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The Ethiopian Urban Land Lease Holding Law: Tenure Security and
Property Rights

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The Ethiopian Urban Land Lease Holding Law: Tenure Security and
Property Rights

Legesse Tigabu ♣

Abstract
As urban centers in Ethiopia are expanding fast, adopting and executing a
flexible urban land use system which can respond to the ever mounting demand
for urban land and ensure tenure security would be mandatory. In the absence of
tenure security, no one is happy to bring about a costly permanent improvement
to land. Under this article, the author argues that the Ethiopian urban land
holders encountered land tenure insecurity due to poor real property registration
system, restrictive rules on land holding, and their inability to pay lease and
related debts to the government and all these have their own uncalled for
consequences on property rights. This article also unveils how urban land has
become unaffordable to the public at large.

1. Introduction
Countries around the world do have their own unique land policies and
laws. Pragmatic differences in terms of political, social, economic and
cultural setups have made adoption of different land policy and law
schemes in such dissimilar societies inevitable. Accordingly, a country
which has a society divided across economic classes with huge difference
will not opt for land policies and laws which enable individuals to own
land privately as this would allow those who have controlled the means of
production and capital to buy all the land across the country and exploit
the lower class. It is in light of such facts that the FDRE constitution
declared that both urban and rural land and other natural resources are
♣
LL.B, LL.M, Senior Lecturer, College of Law and Governance, Jimma University. The
author can be reached at [email protected]/[email protected].
101
 Jimma University Journal of Law Vol. 6 (2014)
owned by the state and peoples of Ethiopia and thus cannot be owned
privately. 1

While farmers may get rural land for free as proclaimed under the
constitution, 2 urban residents have to go through tender and allotment
procedures of the urban land lease system to secure urban land use rights
on a plot of land. The Ethiopian urban land lease system has tried to
ensure the right balance between the interest of the public at large as
owner of land on one hand and individual interests related to urban land
on the other. Among the most important urban land related interests of the
individual citizen is tenure security. As urbanization is growing fast 3 in
Ethiopia, introducing and implementing a land administration system
which ensures tenure security is mandatory. In the absence of tenure
security, no one is content to bring about any form of permanent
improvement to land. This has serious ramifications as it discourages real
estate development and ultimately results in shortage of housing and other
immovable properties needed for different uses.

This piece of writing will explain how individuals may face urban land
tenure insecurity due to poor real estate registration system, expiry of
lease periods, their incapacity to pay lease debts to the government and

1
Art.40 (3) of the FDRE constitution declared that “The right to ownership of rural and
urban land, as well as of all natural resources, is exclusively vested in the State and the
peoples of Ethiopia. Land is a common property of the Nations, Nationalities and
Peoples of Ethiopia and shall not be subject to sale or to other means of exchange.”
2
See Art 40(4) of the FDRE Constitution.
3
Sisay Habtamu Tekle 2012, Urban Land Policy vis-à-vis Tenure Security and the
Environment: A Case Study of Addis Ababa, Ethiopia. Also see Shlomo Angel, David
de Groot, Richard Martin, Yohannes Fisseha, Tsigereda Taffese and Patrick Lamson-
Hall 2013, Urban Expansion (Ethiopia): Interim Report August 18 2013. Though
Ethiopia is the least urbanized country in the region and below 20% of its population
lives in urban centers, the urbanization process is one of the fast growing due to high rate
jobless youth emigration from rural to urban areas. Thus, advancing the urban land
administration system of the country is so indispensable to respond to growing demand
for urban land.

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 The Ethiopian Urban Land Lease Holding Law…Legesse Tigabu
failure to start and complete construction within the specified period. It
will also explore on the implications of the relevant provisions under the
Ethiopian urban land lease laws on property rights of individuals. So, both
the urban land lease system which creates and terminates urban land use
rights and the urban land registration system which aims at ensuring
tenure security are the subjects to be dealt with hereunder. For easy
understanding, this work is designed to have six sections. Section one will
explore the expiry of lease period and its impact on tenure security and
property rights of individual rights. Section two will focus on
commencement and completion of construction and tenure security.
Registration and urban land related property rights of individuals will be
addressed under section three. Section four reflects on constitutionality of
proclamation No. 818/2014. Section five explores land lease related debts
and property rights and section six concludes the work.

