Professional Documents
Culture Documents
Alemnew Abebe 1303458 Blen Andualem 1302897 Getnet Wasie 1303946 Habtamu Tizazu 1303977
Alemnew Abebe 1303458 Blen Andualem 1302897 Getnet Wasie 1303946 Habtamu Tizazu 1303977
BY: Id No
Advisor:
Gimbi, Ethiopia
Table of Contents
List of figure.....................................................................................................................................i
List of tables....................................................................................................................................ii
Acronyms and Abbreviations.........................................................................................................iii
CHAPTER ONE..............................................................................................................................1
1. INTRODUCTION.......................................................................................................................1
1.1. Back Ground of the Study.....................................................................................................1
1.2. Statement of Problem............................................................................................................2
1.3. Objective of the Study...........................................................................................................4
1.3.1. General objective............................................................................................................4
1.3.2. Specific objective...........................................................................................................4
1.4. Research Questions...............................................................................................................4
1.5. Significance of the study.......................................................................................................5
1.6. Scope of the study.................................................................................................................5
1.7. Organization of the study......................................................................................................5
CHAPTER TWO.............................................................................................................................6
2. LITRATURE REVIEW...............................................................................................................6
2.1. Definitions.............................................................................................................................6
2.2. Concepts of Expropriation....................................................................................................7
2.3. Needs for expropriation........................................................................................................8
2.4. Distinction among Market, Price, Cost and Value................................................................8
2.5. Value of Property in Expropriation.......................................................................................9
2.6. Types of values.....................................................................................................................9
2.7. Expropriation in Ethiopia....................................................................................................10
2.8. Valuation and Compensation in Ethiopia...........................................................................11
2.9. Systems and methods of Valuation in Ethiopia..................................................................11
2.9.1 Valuation method in Ethiopia........................................................................................11
2.9.2 Mandate to value...........................................................................................................12
2.10. Valuation methods in Oromia...........................................................................................12
CHAPTER THREE.......................................................................................................................13
3. DESCRIPTION OF STUDY AREA AND METHEDULOGIES.............................................13
3.1. Description of study area....................................................................................................13
3.2. Climate of study area..........................................................................................................14
3.3. Population...........................................................................................................................14
3.4. Research Design..................................................................................................................14
3.5. Research Approach.............................................................................................................14
3.6. Data Sources and Collection instruments...........................................................................15
3.6.1. Data Sources.................................................................................................................15
3.6.2. Data collection instruments..........................................................................................15
3.7. Sampling Technique and Target Population.......................................................................15
3.8. Data analysis and presentation............................................................................................16
CHAPTER FOUR.........................................................................................................................17
4. RESEARCH SCHEDULE AND BUDGET..............................................................................17
4.1. Time Plan............................................................................................................................17
4.2. Budget Breakdown..............................................................................................................18
References......................................................................................................................................19
List of figure
i
List of tables
Table1. Time plan of the study……………………………………………………….……17
ii
Acronyms and Abbreviations
AI Aapraisal Institute
iii
CHAPTER ONE
1. INTRODUCTION
1.1. Back Ground of the Study
The right to property is often classified as, a human right for natural persons regarding to their
personal possession. A general entitlement to private property is found more rarely, and is
heavily constrained in far as legal person (corporations) and where it is used for production
rather than consumption own property. The right to property is not absolute and states have a
wide degree of discretion to limit the right to property in the public interest (Rebecca N, 2002).
Compulsory acquisition is the power of government to acquire private right in property without
willing or consent of its owner occupant in order to benefit society. This power is often
necessary for social and economic development and protection of natural environment (FAO,
2008).
The united nation general assembly resolution on permanent sovereignty over natural resource
stated that expropriation should be based on grounds reason of public purpose or national
interest, which is recognized as overriding purely individual or appropriates (Blachew, 2013).
The right expropriate property is not absolutes; international places limitations on governments
discretionary powers in this regard. In such case, the owner shall be paid compensation in
accordance with the rules in force in the states taking such, measures in the exercise of
sovereignty and in accordance with international law.
In Ethiopia is the government had eminent power to expropriate private property for public
purpose. The 1960 civil code article 1460 states expropriation proceeding are proceedings where
by the competent authorities compile owner to surrender the ownership of an immovable
property required by such authorities for public purpose (Blachew, 2013). Driven by the demand
for economic development and improvement of the wellbeing of the society, the current
1
government of Ethiopia maintains and exercises its power to expropriate land for public purpose.
More specifically in last ten –fifteen years urban centers of Ethiopia have growing from time to
time and the numbers of urban dwellers has been increasing and their by land redevelopment for
the construction of dwelling houses ,infrastructure, investment and other services. So
expropriation of land become necessary (Proc No 455/2005).
