or CityGovernment

(c) a ceiling of 5 years of lease period shall beapplicable to economic and social developmentundertakings intended to be invested on urbanlands not designated for use within a' shortperiod of time. It may be renewed for the sameperiod of time where.it is necessary. The detailsof its execution shall be specified byRegulationsto be issued by Region or CityGovernment. '

7: Renewal of Period of Lease1) Period of lease may, upon the termjnation thereof,be

req~wed for the lease:.hoIQ..,po~s,essor as per theagreement to be reached, unless the urban land iswanted for public interest. Where the lease period isnotrenewed upon termin~tion on accQuntof the landbeing wanted fOrpublic mterest however, campen-

. sation shall not be paid 'to the lease-hold possessor.2) Period of lease shall be renewed for the lease-hold

possessor in p~uan~ with the stipulations of Sub-Article (1) of this Article if only he has applied in, writing to the appropriate body,to that effect within. 10 years and not exceeding2 years heforr thetermination of the period of leaSe.

3) The appropriate body must notify to the applicant inwritil}g its decision within 1 year. after the ap-plication I,as been Jodged with'it. it shall be deemeda$,though it.has agreed to the renewal ifitfails to do

so w~thin,~ye~ after ,,~ereceipt of the application.

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8. Rate of LeasePayment1) The mannerof determinationof the r~teof lease

paymentshall be stipulatedby R,egulationsto be, issued by Region or eity Government.

2) Region or City government may peI111iturban landfor lease payment down to nil for a.developmentactivity, social service-rendeFinginstitution, low-cost housing, private dwelling houses, and similarundertakings,it purports to eI].courage.

9. Signing Lease Contract1) Any person, to whom lease-hold of urban land is

permitted thlbugh auction or negotiation, shall beentitled to obtain lease-hold title deed as set forth inArtiCle5 only after he has signed a contract of leasewith the,body pernri~tiQgthe land or,the appropriatebody.

2) Conditions of the perfonnance of payment,period ofgrace and other relevant conditions should be em-bodied in the contract.

10. Performance of Payment and Utilizatiol1of Incomes1) A person, to whom lease-hold of urban land is

pennitted,(a) may be given a period of payment to be

determined by Region or City Government, asthe case may be,taking into account theduration needed to recovc:rcOststo be incurred;

(b) qll~stmake advance p~ymentnot less than 5 percent out of the total lease payment;

(c) shall make payment every year, and the yearlypayment shall amount to the averageprice of theremaining lease payment divided over theperiod payment;

(d) shallpay interest~ver the remainingpayment asper the rate of interest on lQanofferedby Bank.

(e) shall pay penalty fee according to the rate ofpenalty fee imposed by Barikupon debtors onaccountof defaultof loanpayment; ,

2) The Provisions of (b) and (d) of ,Sub-Article(1) ofthis Artit:;leshall not apply to urban land to bepennitted to the extent of free of charge and otherthan on auction and l1egotiation according to theprovisions of (c) of Sub-Article (1) OfArticle (4).

3) Each Region or City Government shallutilizeat least90 per cent of the lease payment it collects,as per thisProclamation,by leasing urban land"for the purposeof expanding .infra-structures.

11. Period of GraceAny' person, to whom' lease-hold of urban land ispermitted,may be granted a period'.'of grace in con-sideration of the type of development or servicewhich hehas undertaken. The details of the execution thereof shallbe specified by Regulations to.be issued by Region or.Citygovernment. '

12. Useof UrbanLand ,

. 1) Any person, to whom lease-hold of urban land is. pennitted, niUst begin to use the land for the

prescribed activity"or service within the period oftime set by Regulations to be' issued by Region orCity Government.

2) Notwithstanding the provisions of Sub-Article(1) ofthis Article, the land use maybe converted as per apennit'granted in writing by the appropriate bodyafter application to convert thetype of developmentor service in respect of which lease-holdof the urbanland has been pennitted is.received.

~) Perio<!of lease, perfonnance of .paymentand otherconditions shall be varied upon the conversionof the

'land use as set forth in Sub-Article (2)of this Article.13.Transferring Right 'of LeaSe~holdand Subjecting it to

S~ry .1) 'Without prejqqice to Article 6 and Sub-Article(1) of

Article \O!anYle~e-hold possessor may transfer, orundertake a surety on,his right of leas~-hold;and hemay also use it as acapital contribution to the amountof the lease payment he has;l1lade.

1~ liiLUo!)i "-1..t-A .,-,&..,.-"LtIJ.'I'C!ii ""W,'" i"" !iiU! <H". Federal Negarit Gazeta - No.19 14IhMay.2002-Page 1736

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2) Unless otherwise stipulated, thebuilding constructedon the urban land and facilities accessory theretoshall together be subjected to surety upon under-taking surety in respect of the right of the use of land.Conversely, the right of the use of land shall also besubjected to surety upon undertaking surety over thebuilding and facilities accessory thereto, unlessotherwise stipulated.