2. Expiry of lease period, tenure security and property rights of

individuals
There is no problem with setting time limits while transferring land to
individuals through a lease arrangement as lease, by its nature, is
temporary and for a defined period of time. Urban land transferred,
particularly, to investors (persons who are considered domestic or foreign
investors as per the investment proclamation No. 769/2012, Reg. No.
270/2012 and other relevant laws) should be for a defined time and even
should not be for unjustifiably long time, say 99 years, as this would deny
a given generation’s right to use such tract of land. The reason is obvious.
Investors need large tracts of land and such investors at times may be
foreigners. Thus, giving urban land for undefined period of time or
unduly long time may tailor the principle of public ownership of
urban/rural land. This may change the nature of urban land market to land
grabbing by investors who can afford it and that may put land use rights
of Ethiopian citizens at stake. Given the fact that urban land related

103
 Jimma University Journal of Law Vol. 6 (2014)
4
corruption is common in Ethiopia and the government is striving to
curtail it, sympathetic approach in this regard may not be opted for.

On the other hand, transferring urban land only through a lease

arrangement and thus setting lease periods for all types of urban land
holdings might be undesirable. Art 18 of the lease proclamation has set
the ceiling lease periods 5 as this proclamation declared lease to be the
only means of acquisition of urban land. Such ceiling ranges from 5 years
for short-term land uses for economic and social activities to 99 years.
There is no problem with limiting land use rights through lease periods.
The problem with the proclamation is that it doesn’t provide any
exception to the principle of acquisition of land through a lease system.
To be precise, lease shouldn’t have been the only urban land acquisition
modality and the constitution doesn’t dictate so. The nature of the real
state to be built, the function it has to give and some other factors should
be considered before putting time limits for all types of holding rights.
Above all, individuals have a constitutional right to private property and
thus may own improvements over land permanently unless the
government exercises its inherent right to take land back for public
purposes (expropriation) by virtue of art 40 (8) of the FDRE constitution
or their land use right was temporary from the beginning because they
acquired it through a lease arrangement. Yet, it doesn’t mean that the
constitution has declared lease arrangement as the only means of
acquisition of urban land use right. The legislator, as stated under the
preamble of the lease proclamation, intends to ensure the prevalence of
good governance by introducing lease as the only means of urban land

4
Samira Lindner 2014, Ethiopia: Overview of corruption in land administration,
Anticorruption resource center, June 2014
5
See the sub articles under art 18 of the lease proclamation. Under the urban land lease
law of Ethiopia, there is no any exception to the principle that land use right in urban
areas expires after some defined time. Though the constitution has kept silent over this
particular issue and thus the government may regulate it, such very inflexible stand could
have uncalled for ramifications on property rights of real estate owners.
104
 The Ethiopian Urban Land Lease Holding Law…Legesse Tigabu
acquisition. 6 Yet, the government could have included other modalities
and made the procedures transparent to ensure equitable access to land.

As long as the government can avail itself of expropriation proceedings

when it needs land for public purposes, setting time limits for all cases
(using lease as the only means of acquisition of urban land) and removing
any type of real estate after expiry of and refusal to renew a lease period
would have detrimental effects on the country’s economy and is even
inconsistent with the constitutional right of real estate ownership which in
principle has to be limited by the government through expropriation
proceedings. 7 Though the government may come up with different
restrictions on land use rights, it cannot deny the real estate ownership
right of individuals unless the land use right of individuals ends.
Individuals may lose their urban land use right either because of
expropriation or after expiry of lease periods. Individuals cannot avoid
expropriation; but as the constitution has not set lease as the only means
to acquire urban land, the urban land use right of individuals should not
have been limited by time in all cases and there could have been
possibilities where urban residents exercise permanent land use and real
estate ownership right subject to expropriation like the farmers in rural
areas.

Only urban land holdings whose nature requires lease periods should be
transferred through lease arrangement and subjected to such time bound.
Otherwise argument leaves urban land under the control of the
government while the constitution says land belongs to the state (not
government) and peoples of Ethiopia. 8 Government is not land owner. It
is there to regulate land use right on behalf of the state and peoples of
Ethiopia. While doing so, it has to make land accessible to all and ensure
tenure security. But, the modality of urban land acquisition adopted by the
government couldn’t achieve these constitutional objectives as

6
See section 3 of the preamble of the lease proclamation.
7
See art 40 (8) of the constitution
8
See Art 40(3) of the constitution.
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 Jimma University Journal of Law Vol. 6 (2014)
unaffordable land tender proceedings could push out the lower class. At
times, such undesired lease arrangements may also discourage real estate
development and result in lower quality buildings as the owners of
buildings have no guarantee that they/their children will continue to be
owners of the building they erect after expiry of the lease period. Though
renewal might be requested, it could be refused and the grounds of refusal
are not mentioned under the proclamation. One may, for example, transfer
his land use right along with poorly constructed house 5 or 10 years ahead
of expiry of his lease hold right. Then, who is imprudent to construct a
better building on such plot of land while he/she is not certain that the
lease period will be renewed? He/She knows that no compensation will be
paid in case the renewal request is rejected as proclaimed under art 19 of
the urban land lease proclamation. We can think of many more scenarios.