As most region of Ethiopia, Oromia National state currently has facing growth of urbanization
and expansion of different infrastructure now days, the region opened its doors for foreign and
domestic investment (Girma, 2011). Among town in Oromo Region where land is required for
public purpose Gimbi town is one of them where land is taken for different purpose for example
for residential purpose. However, the aim of this proposal will be to assess the valuation practice
to conduct compensation during the expropriation of private property for the sake of public
purpose in the study area.
2
expropriation in West Wollega Oromia Region Gimbi town specifically in kebele 01. It will also
focus on addressing the practical problems encountered by affected peoples during expropriation
and determination of compensation. Therefore, this study will examine the current practice of
valuation & compensation for Expropriation in Gimbi town in kebele 01.
3
1.3. Objective of the Study
What types of valuation method do public institution used to determine the amount of
compensation?
What is the practical problem faced by parties responsible to undertake property
valuation to determine amount of compensation by the expropriated owners after
compensation in the study area?
What are the purposes of property valuation during expropriation and compensation for
the societies?
4
1.5. Significance of the study
This study might be bases for further researchers as a reference and for readers enables to
examine property valuation for expropriation applied in Gimbi town and it also might be
important input to existing expropriation law, when it is needed to, be amended.
5
CHAPTER TWO
2. LITRATURE REVIEW
2.1. Definitions
Expropriation‘’ The term expropriation can be broadly defined as the power to take private
property for public use by the states and forced sale and distinguish from confiscation in that the
owner will be compensated for the property taken (W/Gabriel, 2009).
In Ethiopia, it is, believed that the concept of expropriation was introduced at least in law, during
in reign of Minelik second. The first regulation that made land as a private commodity was
enacted in 1907 for the city of Addis Ababa. The provision becomes applicable to other part of
the country soon after. Since the enactment of the 1907 regulation, few land lord, regional chief
become private owners of the large track of land. In the interest of public, however, the
government was allowed to have the right of expropriation (disposition) of private owners.
Despite the right to own and dispose of property was given legal recognition in several article of
the civil code of Ethiopia. The government had eminent power to expropriate private property
for public purpose. The 1960 civil code article 1460 states, expropriation proceeding are
proceedings where by the competent authorities compile owner to surrender the ownership of an
immovable property required by such authorities for public purpose (Blachew, 2013). Driven by
the demand for economic development and improvement of the wellbeing of the society, the
current government of Ethiopia maintains and exercises its power to expropriate land for public
purpose. More specifically in last ten –fifteen years urban centers of Ethiopia have growing from
time to time and the numbers of urban dwellers has been increasing and their by land
redevelopment for the construction of dwelling houses ,infrastructure, investment and other
services.
Expropriation can also defined it is the right of the nation or states or those to whom the power
has been lawfully delighted, to condemn private property for public use and to appropriate the
ownership and possession of such property without owners consent on paying the owner a due
compensation to be ascertained according to law (Kriebaum, 2012).
Valuation: can be, defined as the art or science of estimating the value of specific purpose of a
particular interest in property at a particular moment in time, taking in to account all the features
6
of the property and considering all the underlying economic factors of the market including the
range of alternative investment (Zelalem, 2013).
The reason in favor of expropriation is the one related with the need of development. It is said
that unless we force to surrender his land, the land owner/possessor would otherwise, due to his
monopolistic position, be able to block development by refusing voluntary transfer of his land or
calming on realistically compensation (Kriebaum, 2012). Since expropriation pertains to the
relationship between the state and the private owner /possessor of immovable property, the rules
of public law will govern such relationships. Accordingly, the FDRE constitution to the right to
property, the government may expropriate private property for public purpose subject to payment
of advance compensation commensurate to the value of property (CFDRE, 1995). Thus, the
FDRE constitution primarily relies on the rule of constitutional protection of the right of
ownership of individuals. However, due to compulsive necessities the state chooses
expropriation to be an exception to his generally accepted norm in the international alien a.
However, in all instance, the constitution of FDRE provides that the requirement of public need
and full compensation must be, met. In addition, the constitution provides that compensation
should be, paid in advance (Smith, 2001).
Thought expropriation is a measure of taking private property by the state against the will of the
owner, it is different from nationalization in that the later in an ideologically motivated measure
of taking of any movable or immovable with or without compensation. Expropriation is also
different from requisition. Because, the latter is applicable to the compulsory taking of movable
property of private owners by the state, while expropriation relates only to immovable (Reinisch,
2008).
7
2.3. Needs for expropriation
Different laws and legislations of different countries refer expropriation being, used for public
purpose (interest) use. In practice, these terms are often not clearly distinguished and they tend to
be interchangeably (FAO, 2008 ).
The rational for expropriation may be straightforward when the government for use acquires land
by a public entity, for example, for a public school, hospital, for a new public road or airport. It is
done with the aim of achieving development goals through the constitution of different
development inputs that push upward the wellbeing of the society in the future (Dolzer, R., &
Bloch, F , 2003).