3) A person, who has the right of surety. may make usethereof by transferring the right, the building on theland and facilities accessory to it ilccordingto law orby using it on his own where the person undertakingthe surety has failed to perform his obligation in thecontract of suretyship, or where he is declared bycourt that he has proved to be bankrupt.

14. UrbanLand Held by LeaseNotwithstanding the contract of lease already signed, theconditions in which a lease-hold possessor may avail ofthe modalities of payment and period of grace shall bedetermined by Regulations to be issuedby Region or CityGovernment.

15. Tennination of Lease-hold and PaymcI]tofCompensation1) The lease-hold of urban land shall be terminated:

(a) where the lease-hold possessor has failed to usethe land in accordance with Sub-Article (1) ofArticle 12;

(b) where it is decided to use the land for a publicinterest; or

(c) where the period of lease is not renewed inaccordance with Sub-Article (1) of Article 7.

2) The lease payment shall be returned. subject to thereduction of costs incurred and penalty fee, wherethe lease-hold of urban land is terminated'in accor-dance with Sub-Article (1) (a)of this Article.Penaltymay not, however, be due where the landfeUshort ofuse because of force majuere set forth uncterArticle1793 of the Civil Code.

3) Where the lease-hold of urban land is terminated inaccordance with Sub-Articl~,(1) (b) of this Article,the lease-hold possessor shall be paid commensuratecompensation in conformity with the pleadingsinstitution procedure set forth in Article 17.

4) Where the lease-hold of urban land is terminated inaccordance with Sub-Article (1) (c) of this Article.the lease-hold possessor must hand over the land tothe body which gave it by removing within one yearthe property he has on the ground.

5) The body, which handed the urban land over to thelease-hold possessor, may take over the land,together with the property thereon without anypayment, where the latter has failed to remove theproperty on the ground within the period of time setforth in Sub-Article (4) of this Article. It may orderthe Police where it finds it necessary for theexecution thereof.

6) --Wherecontract ,oflease is terminated in accordancewith the provisions of this Article, the taking over ofthe land shall take place pursuant to the provisionsofArticle 20.

16. Clearing UrbanLand1) The appropriate body may clear and take over an

urban land which it decides it is necessaryto commitfor a public interest by issuing clearance order inwriting to the concerned person. It shall alsopublicize the order through other alternative means.

2) The appropriate body may clear urban land with aproperty thereon from illegal holders by serving awritten notice warning the person having illegallyheJdit to moye away and without any need of givinghim clearance order and compensationin accordancewith this Proclamation. It may take over the landillegally held by c1earning it from the holder and,where it finds it necessary by using the police forceas set forth in Sub-Article (3) of Article 20.

1~- ~7tuc!}:;;4.1.&-A~;J~'''' ;Jt&.tT).f!'1'CHi"1')11'''' Ii +') IiiUii ~.~. Federal Negarit Gazeta - No. 19 14111May, 2002- Page 1737

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3) It is only before the following bodies that anyjustifiable claim relating to a clearance order or awarning notice may be invoked: primarily onlybefore the body which bas issued. the order, onappeal before Urban Land Clearance Appeals Com-mission, and, Qnappe~l concerning compensationclaims only, before the High Court havingjurisdic-tion over the place where the property is situate orbefore the Municipal Appellate Court.> .

17. Institution of Pleadings and Decision-making1) A per&on;upon whom clearance order is issued as

. indicated under Sub-Article (2) of Article 16, or anyother person alleging infringement of his right orbenefit, or any person upon whom warning notice isserved, may take to the appropriate body his claims,in respect of compensation and any oth~r grievanceof a justiciable nature, with substantiation ofevidence and reasons. '

2) The body receiving the pleading brought before it as, ' seHorth in Sub-Article (l)ofthis Article shall notify

in writing to the applicant of:(a) its decision to pay commensurate compensation

where it proves that the property, which is asubject of compensation claim, is legally builtup and, as a result, believes it is worthy ofcompensation; or

(b) the rejection of the claims and the reasonstherefor, where i~has turneddown the pleading.

3) The body receiving pleadings must record and keepthe estimate as to the amount of compensation, thegrounds of assessment and the process followed inits decision upon the claim of compensation inrespect of the property in issue under Sub-Article (2)of this Article-

4) The period of time for instituting pleadings as setforth in this Article shall be specified by Regulationsto be issued by Region or City Government.

18. Appeals1) An applicant, who disagrees to the decision rendered

, according to Sub-Article (2) of. Article 17, mayappeal before the Commission within '30 days asfrom the date of the decision. It shall, However, bedeemed as if he has accepted the decision if he hasnot appealed within this time, ,

2) The Commission shall examine.the appeal, and(a) render decision within a short period of time

determined by Regulations to be iss.ued byRegion or City Government.