It could be said that a lease period can be renewed after its expiry and we
can ensure tenure security using the procedures set by art 19. But, under
art 19 of the lease proclamation, getting the lease hold right renewed
cannot be claimed as of right if one closely reads the last phrases. Rather,
it is the discretionary power of the authority concerned to reject or
approve a renewal request. To ensure that such discretionary power is
used properly, the proclamation should have mentioned the grounds of
refusal as such grounds have serious implications on one of the
fundamental rights of individuals-the right to property. While art 25 (1)
(a) and (b) set sufficient grounds which could terminate urban land use
right any time before expiry of the lease period, sub 1 (c) declared that the
fact that the lease period has not been renewed in accordance with art
19(1) results in termination of the lease hold right without explaining
when the lease period could not be renewed. Art 19 has made it clear that
at times renewal couldn’t be possible though the request is made. This
could have been clarified. It is obvious that the lease holder could also
lose his right because of his failure to request renewal up on expiry of the
lease period as such period cannot be renewed unless the lessee lodges an
application to this effect as proclaimed under art 19 (2).

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 The Ethiopian Urban Land Lease Holding Law…Legesse Tigabu
The lease regulations of the regions under the study have tried to close
rooms for abuse by setting some grounds to reject renewal requests. Yet,
such grounds of rejection are not clear enough and could be abused. The
directives of the respective regions have copied and pasted the grounds
stated under the regulations instead of elaborating them. Art 45(2) of
Addis Ababa City Administration urban land lease regulation, art 50(2) of
Amhara Regional State urban land lease regulation, art 48(2) of SNNP
Regional State urban land lease regulation and relevant provisions of the
urban land lease directives of the respective regions have set identical
grounds of rejection of a renewal request. 9 These grounds are:
1. When the structural plan of the urban center is changed
2. When the land is required for public interest
3. When it is impossible to change the previous development to the
development level the place demands.

The lease proclamation should have incorporated these grounds as they

determine fundamental rights of individuals. The first ground is quite
clear. If a fundamental urban land plan changes the purpose of some tract
of land from industrial zone to residential area after impact assessment,
then the one who have leased urban land for specified time may not be
able to get his holding right renewed. This may simply fall under the
broad notion of “public purpose” which allows the government to
expropriate land even before expiry of a lease period.

The last two requirements are vague. The government may say the land is
needed for public interest or it may claim that it is impossible to change
the previous development to the development level the place demands.

9
See Art 45(2) of Addis Ababa City Administration urban land lease regulation, Art
50(2) of Amhara Regional State urban land lease regulation, Art 48(2) of SNNP
Regional State urban land lease regulation and relevant provisions of the urban land
lease directives of the respective regions. As grounds for the rejection of urban land lease
renewal request will have serious impacts on the constitutionally recognized property
rights of individuals in general and tenure security in particular, they should have been
set by the legislator itself in unequivocal terms. Also see Zelalem Yirga 2914, Critical
Analysis of Ethiopian Urban Land Lease Policy Reform since Early 1990s: USA, 2014
107
 Jimma University Journal of Law Vol. 6 (2014)
The latter couldn’t be a big challenge if experts in the field set clear
guidelines and decide accordingly. The former is worth considering.
Broadly speaking, any land can be required for public interest. It is,
therefore, really difficult for the individual to establish absence of public
interest. The narrow phrase “public purpose” which is employed by the
constitution and the civil code is substituted by public interest. Public
purpose limits the power of government by allowing expropriation when
the land is needed for goods and services which are going to be open for
the public at large like schools and hospitals. In such cases, the public at
large acquires direct benefit from the use of land. If one takes a look at the
broad definition given to the phrase ‘public interest’ under art 2(7) of the
lease proclamation, he can easily understand that there exists a room for
abuse. This provision reads:
““Public interest” means the use of land defined as such by the
decision of the appropriate body in conformity with urban plan in
order to ensure the interest of the people to acquire direct or indirect
benefits from the use of the land and to consolidate sustainable socio-
economic development.”
Such disputes may not be brought before ordinary courts (art 29(1) of the
lease proclamation). When land is expropriated for public use, for
example, the ‘public use’, claimed by the government cannot be
questioned by ordinary courts and it should not be as it is an
administrative matter. 10 If so, the rules the concerned authorities base
their decisions on should be clear enough to avoid possible arbitrariness.
Only disputes over the amount of compensation may be brought before
courts. 11 In case, the land is needed for public use after expiry of the lease
period, there is no compensation to be paid 12 which would mean that there
is no issue at all to be brought before ordinary courts. Thus, there is a
room for tenure insecurity.