Expropriation also made in order to increase the efficiency of land itself. A land possessor may
hold it as it is without making any improvement because of the fact that such possessor may not
be capable enough to improvements on it or due to reason other than this. In such cases, allowing
the government to interfere against the free will and peaceful enjoyment of his possessor right
may be justifiable and legitimate, since the society in general will not benefit on the base land.
Price refers to the amount particular purchasers agree to pay and a particular seller agree to
accept under the circumstance surrounding their transaction. Once finalized, a price refers to a
sales or transaction price and applies to exchange. Price is an accomplished fact.
Cost Appraisers: used to the term cost in relation to production, not in exchange. Cost may be
either an accomplished fact or current estimates. In real estate market cost, represent the total
expenditure on the actual construction and overall development of real estate.
Value: the relationship among price, market and cost includes the concept of values. Value can
have several meanings in real estate appraisal and the applicable definition depend on usage and
context (Mistry, 2014).
8
2.5. Value of Property in Expropriation
While value defined as, the dollar worth of a thing, a word has many different meanings. Each
interested party has in mind a different concept of value, each of which is quite limited in its
definition. This deference exists because value can be very subjective (Ely, 2005). As defined in
the appraisal of real estate market value is:
The most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other
precisely revealed terms for which the specified property rights should sell after reasonable
exposure in a competitive market under all conditions. This includes requisite to fair sell, with
the buyer and seller each acting prudently, knowledgably, and for self-interest, and assuming that
neither under undue duress (AI, 2001). Market value in Ethiopia context is the amount which the
property would have realized it sold on the date if notice in the open market by willing seller to a
willing buyer (Kassie, 2006). Note that there are many different definition of market value,
usually with only minor differences, often, it will be important to have the exact wording
appropriate to the intended use of the appraisal, along with the source of definition (Ely, 2005).
According to the IVSC, Market value is estimated amount for which a property should exchange
on the date of valuation between a willing buyer and a willing seller in arm’s length transaction
after proper marketing where in the parties had each acted knowledgeably, prudently, and
without compulsion.
According to Ely (2008), for any object to have market value, certain essential elements must be
present, which are sometimes prerequisites. These elements are
Demand: the desire to possess plus the ability to buy; effective purchasing power.
9
buyer and seller each acting prudently and knowledgeably and for self-interest assuming that
neither is under undue dress (Seid, H.2008).
Use value represents the value of specific property for a specific use. In determining the use
value of a property, an appraiser gives attention on the value that the property generates. It does
not consider the highest and best use of property monetary amount that might be, realized from
its sell.
Investment value represents the value of a specific property to a particular inverter based on that
person’s investment requirement. Investment value is the value to an individual, not necessarily
in the market place.
Going concern value is an established and operating business with an indefinite future life. The
physical real estate asset of certain property such as hotel, motel, restaurants and manufacturing
enterprise are an integral part of an ongoing business. Going concern value includes the
incremental value of the property associated the business concern.
Assessed value refers to the value of a property determined for taxation purpose. Assessed value
may not concern to market value but it is usually, calculated in relation to market value.
Assessed value can be a percentage of market value or ratio of cost to value (Heinonen, K.,
Jaakkola, E., & Neganova, I, 2018).
10
Proc No 80/97): the Ethiopian Tele communication proclamation (Proc 49/96): the federal urban
land lease holding proclamation (proc. No 272/2002). The Federal Rural land Administration and
use proclamation (Proc No 456/2005 etc. (W/Gabriel, 2009).
In rural areas besides to houses, if any, and plants grass, trees, crops, fruit etc. therefore, farmers
should be compensated for the land they use. In principle, a replacement land would be given to
the market. In that case the compensation is based on annual harvest shall be paid until the
replacement lands is given. On the other hand, if they lose is permanent, means if replacement
land is not be found, then the amount is to be in the form of replacement compensation
11
2.9.2 Mandate to value
In Ethiopia, neither there is an independent and developed valuation system, nor are there
available professionals in the field. The reasons may be related to the fact that land is not
privatized property in Ethiopia, which has resulted in the non- development of the public real
property market in the country. Although the federal expropriation proclamation assumes that the
existence of certified appraisal professionals and national adopted uniform formula for valuation
(art 9 (1) of proc. 455 / 2005), this seems a dream to many today. In any case, the ministry of
federal affairs has been, given the task of developing the capacity of valuation systems in the
country, in collaboration with appropriate federal and regional government organ. In the
meantime, however, valuation has to be, carried out by committees comprised of different
experts of different backgrounds who have relevant different qualification (Daniel, 2015).
