One of the series of lectures of the Post Attorney Diploma in Conveyancing and Real Property Rights conducted by the Institute of Advanced Legal Studies affiliated to the Sri Lanka Law College (2019 - 2020)

1. CONDOMINIUM PROPERTY LAW – Part 4
For the Post Attorney Diploma in “Conveyancing and Real Property Rights”
conducted by the Institute of Advanced Legal Studies affiliated to the Sri Lanka Law College (2019 – 2020)
- Presented by Ajithaa Edirimane, LLB (Colombo) MLB (Hamburg)
Attorney-at-Law & Notary Public
No part of this slide presentation shall be extracted,
copied or used without Ajithaa Edirimane’s
permission

2.  SYLLABUS
 1. 21/9/2019 (11.15 – 1.15) Condominium concept and Preliminary Steps
 2. 12/10/2019 (11.15 – 1.15) Creation of a condominium property and
Developer’s Role
 3. 19/10/2019 (09.00 –11.00) Seminar with resources persons from UDA,
Land Registry and Survey General’s Department
 4. 26/10/2019 (09.00 –11.00) Management of Condominium Properties,
Condominium Councils, By-laws and dispute resolution
(lecture and a presentation from CMA resource person)
Condominium Meetings and Financial Issues
 6. 09/11/2019 (09.00 – 11.00) Revision of Condominium properties,
Cessation of a condominium property, Condominium
property sales and transfers of title. Mock negotiation
between a buyer and seller, Discussion on questions and
problems on condominium related issues.

3. 09/11/2019 (9.00 – 11.00) REVISION AND CESSATION OF
A CONDOMINIUM PROPERTY AND CONDOMINIUM
SALES
 9.00 – 10.00
 Revision to Condominium Plan by Developer
 Revision to a unit by a unit owner
 Revision to Common Elements by Management Corporation
 Cessation of a condominium property and winding up of the MC
 10.05 – 10.20
 Sale of condominiums to foreigners
 Application of VAT on condominiums
 Certificate issued by the MC in the event of a re-sale
 Transfer of Title and stamp duty assessment
 10.20 – 11.00 – Mock negotiation of a sales agreement

4. REVISIONS TO THE CONDOMINIUM PROPERTY BY THE
DEVELOPER
1. Plan of Addition (Sec. 12 of Act No. 39 of 2003 amending Sec. 8A of principle
act) – The Developer of a Semi Condominium property applying for the registration of a completed
condominium property by adding the subsequently completed units.
2. The application to the Registrar of Lands or Registrar of Title under a Deed of Declaration requesting the
addition of the said units should contain the following –
1. The survey plan referred to as “The Plan of Addition” of the registered Semi Condominium Plan
showing the relevant condominium units added to the Semi Condominium Plan.
2. The undivided share value of each of the units added.
3. Prior registration No. of the previously registered semi condominium property (under Title
Registration, the Cadastral Map No. and Certificate of Condominium Title of previously registered
units.)
4. Certificate from a qualified Architect/ Civil Engineer / Structural Engineer that it conforms to the
position existing on the land.
5. Certificate of Conformity (COC ) issued for the added units
6. Certificate from the General Manager of the Condominium Management Authority (The application
should be in accordance with Sec. 3 Part 1 of the CMA Regulations gazetted on 5.7.2017)

5. PLAN OF ADDITION (CONT.)
1. Plan of Amendment (sec. 12 of Act No. 39 of 2003 amending Sec. 8B of
principle act) – The Developer of a Provisional Condominium property applying for the registration of a
plan of amendment to a registered Provisional condominium property.
2. The application to the Registrar of Lands or Registrar of Title under a Deed of Declaration requesting the
amendment to the Provisional Condominium Plan should contain the following –
1. The survey plan referred to as “The Plan of Amendment” showing the alterations to the registered
Provisional Condominium Plan .
2. A financial report confirming the cost of construction of the building due to the amendments verified by a
Quantity Surveyor / Civil / Structural Engineer relating to-
1. Availability of funds for the construction supported by a certificate from a recognized finance institution
indicating willingness to finance the project
2. Details of finances already raised and to be raised by mortgaging the Provisional Condominium Property and
the amount to be secured against each Provisional Condominium unit, the name of the financial institution
supported by a certificate.
3. Certificate from the General Manager of the Condominium Management Authority indicating that the
alterations does not hinder the control, management & administration of common elements (The
application should be in accordance with Sec. 3 Part 1 of the CMA Regulations gazetted on 5.7.2017)
4. Implementation Plan of the total construction indicating the date of commencement and date of completion
of the following supported by a certificate from a qualified Architect/ Civil / Structural Engineer
5. Approval from the relevant authority for the amendments to the approved Building Plan