10
Art 29(3) of the lease proclamation
11
Ibid
12
Art 19(1) of the lease proclamation
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 The Ethiopian Urban Land Lease Holding Law…Legesse Tigabu
What is more, urban land lease contract is a distinct form of
administrative contract in which the government represents the land
owners, the state and peoples of Ethiopia. This would mean that the
government will have control over the lease contract as administrative
contracts always involve public interest and such public interest is
represented by the government. Such control and discretionary power
over the lease arrangement, if abused, will result in tenure insecurity and
leaves ownership and other urban land related rights at stake.

Regarding the renewal procedure, art 19(2) declared that the period of
lease will be renewed only if the lessee applies in writing to the
appropriate body within 10 to 2 years before the expiry of the period of
lease. The appropriate body is required to respond within a year from the
date of submission of the application and failure to do this would mean
that the lease period is renewed pursuant to art 19(3) of the proclamation.
Art 19(4) warns officials who fail to respond within a specified time by
making them liable for all adverse consequences of the renewal. Thus, it
is less probable that lease right holders will make use of this opportunity
to get their right renewed.

All these would mean that the ownership right of the lessee over his/her
improvements made over the land could be at stake. 13 Lease by its nature
is temporary and hence subject to renewal. But, the grounds of refusal, as
they are serious limitations on a fundamental right of an individual,
should be imposed and clearly mentioned by the law maker. If his/her
leasehold right is not renewed, then he/she has to remove his/her property
or the government will take the land along with the property without any
payment. This might have damaging ramifications unless the decision
makers consider the prevailing facts. Removal/non-removal of very
expensive buildings should be worth considering and needs wise
decisions to avoid undesirable destruction.

13
See Mekasha Abera 2013, Ethiopian Basic Lease Law Concepts and the problems
associated with the lease system, Far East Press, 2013 p.120-121.
109
 Jimma University Journal of Law Vol. 6 (2014)
3. Commencement and completion of construction and tenure
security
The Ethiopian urban land lease arrangement has set construction
commencement and completion time ceilings as it transfers land use
rights for a defined time. The lease proclamation has regulated these
issues under art 22 and 23. Given the fact that the demand for urban land
is increasing at an alarming rate in Ethiopia and because urban land could
be used for different purposes, our land lease system should avoid
circumstances which may make urban land idle. If there is no time ceiling
for commencement and completion of construction, the natural
consequence is that there won’t be guarantee that the land will be
improved within a reasonable time.

Art 22 of the lease proclamation declared that the time of commencement

of construction should be specified under the lease contract. Such time
might be extended based on the complexity of the construction and cannot
be extended beyond the ceilings provided by regional regulations. 14 The
time of commencement is from the date of conclusion of construction
permit as proclaimed under the regional regulations. The regional
regulations have copied and pasted the time limits set under art 34 of the
model regulation adopted by the Ministry of Urban Development and
Construction which are 6, 9 an 18 months for small, medium and large
constructions respectively with possible extension for 6, 9 an 12 months
correspondingly. Accordingly, art 34, 36 and 33 of the urban land lease
regulations of SNNPs regional state, Amhara regional state and the Addis
Ababa City Administration respectively have set identical ceilings as they
have copied art 34 of the model regulation as it is. Other regions have also
followed the suit with no or insignificant differences. The constructions
are classified as small, medium and large constructions based on their
complexity and all these categories are eligible for commencement time
extension as may be allowed by the regulations of regional states. The

14
See Art 22(2) of the lease proclamation
110
 The Ethiopian Urban Land Lease Holding Law…Legesse Tigabu
proclamation has not set the time of commencement of construction nor
the ceiling periods. It has left these matters to the regional states.

Art 23(2) on the other hand has provided time limits for completion of
construction. The time limits under art 23(2) may be extended when
circumstances so require. The applicable ceilings are those set by the
regulations of the regional states; yet these ceilings cannot go beyond the
ceilings set by the proclamation which are 28, 48 and 60 months for the
three levels of construction, respectively. 15 So, the regions can set ceilings
within the ceilings stated under the proclamation. However, the regional
regulations have again copied and pasted the time limits on completion of
construction under art 35 of the model regulation and this model
regulation is identical to the lease proclamation in this regard.

