Act No. 13/An/13/7 Establishing The Rules Governing Real Estate Promotion Activity.

Original Language Title: Loi N° 13/AN/13/7ème L fixant les règles régissant l'activité de promotion immobilière.

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Act No. 13/AN/13/7th L establishing the rules governing real estate promotion activity.


VU The Constitution of 15 September 1992;
VU Decree No.2013-0044/PRE of 31 March 2013 appointing the Prime Minister;
VU Decree No.2013-0045/PRE of 31 March 2013 appointing members of the Government;
VU Decree No.2013-0058/PRE of 14 April 2013 establishing the powers of the Ministries;
VU Circular No. 78/PAN of 13 June 2013 convening the fourth public meeting of the National Assembly;

The Council of Ministers heard at its meeting on 05 February 2013.


Article 1: The purpose of this Act is to govern the real estate promotion activity in the Republic of Djibouti by defining the conditions of exercise, the status of the real estate developer and the relationship between developers and buyers.

Article 2: For the purposes of this Act:
- The real estate promotion is to be carried out in accordance with the existing regulations of land development operations and the construction of offices, commercial spaces and individual, semi-collective or collective housing units for the purpose of sale or sale.
- The real estate developer is a registered person who carries out the real estate promotion activity described above and in fact his profession.
- The real estate program or project is an investment program/project that is designed to develop land for the purpose of the construction of office or commercial space, of individual, semi-collective or collective housing units for the main purpose of the sale or rental-sale and in accordance with the existing texts.
Under this Act, the real estate project includes a minimum of 20 dwellings on the same site.
- The development contract is a contract between the State represented by the State Secretariat responsible for Housing and a real estate promoter for the studies, financing and development of a land with the aim of producing housing, office or trade spaces on parable plots. The contract specifies the responsibilities of each party.

- The promise of sale is a prior sales contract signed by the seller (the real estate developer) and the purchaser of a real property, and established before notary.
- Decent housing is based on acceptable minimum standards of living space, durability of building materials, security, comfort, safety and access to basic urban services.
- Social housing is a housing offering a minimum of functionality, safety, comfort and hygiene produced with the assistance of the State for people, whose income corresponds to less than three (3) times the minimum wage, which cannot access decent housing in the free market.
- Economic housing is a housing offering features, safety, comfort and hygiene produced with the assistance of the State for middle-income populations.
- Habitat cooperatives are associations of people based on the principle of mutual union, solidarity and mutual assistance whose members are voluntarily grouped for the realization of social housing for the benefit of their members.

Article 3: In terms of design and construction, the activity of real estate promotion is governed by the general rules of development, urban planning and construction in force and those established by this Act. No real estate program can be set up in contradiction with the content of duly approved planning and urban planning without the required development authorizations.


Article 4: The real estate promotion activity consists of all the operations involved in the realization of real estate programs for sale or for sale. It is exercised by natural or legal persons.

Article 5: Physical persons exercise the activity of real estate promotion individually.
Legal entities of private law carry out the activity of real estate promotion in the following legal forms:
- Unipersonal society;
- Anonymous society;
- Limited liability company.

Article 6: To carry out the real estate promotion activity, real estate developers either individually or in the form of a private law corporation must be previously approved. Only registered real estate developers and registered in the trade register are allowed to initiate real estate programs. No one can claim the quality of real estate developer or exercise this activity if he or she is not a proprietor.
The procedure for obtaining approval for the exercise of the real estate promotion activity as well as the composition and operation of the Consultative Commission for the Promotion Immobilière are set by regulation.

Article 7: The real estate developer is responsible for the coordination of all operations related to the studies, research and mobilization of funding and the execution of the real estate program's work according to the rules of art.

Article 8: The State intervenes in the exercise of real estate promotion activity through its specialized public institutions and housing cooperatives.



Article 9: Real estate developers carry out their activities through the realization and management of real estate projects, the sale or rental of real estate products.

Article 10: Real estate programs designed for sale or rental-sale must be initiated by professionals with sufficient know-how and financial capacity.

Article 11: Real estate projects are classified according to habitat standing as follows: social housing:
economic habitat;
medium standing habitat;
high standing habitat;
mixed with several standings.

Article 12: For the realization of a real estate program, the developer concerned must first request from the housing department, the approval of the said real estate program, by submitting an application to which is attached a file which includes the written documents and drawings of the projected works as well as the financing guarantees of the project. The notification of approval of real estate programs specifies the classification of the project following the standings defined in Article 11.
The terms of reference for the content of the real estate programme, the procedure for its approval and the conditions for the disposal of the real property derived therefrom are set by regulation.


Article 13: The real estate programme is carried out in accordance with the financial capacities of the target population by:
- the State directly or through its specialized public institutions for social and economic housing;
- private real estate developers;
- habitat cooperatives;
- any self-constructing physical person with the direct or implicit contest of the State or its dismemberments.

Article 14: With the exception of housing cooperatives that produce social or medium standing housing for their members and individual self-builders, social housing is produced on behalf of the State or its specialized public institutions to ensure access to decent housing for low- and middle-income households.

Article 15: Real estate developers approved in accordance with the provisions defined in Articles 5 and 6 above can benefit from the benefits and encouragement of the State provided for in the Investment Code for the realization of "social" or "economic" housing programmes.
Authorized developers who carry out "social" real estate projects can benefit, in addition to the above benefits, from specific exemptions and encouragements on imported materials and materials:
- the Domestic Tax at Consumption (ICT) ;
- the Added Value Tax (VAT);
- the tax on profits released in any social classified real estate project;
- the patent contribution calculated for the cost of the work of the project classified as social.
The conditions for the realization and eligibility of social housing programs are set by regulation.