12
CHAPTER THREE
13
3.2. Climate of Study Area
The Gimbi town is lies in semi- temperate 1500- 2300 mean sea level with annual mean
temperature of 15 to 20° C. The climate in Gimbi is warm and temperate. Gimbi is a city with a
significant rainfall. Even in the driest month, there is a lot of rain. The average annual
temperature is 14.7°C and mean daily temperature also varies between 18 0C and 240C. The driest
month is December, with 13 mm of rain. Most of the precipitation here falls in August;
averaging 269 mm, March is the warmest month of the year. The area receives an annual rainfall
of 600 to 1400mm (Legese, 2020). The temperature in March averages 16.1°C. August is the
coldest month, with temperatures averaging 13.6°C (Tolesa, 2017).
3.3. Population
At present, the town occupied over 4943 hectares of land coverage and its expansion to its urban
boundary is aggravated by its population growth. According to Gimbi town administration
(2014), the town had the total population of 41,328 and this resulted due to natural and rural-
urban migration. However the population of the study are (kebele 01) is populated with total of
______peoples among them _____of them are males and _____of them are females.
14
3.6. Data Sources and Collection instruments
15
3.8. Data analysis and presentation
The study will adopt qualitative data collection method to understand the general practice of
property valuation practice in the study area. Data that will be, collected qualitatively will
organized and presented in the form of statements that explain the overall practice of property
valuation for expropriation in the study area.
16
CHAPTER FOUR
1 Topic selection
2 Advisor contact
3 Literature Review
5 Data Collection
7 Data Analysis
17
4.2. Budget Breakdown
Budget required for this study are breakdown in table below
Total 6600
18
References
AI. (2001). the appraisal of real estate, Appraisal Institute, Chicago, Illinois, 12th ed. ISBN 0-
922154-67-8. Chicago.
Asres, H. B. (2019). Real property valuation in expropriation in Ethiopia: Bases, approaches and
procedures. African Journal of Land Policy and Geospatial Sciences, 2, 40-51.
Aynalem Tiruneh,, Tolesa Safara. (2017). CAUSES & REASONS OF LAND SLIDING IN
LAGA GABA HIGHLAND AREA GIMBI TOWN, WEST WOLLEGA ZONE,
ETHIOPIA.
Blachew, Y. Z. ( 2013). Real Estate valuation, Bahir Dar University, Bahir Dar Ethiopia.
CFDRE. ( 1995). proclamation No. 1/1995. Negarit Gazeta. year1, No.1.
Dolzer, R., & Bloch, F . (2003, January). Indirect expropriation: conceptual realignments? In
International Law FORUM du droit international Brill Nijhoff. 5, 155-165.
Ely, B. a. (2005). Basic real estate appraisal 6th edition, Thomson South West USA ISBN; 0-
324-20146-X. Thomson.
FAO. (2008 ). Land tenure studies Compulsory Acquisition of land and compensation. Rome.
Girma.Kassa. (2011). Issues of expropriation the law and the practice in Oromia, Addis Ababa
University, Addis Ababa, Ethiopia. Addis Ababa.
Heinonen, K., Jaakkola, E., & Neganova, I. (2018). Drivers, types and value outcomes of
customer-to-customer interaction: An integrative review and research agenda. Journal of
Service Theory and Practice, 28, 710-732.
Hussein, S. (2008). introduction to land, Bahir Dar University, Bahir Dar, Ethiopia.
Kriebaum, U. (2012). Expropriation. U. Kriebaum" Expropriation", in M. Bungenberg, J.
Griebel, S. Hobe, A. Reinisch (eds), (Baden Baden: Nomos, 2013, Forthcoming). .
International Investment Law.
Legese, L. (January, 2020). Hydraulic Performance of Gimbi Town Water Distribution Network.
Mistry, H. G. (2014). Critical appraisal of published systematic reviews assessing the cost-
effectiveness of telemedicine studies. Telemedicine and e-Health, 20, 609-618.
Negl, A. (2008). Rural Land Valuation And Compensation Practice In Oromia Regional State
With Particular Emphasis To Investment: Law And Practice (Doctoral dissertation, ST.
MARY’S UNIVERSITY).
19
Proc No 455/2005 . (2005). Expropriation of land holdings for public purpose and payment of
compensation, Negarit Gazeta. Year 11, No.43.
Reinisch, A. (2008). Expropriation.
Smith, K. ( 2001). the law of compensation for expropriated companies and valuation methods
used to achieve that compensation.
W/Gabriel, D. (2009). land valuation for expropriation in Ethiopia, valuation method and
Adequacy of compensation, Ethiopia .
Wayene. (2006). Just compensation for Eminent domain takings and Property Tax Appraisals, is
a synergistic improvement in fairness equity possible, North Central University.
Zelalem, Y. (2013). Real Estate valuation, Bahir Dar University, Bahir Dar Ethiopia.
20