As discussed earlier, the author advocates the time stipulations for

commencement and completion of constructions. However, the severe
penalties for failure to commence or complete construction in time stated
under the lease proclamation will have undesired consequences and may
discourage real estate development. Given the down payment the lessees
should pay in advance, 16 project study and design costs and regular lease
payments before they commence or complete their construction, they will
obviously be in financial difficulties to commence or complete
construction. What is more, those who have failed to comply with the
time bounds might be at different stages of construction. If they fail to
discharge such obligations within the time ceilings, they all will
automatically lose their lease hold in addition to the penalty. 17 The author

15
See 23(4) of the lease proclamation
16
In urban land tender proceedings, the amount of the down payment (the amount to be
paid in advance) and the lease price offered by a bidder determine his/her chance of
winning. It is, therefore, natural that the bidders will present higher down payments to
win the bid. Then, they fall into financial crisis when they start construction. The urban
lease hold proclamation and most of the regional urban land lease laws have proclaimed
that the winner bidders are identified based on the lease price they offered (80%points)
and the down payment they undertook to pay (20%).
17
See art 22 and 23 of the lease proclamation
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 Jimma University Journal of Law Vol. 6 (2014)
would say penalty is indispensable to ensure timely improvement over
land; but it should not be this much sever and discouraging. The
construction progress the lessees are making and the stage they are in
should also be considered in determining penalties. Ordering the lessee to
remove a building of any type and at whatever stage following his failure
to comply with the time of completion of construction 18 could not also be
economically sound. When the lessee fails to remove, the appropriate
body may, through auction, transfer the incomplete building to other
individuals or remove it, as the case may be, and recover costs from the
lessee. 19 As the appropriate body may remove it and recover costs from
the lessee instead of selling it through auction 20, the lessee may remove an
incomplete construction as he has this right under art 23(6) and that is
simply an economic loss for the country. Though the government
authorities will have to opt for the right solution at the end in each case,
the uncertainty right after the order may result in demolition of the
incomplete construction by the lessee.

If the lessees face such tenure insecurity, then they will choose to transfer
their lease hold rights before the time of commencement or completion is
over, as the case may be, to escape penalties. Hence, a lessee who is not
capable of commencing construction ahead of the deadline or a lessee
who already has commenced construction but is not able to complete it
within the time ceiling may transfer their lease hold right without paying
any penalty as they do have this legal right under art 24(2 and 3). Such
transfer is attractive and rewarding compared to the penalty discussed
above. The lessee will get the effected lease payments back including
interests calculated based on bank deposit rate, value of the already
executed construction if he is transferring his lease hold right after
commencement and before the time of completion and lastly 5% of the

18
See sub art 6 of art 23 of the lease proclamation
19
See Art 23(7) of the lease proclamation
20
See Art 23(7(b) of the lease proclamation
112
 The Ethiopian Urban Land Lease Holding Law…Legesse Tigabu
transfer lease value. 21 This encourages individuals to transfer their lease
hold rights before commencement or completion of construction and that
is detrimental to real estate development. Individuals who have
transferred their holdings before completion of construction repeatedly
could be barred from participation in future land lease bids if they have
done so “in anticipation of speculative market benefits.” 22 This could
discourage rent seekers from manipulating the land market.

4. Lease debts, tenure security and property rights of individuals

In addition to the obligations like down payment, 23 commencement and
completion of construction which at times may result in termination of the
lease hold right unless discharged, there is also annual lease payment 24
which may lead to punishment and seizure and sale of the property of the
lessee by the concerned authority when such lease payment is not effected
timely. 25 All these would mean that the early stages of urban lease
arrangements are quite onerous and can easily drive the majority of
Ethiopians away from urban land markets. The researcher would say such
a lease arrangement serves only the rich who are capable of discharging
such onerous obligations and government as it derives a significant
amount of revenue from the transaction. The process should have enabled
the lower class construct and own real estate as one of the most important
rationales behind adoption of public ownership over land is to avoid
accumulation of land and real estate in the hands of the rich and overcome
exploitation of the lower class by the rich.