(b) shall notify its decision in writing to the parties.3) The decisions.which the commission delivers upon

disputes of points of law and fact shall be final, saveon disputes for higher, or It;sser,or undue denial ofcompensation.

4) A person dissatisfied in the decision of the Commis-sion upon compensation issues only may appealwithin 30 days as from the date of the decision,before the relevant High Court having jurisdictionover the place where the property in issueis situateorwhere such place is in Addis Ababa before theMunicipal Appellate Court. Thf' 1ppeal shall bebarred by a period of limitation oeyond this time.The decision at this appellate level sfiallbe final.

5) The period specified in Sub-Articles (1) and (4) ofthis Article for submission of an appeal shall notinclude the time taken by the court to produce andsubmit a copy to the petitioner.

6) Where the person upon whom clearance order is. issued is appealing against the decision rendered

under Sub-Article (4) of this Article, he may appealif only he has handed the hind over to the bodyissuing the clearance oider thereon and has attachedwith his appeal a document of receipt given by thebody receiving the land in question-

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FederalNegaritGazeta- No.1914thMay,2002- Page 1738--.:...-

19. The Comnussion1) Clearance Order Appeals Commission shall be

established as per the decisionof the highest organ ofpower of Region or City Government it shall havejurisdiction over appealsbiought before it as setforth in Sub-Articl~ (1) 'of Article, 18 and shallexamine and decide by approving, revoking, oramending the decisions rendered under Sub-Article(2)of this Article 17 as well as by rendering other~ecessary orders, as th.ecase may,be.

2) Each Regi/:mmay establish more than one Commis-sion where'it'finds it necessary.

3) The Commission shall be accountable to the Councilof Region or City Gov~rnment,as the case may be.

4) The Commission shall have not less than fivemembers coming from different relevant bodies.

5) The C9mnPssion may exeCute its decrees by or-. dering the Police Force wherever it finds it neces-sary.

6) The Commission may, wherever it finds it necessary,order any person to give it professional opinion orevidence from a concerned body.

7) The Commissionshall be free of any influenceexcept the law.

8) The Commission shall not be governed by theordinary Civil Procedure Code while conducting itsfunctions. It shall, however, be governed by ex-pedient procedures which shall be determined byRegulations to be issued by Region or City Govern-ment. '

9) The term of office of the Commission shall bedetermined by the Regulations establishing it.

20. Receipt of Land1) The appropriate body shall take over the land in

respect of which clearance order has been issued:(a) where the applicant has received it, to whom

compensation has been decided;(b) where the applicant has notappealed against the

compensation decided for him under Sub-Ar-ticle (2) of Article 17;

(c) Where the Commission has rendered decision;or

(d) where the person upon whom clearance orderhas been issued fails to claim compensation.

2) Where the applicant has failed to receive the com-pensation, or where the person upon whomclearanceorder has been issued has failed to claim compen-sation, the appropriate body receiving the land inaccordance with Sub-Article (1) of this Article mustpay the compensation due by the time he appears.

3) The appropriate body may order the Police whereverit finds it necessary to useforce pending its receipt ofland.

21. Duty to Co-operateAny person shall be duty bound to co-operate where he isasked to do so in any operation undertaken to enforce thisProclamation.

22. PenaltyObstruction of a measure taken by the appropriate bodyas set forth in Article 20 so as to receive land in respect ofwhich clearance decision has been made shall entailpenalty in accordance with to the relevant Penal Code.

23. Inapplicable Laws1) The Urban Lands Lease Holding Proclamation No.

80/1992 is repealed and replaced by thisproclamation.

2) Any law or practice going contrary to thisProclamation shall not be applicable to matterscovered by this Proclamation.

"~(in:if01l ~~A. ~;Jt-'":m.,..-We 1;1..,'11-')-1..., IiiUi':'" Federal NegaritGazeta- No. 19 14111May, 2002- Page 1739

;§. . ffID'{fP.,t, .t',) P1.

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24. TransitionalProvisions1) Matters which have been underconsideration before

any ordinary Court..and which are.linked to landspermitted by lease as well as matters arising out ofadministrative orders instructing lawful or unlawful,land holders to hand over the land in theiruse shall betransferred to and adjudicated by the Commissionaccording to this Proclamation as of the time theRegulations establishing each Commission shall '

have become effective.2) Transfer of matters as set forth in Sub-Article (1) of

this Article shall take effect on the basis of thenotification thereof to be made by the appropriatebody.

25. Effective Date

This Proclamation shall enter into force as,ofthe 14thdayofMay,2002. ,

Done at Addis Ababa, this 14mday of May, 2002.

GIRMA WOLDE GIORGIS

PRESIDENT OF THE FEDERAL

DEMOCRATIC REPUBLIC OF ETIDOPIA

of1~'i (10\"" u t:c~.'I-;J-"'-BERHANENA SELAM PRlNt'ING ENI'ERPRISE