SECTION 1: From the proponent's obligation

Article 16: Unless otherwise provided in this Act, the sale of real property, individual or collective, constructed by real estate developers as part of the activities defined in the above section, shall be governed by common law.

Article 17: The conditions for the disposal of property arising from the real estate promotion activity must be defined in a written contract between the real estate developer and the purchaser, before a notary. The sale, by a real estate developer, of a real property built, to be built or under construction, must be subject to a contract duly established in the authentic form, in accordance with the existing legislative and regulatory provisions.
Depending on situations, it is concluded:
- a rental-sale contract;
- a contract for direct sale;
- a plan sale contract for disposal in the future state of completion. In this case, the payment of the price is modulated on the state of progress of the realization work. The contract must include the origin of the property of the land, the title number, if applicable, and the references of the lotir permit and the building permit number.

Article 18: Any delay in the actual delivery of the property, subject to the plan sales contract, results in delay penalties for the sponsor. The amount and maturity of the delay penalty and the terms and conditions of its payment are set by regulation.

Article 19: In addition to the consent of the two parties on the property sold and the selling price, the real estate must, under penalty of nullity of the contract, meet the technical and functional requirements required in respect of inhabitability.

Article 20: The real estate developer is responsible for the proper implementation of its obligations and for the persons with whom it has dealt with in a real estate project. To this end, it must take all necessary technical and legal measures to facilitate the management and preservation of the property.

Article 21: In particular, he is responsible for the full right of damage, even as a result of a soil defects, which compromise the solidity of the works or affect it in one of its constituent elements or one of its equipment and render it unfit for his destination. Its liability is only clear if it proves that the damage comes from a case of force majeure.
The deadlines for the completion of the work necessary for the repair of construction defects and/or the proper operation of the building equipment elements are fixed by a contract.

Article 22: The real estate developer must, for the benefit of its customers, commit its civil liability. As such, he is obliged to require his masters, contractors and other partners, all the legally required guarantees and assurances. These guarantees benefit the owners of the property produced.

SECTION 2: The obligation of buyers

Article 23: The subscribing of a contract is required to comply with the terms and to honour, as scheduled, the payments under its responsibility; the non-payment opening right, for the benefit of the real estate developer, to a penalty on the amount fallen. This penalty is specified in the contract between the proponent and the purchaser.


Article 24: The temporary concession of land in the private domain of the State and the emphytéotic lease constitute the modes of access to urban land by natural or legal persons of public or private law carrying out the activity of real estate promotion.

Article 25: Any natural or legal person of public or private law wishing to acquire a public domain land for the realization of a real estate program is required to apply to the departmental housing department to which the program and the content of the proposed project and its funding plan are attached.
After instruction of the application and on the advice of the Department of Housing, the Department of Housing is forwarded to the Department of Fields for the establishment of the concession title.

Article 26: The mobilization of the land necessary for the realization of social housing programmes and their viabilisation are the responsibility of the State.
However, the State may, as part of the implementation of real estate projects with private law promoters, for whom it deems necessary and on the basis of a specific contract, carry out the activities referred to in paragraph 1 by a co-contracting promoter.

Article 27: In addition to the land access modes provided for in section 24 above, real estate developers may acquire land by purchase for the exercise of their business.


Article 28: Offences to the provisions of this Act and the legislation taken for its application are punishable by administrative or penal sanctions and result in the withdrawal of the accreditation and suspension of the ongoing activities and the benefits granted without prejudice to the prosecution.

Article 29: Offences are found by officials authorized by the Department of Housing. To do so, they are required to prepare a detailed report on the type of offences committed by the property developer.

Article 30: Administrative sanctions are imposed by the departmental housing department after the advice of the Consultative Commission on the Promotion Immobilière. The suspension or withdrawal of the licence, the suspension of the activities or benefits granted for the realization of a real estate program, if the real estate developer:
- failed to its commitments as agreed with respect to the State, the buyers and its partners;
- failed to comply with its obligations as defined by the provisions of this Act and the laws taken for its implementation;
- no longer meets the conditions that prevailed in obtaining the approval;
- deliberately misunderstood in a serious and repeated manner the obligations incumbent upon it;
- stopped its activity without justification or without preventing the housing authority.

Article 31: Penal sanctions are imposed if the real estate promoter:
- exercised the activity of real estate promotion without approval;
- initiated work without prior administrative authorization;
- voluntarily provided inaccurate and incomplete indications in the documents, acts and contracts to which a real estate programme was implemented;
- required or accepted a payment, deposit, subscription or trade effect prior to the signing of the sale contract;
- breached the provisions of articles 16 to 22 of this Law;
- did not subscribe to the required assurances and guarantees.
The assessment of the penalty, the amount of the fine, the length of imprisonment and the terms of application will be determined by law.


Article 32: Real estate developers already in Djibouti have a period of four and twenty ten (90) days to comply with the provisions of this Act as of the date of its publication.

Article 33: This Act repeals all previous provisions to the contrary.

Article 34: The Minister of Habitat, Urbanism and the Environment, the Minister of Budget and the Secretary of State to the Ministry of Habitat, Urbanism and the Environment responsible for Housing are responsible for its implementation.

Article 35: This Act shall enter into force as soon as it is published in the Official Journal of the Republic of Djibouti.

Done in Djibouti on 07/07/2013

President of the Republic,
Head of Government