On top of the penalty fee equivalent to the rate of penalty fee imposed by
the Commercial Bank of Ethiopia on defaulting debtors, their property
may be seized and sold by the appropriate body to collect the arrears. This
gives the government free hand to seize and sale the properties of
21
See sub art 2 and 3 of art 24 of the FDRE urban land lease holding proclamation
No.721/2011.
22
See art 24(7) of the lease proclamation
23
See supra note 15.
24
See Art 20(6) of proclamation No. 721/2011.
25
Ibid
113
 Jimma University Journal of Law Vol. 6 (2014)
defaulting debtors without going to and waiting for court orders. Thus,
accumulation of arrears for three years may result in seizure and sale of
properties of the debtor by the concerned body and this leaves the lease
hold rights of the lessee uncertain as the property right the concerned
authority knows closely and may most likely sale is the real property he
has built on his lease holding.

In principle, one cannot oppose the penalties and the powers given to the
appropriate body as such penalties and powers are meant to help effective
enforcement of the proclamation. But, given the onerous obligations that I
mentioned earlier and the power granted to the government under art
20(6) of the lease proclamation, the lease hold rights of the lessees are
uncertain and that would make an urban land lease arrangement scaring
for many Ethiopians.

5. Registration and urban land related property rights of individuals

Registration of land and land related properties would be crucial in
improving land management and development. Scientific recording of
information regarding real estate is indispensable to administer urban land
and urban land related properties. In the absence of systematic recording
of physical and legal information on a plot of urban land, we won’t have
advanced urban land management and this in turn could have serious
implications on tenure security. Tenure insecurity has many undesired
consequences. The UN Centre for Human Settlement (Habitat) has
identified the following as unwanted ramifications of tenure insecurity. 26
1. Inhibits investment in housing
2. Hinders good governance
3. Undermines long term planning
4. Distorts prices of land and services
5. Reinforces poverty and social exclusion
6. Impacts most negatively on women and children.

26
Peter Dale, The importance of land administration in the development of land markets -
a global perspective, University College London, England, 2000, p.4.
114
 The Ethiopian Urban Land Lease Holding Law…Legesse Tigabu

Cadastre which records physical information about a plot of land 27 and

land register which records legal information related to a unit of land 28 are
so important in improving land market and use as such systems provide
reliable information about a plot of land. Cadastre registers boundaries,
fertility, purpose of a unit of land and size of such land. 29 Such physical
information has, basically, to be recorded, managed and studied by
engineers and geographers.

Countries may adopt cadastre and land registration separately or a

multipurpose integrated land information system which includes both
cadastre and land register and is advisable to respond to market
demands. 30 Ethiopia has chosen the latter when it approved the Urban
Landholding Registration Proclamation No. 818/2014. Though the
country incorporated land registration provisions under Title 10 of the
Civil Code of the Empire of Ethiopia Proclamation No. 165 of 1960
decades ago, these provisions are denied a legally binding force as article
3363 of the Civil Code suspended their application until an executive
order is issued by the government. 31 No government in Ethiopia so far
issued such an order.

As the application of the provisions under Title 10 of the Civil Code is

suspended, the courts have been using these provisions as customary rules
as this part of the Civil Code incorporated important principles on
registration of immovable properties and because the country didn’t
provide alternative comprehensive legislation governing the subject
matter. The Civil Code regulated the country’s land information system in
a unified approach integrating cadastral and land register rules. 32 The

27
Ibid, p.3, also see Daniel W/Gebriel and Melkamu Belachew, Land Law Teacing
Material, Justice and Legal Research Institute, 2008, p.1001-104
28
Ibid
29
Ibid
30
Supra note 25, p.5
31
See art 3363 of the civil code
32
See art 1567 and 1606 of the Civil Code.
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 Jimma University Journal of Law Vol. 6 (2014)
Civil Code didn’t also make a distinction between urban and rural real
properties. 33 Real property registration laws of the country adopted by the
existing government are scattered over legislations as the rural and urban
land laws at regional and federal levels provide their own landholding
registration rules. Thus, one has to take a look at the federal and regional
rural and urban land proclamations, regulations and directives to fully
understand the Ethiopian law governing registration of immovable
properties. The country’s urban land registration law has, therefore, not
been comprehensive and the country has experienced poor urban land
registration system due to lack of capacity and well established system to
record urban land use rights, transactions over these right and possible
restrictions. 34