6. REVISION TO CONDOMINIUM UNIT BY OWNER OR OWNERS OF
UNITS
1. Plan of Re-division / Plan of Amalgamation of condominium unit / units by a unit
owner/s – Sec. 12 of the principle act amended by Sec. 18 of Act No. 39 of 2003
- Any owner or owners of condominium unit/s of a completed condominium property or semi condominium property may apply to the
Registrar of Lands or Registrar of Title under a Deed of Declaration for the registration of a Plan of Re-division or a Plan of
Amalgamation of the registered condominium plan or registered semi condominium plan showing the changes affected to the unit/s
consequent to the re-division or amalgamation with the following –
- The survey plan showing the changes affected to the existing unit / units
- The undivided share value assigned to each such divided units or amalgamated unit
- The prior registration no. at the relevant land registry or in the case of Title Registration the reference no. of the
cadastral map and certificate of title of each unit.
- Certificate from a qualified Architect/ Civil Engineer / Structural Engineer
- Approval from the relevant authority for the re-division and amalgamation to the approved building plan
- Consent of relevant mortgagee (if any)
- Certificate from the General Manager of the Condominium Management Authority indicating that the alterations does
not hinder the control, management & administration of common elements (The CMA Regulations gazetted on 5.7.2017
does not indicate the procedure to be followed in seeking approval. Therefore, each case maybe considered on the
basis of issues that apply for the respective condominium property.)
- The approval of the respective Management Corporation, though not required as per the statutory provision,
should be an important requirement to be considered by the CMA, since it is the MC of the particular condominium
property who would be the best party to give an unbiased view of whether such amalgamation or re-division will
have an adverse effect on the control, management and administration of the condominium property

7. REVISION TO COMMON ELEMENTS BY MANAGEMENT
CORPORATION
Revision to Common Elements by a Management Corporation may arise due to a transfer of
Common Elements, acquisition of Common Elements or by an amalgamation of Management
Corporations –
1. Transfer of Common Elements – Sec. 16 (1) of Act No. 45 of 1982
- The Council of the MC should call for tenders and accept the highest offer for the part or portion of the common
elements (land) subject to the sale and circulate to all unit owners details of the transaction along with the notice
calling for an EGM. (e.g. Land not built and not needed for the condominium property. The Common Elements sold
will be free from servitudes. )
- The owners of all condominium units should approve by a Special Resolution passed at the EGM of the Management
Corporation to transfer a part or portion of the Common Elements of the condominium property.
- Subsequent to the EGM, the Council should issue a Certificate under the seal of the Management Corporation that
the Special Resolution was duly passed, consents from parties having a registered interest (mortgagees) were duly
obtained and approval was obtained from the relevant authority for changes to the approved Building Plan and
subdivision of land, the Registrar of Lands / Title (as applicable).
- Approval from the CMA would also be necessary even thought it is not provided under the above provision of the
1945 Act. Since the registered Condominium Plan of the condominium property has to be amended the procedure
given in Sec. 3 Part 1 of the CMA Regulations gazetted on 5.7.2017 should be observed.
- The Deed of Transfer transferring the Common Element to the prospective purchaser should be under the Common
Seal of the Management Corporation attested by two Council Members (for which prior approval of the Council should
be obtained) and the Certificate issued under the Seal of the MC annexed to the said Deed.
- The Council should credit the sale price paid to the Management Fund of the MC or with the approval of the Members
at the EGM, to the Sinking Fund.

8. REVISION TO COMMON ELEMENTS (CONT.)
2. Acquisition of Common Elements – Sec. 17 (1) of Act No. 45 of 1982
- The Council of the MC should circulate to all unit owners details of the transaction along with the notice calling for
an EGM.
- The unit owners at an EGM may resolve by a Special Resolution that the Management
Corporation shall acquire land free from encumbrances at the sale price stipulated which shall be added to the Common
Elements of the Condominium property.
For example: land adjoining the Condominium Property to be used as a Car Park or playground for unit
owners or a condominium unit which is sold by a unit owner adjacent to the common elements enabling the expansion
of the common elements of the condominium property.
- The Council should obtain from the relevant authority for changes to the approved Building Plan consequent to the
addition to the common elements, notify the Registrar of Lands / Title (as applicable).
- Approval from the CMA would also be necessary even thought it is not provided under the above provision of the 1945
Act. Since the registered Condominium Plan of the condominium property has to be amended the procedure given in Sec.
3 Part 1 of the CMA Regulations gazetted on 5.7.2017 should be observed.
- The land added to the Common Elements will be jointly owned by all unit owners as “tenants in common” proportionate to
the share value assigned to their respective units and subject to the same covenants and conditions. In the event a
condominium unit is subject to a mortgage, the undivided share value in the additional Common Elements assigned to the
said unit will also be subject to the same mortgage.

