A decision rendered in the federal Cassation bench shows that anyone renting a house from the Governmental Housing Agency cannot, either for a business or for personal use, transfer the house to a third party. 

The suit was between the applicant Governmental Housing Agency and defendant Mr. Yibrah Girma. The claim of the applicant was that the defendant, signing a contract of rent on January 1, 1990 E.C had rented a house from the agency but the defendant had transferred the house to Ato Niuse Girmay without the consent of the applicant, hence the applicant requested for the termination of the lease agreement and return of the house. 

The Federal First Instance Court, after hearing the arguments of both parties decided to terminate the contract of rent and the house be returned. But, the Federal High Court, upon appeal rejected the lower court’s decision stating that the contract of rent can only be terminated had the defendant rented it for a business purpose. 

The suit reached the Cassation bench and the bench, after framing the issue whether the interpretation of the High Court took with regards to the contract of rent analyzed the facts at hand. 

Under normal circumstances contracts should be interpreted in good faith and taking into consideration the relation of the parties in the contract. In cases where the terms in the contract are vague and confusing then the mode of interpretation should be taking into consideration the intention of the parties. 

In this case, it is fairly obvious to say that the purpose of establishment of the agency is to minimize to the maximum amount possible, the shortage of homes and to serve the society with a minimum payment, hence when the defendant, having agreed to rent the house for his own use, transfers it to a third party either for a business or for personal use without the plaintiff’s consent, it should be interpreted in a way that the use of the house was not according to the contract. 

Hence, the Cassation bench rejected the High Court’s decision and ordered the return of the house stating that the court did not follow the proper modes of interpretation. 

Thus we can understand that a contract of rent made with the Governmental Housing Agency will automatically be terminated if for any reason the house is transferred to other parties. 

If you have an additional question or comment please  Contact us.

Any pertinent information about investment in Ethiopia, tax in Ethiopia, can be available from an Ethiopian Lawyer, Ethiopian Investment Lawyer, Ethiopian Tax lawyer, Ethiopian Employment Lawyer, Ethiopian Labour Relationships Lawyer, Ethiopian Immigration lawyer, Ethiopian divorce Lawyer, Ethiopian Tax lawyer.