In 2014, the government has adopted Urban Landholding Proclamation

No. 818/2014 to realize real property rights of individuals, provide
reliable land information to the public at large, minimize land related
disputes and modernize the country’s real property registration system. 35
Though limited in scope (as it doesn’t regulate registration of rural real
property), this proclamation is applicable throughout the country and can
bring about tenure security and certainty in real property transaction as
registration provides reliable and public information both for the land
holder and interested third parties. The Proclamation has adopted
integrated urban land information system by dictating registering organs
to record both physical (cadastral) and legal information about land; it
unified cadastre and land register. 36 The Proclamation has employed the
phrase ‘legal cadastre’ to refer to both legal and cadastral information
about a unit of land. 37 This urban landholding registration proclamation is
comprehensive as long as urban real property registration is concerned

33
See art 1575 of the Civil Code.
34
Ethiopia: Overview of corruption in land administration,
file:///C:/Users/ju/Downloads/2014-11%20(1).pdf. Accessed on Nov 7, 2014 (845PM).
35
See the preamble of proclamation No. 818/2014.
36
See Art 6 of proclamation No. 818/2014.
37
Ibid
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 The Ethiopian Urban Land Lease Holding Law…Legesse Tigabu
and has repealed all pre-existing laws and customary practices governing
urban real property registration as long as they are inconsistent with it.38

What we can infer from this is that already existing rules on real property
registration in urban areas are yet valid as long as they don’t contradict
the urban landholding registration proclamation. The courts may,
therefore, make use of urban real property registration laws preceding this
proclamation to fill possible gaps.

One point worth considering when we talk about the urban landholding
registration proclamation is that this proclamation doesn’t create, modify,
transfer or terminate real property rights of individuals. The registering
organ, according to this proclamation, simply registers/records physical
and legal information about land. In other words, registering organs
record/register cadastral information about a unit of land and rights and
restrictions which already have been created on such unit of land through
other laws or decisions. Among others, the Urban Land Lease Holding
Proclamation No. 721/2011, law of succession, judicial decisions,
administrative decisions, contract law and property law may create such
rights and restrictions over immovable properties in urban areas.

6. Proclamation No. 818/2014 and constitutional land related powers

assigned to the federal government and regional states
Though the urban land registration proclamation No. 818/2014 has set
basic rules which can ensure tenure security and full realization of the
land use rights enshrined under the urban land lease legislations, there is a
contention over its constitutionality. The contention is as to whether the
federal legislator can enact such land administration related laws having
nationwide application. 39 This section reflects on such contention.

38
See Art 56 of proclamation No. 818/2014.
39
http://www.ethiopianreporter.com/index.php/news/item/4384. Accessed on Oct 13,
2014 (6:38PM)
117
 Jimma University Journal of Law Vol. 6 (2014)
In Ethiopia, land is a subject-matter over which both levels of government
can exercise power. The federal government is empowered to enact laws
on utilization of land and natural resources 40 while the power to
administer the same in accordance with federal laws is assigned to the
regions. 41 Power of administration involves enactment of subsidiary
legislation. Some federal land laws recognized this and allow regional
states to enact laws on utilization of land. The federal government cannot
address all details and it is a regional state which can adopt feasible
subsidiary land legislation to implement federal laws considering the
prevailing facts in the region.

When we come to the power of land administration, however, it is an

exclusive power of the regions 42 and we cannot come across legal nor
practical reasons to assert otherwise. While the laws on utilization of land
enacted by the federal government have to define land use rights, manners
of use of land and restrictions on land use rights, land administration laws
set rules on enforcement and realization of the laws on land utilization.
Nonetheless, the Ethiopian urban landholding registration proclamation
which has been enacted by the federal government dictates the regional
states to administer urban landholding in a certain way as the regions are
expected to adhere to the rules on registration under Proclamation No.
818/2014. The proclamation is applicable in all urban centers in
Ethiopia. 43 The question here is whether the federal government can go
beyond regulating land use rights in the regions and involve itself in the
administration of the same by ordering regions to administer land in a
particular way. The federal government has enacted substantive land laws
including urban land leasehold proclamation No. 721/2011 to regulate
creation, transfer, modification, restriction and termination of rights over
immovable properties. Is it not then up to the states to administer such
rights once they are regulated through substantive laws? If the federal

40
Art 51(5), FDRE Constitution.
41
Art 52(2) (d), FDRE Constitution.
42
Art 52(1) and 52(2) (d), FDRE Constitution.
43
Art 3, urban landholding registration proclamation No. 818/2014.
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 The Ethiopian Urban Land Lease Holding Law…Legesse Tigabu
government can order the regions to administer land in a particular way,
where is the significance of the constitutional power of the regions to
administer land? One may raise these and related questions over the urban
landholding proclamation No. 818/2014.