9. REVISION TO COMMON ELEMENTS (CONT.)
3. Amalgamation of Common Elements – Sec. 18(1) of Act No. 45 of 1982
- This occurs when the unit owners of the Transferor Management Corporation resolves by a Special
Resolution at an EGM that they will become amalgamated to the Transferee Management Corporation.
- Similarly, the unit owners of the Transferee Management Corporation shall resolve by a Special
Resolution passed at an EGM to accept the Common Elements transferred from the Transferor
Management Corporation.
- The Share Values assigned to the condominium units of the Transferee MC and the condominiums units
added will remain the same, but consequent to the increase in Common Elements and corresponding increase
in cost of maintenance, the service charge per Share Value may increase. If the common element
maintenance cost is spread among large no. of units, the service charge increase can be only marginal.
- Upon amalgamation of Common Elements:
- The Transferor Management Corporation will be amalgamated into a single Management
Corporation which shall be the “Transferee Management Corporation”.
- All the members of the Transferor Management Corporation shall become members of the
Transferee Management Corporation
- The Council of the Transferor MC will become part of the Council of the Transferee MC, until
a new Council for the Transferee MC is appointed.
- All properties and all liabilities of the Transferor MC will become part of the Transferee MC.
- All legal proceedings by or against the Transferor MC will be continued by or against the
Transferee MC

10. REVISION TO COMMON ELEMENTS (CONT.)
- Under the Apartment Ownership Act, there are no
separate provisions for the construction of
“Phased Condominium Properties”
i.e. to construct a condominium project with
several towers in phases. In the USA these are
categorized as “Expandable Condominium Properties” and there are specific provisions
applicable for such condominium properties in the Condominium property laws of each State.
- To create a single condominium property where construction takes place in phases, the
following methods can be adopted –
- A. Amalgamating the Common Elements under Sec 18(1) of Act No. 45 of 1982, (that is by
registering separate condominium properties for each phase and thereafter
amalgamating the Common Elements)
- B. Registering a Provisional Condominium Property for the entire project covering all phases
and thereafter registering a Semi Condominium Property for each phase and finally
registering the entirety completed on the structure of the Provisional Condominium
property as a complete Condominium Property.

11. REVISIONS TO CONDOMINIUM PROPERTIES BY COURT
ORDER
Revision under Court Order – Sec 19 (1) of Act No. 45 of 1982
- Sometimes there could be difficulties in getting the requisite number of votes to pass a special
resolution to transfer land forming part of Common Elements, acquire land as part of the Common
Elements or to amalgamate Common Elements.
- In such a situation, a unit owner may make an application to the relevant District Court where
the registered Management Corporation is situated, for an order to direct the said Management
Corporation to transfer, to acquire or amalgamate Common Elements.
- The court needs to be satisfied that it is impossible to convene an EGM to pass a Special
Resolution and that it is just and equitable having regard to all unit owners of the condominium
property to transfer part of the Common Elements, acquire Common Elements or amalgamate
Common Elements and shall give an Order to that effect.
- Every instrument of transfer effected under a court order should be accompanied by a certified true
copy of the court order, when it is submitted for registration.

12. CESSATION OR TERMINATION OF
A CONDOMINIUM PROPERTY
Sec. 20Q of Act No. 45 of 1982 amended by Sec.40 of Act No.39, 2003
- A subdivided building depicted in a Condominium Plan or a Semi
Condominium Plan is deemed to be “destroyed” when the owners of all
units resolve by unanimous resolution that “the subdivided building be
destroyed”.
- The above provision does not indicate when such decision can be
taken by the unit owners or whether it is really necessary for the
Building to be destroyed to terminate the condominium property.
- Condominium unit owners may pass a resolution to terminate a
condominium property for any of the following reasons:
- Difficulty in reinstating a damaged subdivided building
- The subdivided building is dilapidated and a danger to its occupants
- The need to destroy and construct a modern building in its place
- To sell the land to accept a good offer to benefit all owners
- To sell the entire building and land without the subdivision of units for a purchaser.