The HPRs (the Ethiopian legislator) was not sure if the draft urban
landholding proclamation was consistent with the constitution while
deliberating on it. It has, therefore, sent it to the HOF (Ethiopian second
chamber which has a final say on constitutional disputes). 44 Some MPs
have objected such decision claiming that the HOF is not given any
legislative role under the constitution and, therefore, we should not
request a comment from the second chamber as a precondition to pass
draft laws. 45 The HOF decided that the draft legislation is consistent with
the constitution and the country is in need of such legislation to build one
economic community. 46 It should be noted that the HPRs has the power to
enact laws on civil matters (though they are left to the regions under the
constitution) whenever the HOF deems indispensable to bring about one
economic community. 47 Art 55(6) of the FDRE constitution declared the
following.
It (the federal legislator) shall enact civil laws which the House of
the Federation deems necessary to establish and sustain one
economic community.
Thus, one could uphold constitutionality of the Ethiopian urban
landholding registration proclamation No. 818/2014 considering this
particular provision under the constitution. Among the major objectives of
the proclamation, one is building one economic community and this goes
in line with art 55(6) of the constitution. The second and most important
objective of the proclamation is ensuring tenure security for urban land

44
Supra note 39.
45
Ibid
46
http://www.ethiopianreporter.com/index.php/news/item/4640. Accessed on Oct 13,
2014 (7:29PM)
47
Art 55(6), FDRE Constitution.
119
 Jimma University Journal of Law Vol. 6 (2014)
48
holders. Given the fact that the country didn’t have uniform and well
functioning real property registration law previously, the adoption of the
urban landholding registration proclamation should be appreciated and
even the same trend could be suggested when it comes to the rural real
property registration system.

7. Conclusion and recommendations

This work has uncovered that urban land tenure insecurity, due to poor
real estate registration system, inflexible rules on lease periods, the land
users’ incapacity to pay lease debts to the government and failure to start
and complete construction within the specified period, would discourage
real estate development in Ethiopia. The recently adopted urban land
registration proclamation no. 818/2014, if implemented very well, can
improve the urban land registration system and ensure tenure security.

Yet, making lease the only means of acquisition of urban land and hence
setting time bounds for all types of improvement on urban land cannot
hold water and could at times result in tenure insecurity. As individuals
know that they may lose their building or have to remove it after expiry of
the lease period whenever the government rejects their request for
renewal, they don’t want to spend a lot on the land leased to them.
Though no lease period related to permanent improvement over urban
land has naturally expired so far or is going to expire soon and we
couldn’t witness refusal of a renewal request and its consequences at this
point of time, one can figure out how such procedures are discouraging
when the relevant provisions get executed. This work revealed that there
is no problem with limiting land use rights through lease periods. The
setback with the Ethiopian urban landholding system is that it doesn’t
provide any exception to the lease system. Lease shouldn’t have been the
only urban land acquisition modality and the constitution doesn’t say so.
The government could have come up with flexible and accommodative
legislation using the constitutional silence.

48
See Art 4 of proclamation No. 818/2014.
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 The Ethiopian Urban Land Lease Holding Law…Legesse Tigabu

The obligations related to rent payment, commencement of construction

and completion of construction are also onerous and all these would mean
that land users are discouraged from or incapable of bringing quality
permanent improvements over land and hence they may prefer to transfer
their land use right without any improvement on the land.

Based on the findings discussed under this work, the author recommends
the following:
• Given the country’s poor record in registration of urban real estate, the
government should strive to fully implement the recently enacted
urban land registration proclamation no. 818/2014 to modernize the
urban real state registration system. This could ensure tenure security
and minimize land related disputes in urban centers.
• Tenure security could also be further improved by revising some
objectionable lease periods set under the country’s urban land lease
holding laws by drawing exceptions to the lease system to address
compelling scenarios as the constitution has not prohibited the
government from doing so.
• What is more, the rules which have made obligations related to rent
payment, commencement of construction and completion of
construction onerous should be revised as such rules discouraged the
land users from bringing quality permanent improvements over land.
Among others things, the required amount of down payment in the
tender procedures should be reduced and we should have rules which
can accommodate the progress the lessees are making while
constructing even though they may have failed to start or complete
construction within the time limits set by the law due to imperative
reasons. We can impose fees than employing severe penalties stated
under the lease proclamation which could result in taking away the
land from the lessee. Reconsidering the Ethiopian urban land lease
system taking into account the compelling reasons discussed above
would mean making urban land accessible to the public at large and
ensuring equitable distribution of wealth.
121

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