13. CESSATION OR TERMINATION OF A CONDOMINIUM PROPERTY (CONT)
The statutory procedure for termination / cessation of a condominium property:
- Convene an Extraordinary General Meeting (EGM) to obtain the unanimous consent of all unit owners (i.e. all persons who are
entitled to vote are present either in person or by proxy).
- If it is not possible to obtain the unanimous consent, an application to court can be made under Sec. 20M for the appointment of
Public Trustee or some other fit and proper person or body to exercise the vote attached to that unit.
- The Management Corporation should thereafter obtain approval of the CMA in terms of CMA Regulations gazetted on 5.7.2017. If
the building had been constructed prior to the Condominium Management Authority Act of 2003, then it is possible to lodge a
Notice only with the Registrar of Lands/ Registrar of Title (as appropriate) with prior registration nos./ reference nos. of cadastral
maps and title certificates with a certified true copy of the unanimous resolution. If not, such Notice should be accompanied with
the approval granted by the CMA.
- Upon receipt of the Notice, a memorial will be recorded on the relevant volume / folios of the Land Registry comprising the
condominium property or in the Title Registry (as applicable).
- Thereafter each unit owner will cease to be the owner of the unit and all unit owners will jointly own the land as “tenants in
common” in proportion to the share values assigned to their respective units. Any encumbrance on the unit will be an
encumbrance on such owner’s undivided share of the land.
- By a separate unanimous resolution, the owners can request the Management Corporation to transfer the land to the selected
buyer or take such action as given in the same resolution. The Deed of Transfer executed by the Management Corporation
should be under its Seal and attested by 2 Council Members. It needs to be accompanied by a Certificate issued by the MC
under its Seal that the Resolution was duly passed and that all consents were obtained. When land is transferred, the title Deeds
of unit owners should be handed over to the Land Registry/ Title Registry for cancellation of the units.
- The Council will continue to function till the MC is wound up, unless on a Petition to court a Liquidator is appointed by court.

14. CESSATION OR TERMINATION OF A CONDOMINIUM PROPERTY (CONT.)
Winding up the Management Corporation – Sec. 20Q of Act No. 45 of 1982 amended by Sec. 40
of Act No. 39 of 2003.
Who can Petition to
Court
1. CMA
2. Management Corporation or its
Liquidator
3. A former owner of a unit
4. A former Mortgagee
1. All former owners have to contribute to settle the debts, liabilities and cost of winding up.
2. Upon conclusion of winding up, the remaining assets of the MC will distributed
among all former owners based on the share value assigned to their respective
unit.
3. Upon completing winding up, the court will be notified by one of the above mentioned
parties that winding up is completed.
4. When the court is satisfied an Order will be issued to that effect, whereupon the MC will
stand dissolved.
5. This Order is then sent to the CMA and to the Land Registry/ Title Registry (as
applicable) which will then record the same resulting in all units recorded getting
cancelled.

15. SALE OF CONDOMINIUM UNITS
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16. 2. DUE DILIGENCE
1. Sales Agreement
2. Completion of instalment payment
3. Deed of Transfer
 Conditional sale / not a
transfer of title
 Transfer of Title
 Deed of Release of
mortgage on unit

17. DUE DILIGENCE PROCESS
 Checking the ‘title’ and ‘plan’ - to confirm ownership and boundary
 checking for encumbrances and restrictions on the property
 making sure property rates, electricity and water consumption charges are paid to the
appropriate party
 Checking environmental risks – from coastal, river or surface water flooding
 arranging an assessment for stamp duty payment, obtaining an opinion and the payment
of stamp duty
 for the purchaser, liaising with the financiers of the purchaser to satisfy their requirements
before settlement - Review Tripartite Agreements
 for the vendor, liaising with the financiers of the vendor to arrange settlement and obtain
discharge of mortgages on the title
 preparation of legal documents
 arranging and attending final settlement.

18.  Check title of land
 Check Street Line & Building Line Certificate, Non-Vesting & Ownership Certificate,
 Property Rate payments.
 Check whether Survey Plan has been approved by local authority including water & sewage connections.
 Check the reputation of Contractor and Developer. (In Sri Lanka there is no statutory requirement for the Developer to
have a license unlike in Singapore).
 Check company documents if Developer / owner is a corporate body
 Ensure there is a Building Permit and approved building plan in compliance with conditions laid down by
planning authority, applicable regulations, etc. (e.g. in accordance with City of Colombo Development Plan,
prepared under Section 8A and the Planning and Building Regulations under Section 21 of Urban Development
Authority Law.) and Coast Conservation Certificate if close to the ocean
 Check Deed of Declaration and whether the project is registered as a Provisional Condominium Property under Act
No. 39 of 2003 (Reg. ConP/..)
 Check whether CMA Preliminary Clearance Letter has been obtained.
 Check environmental issues. (i.e. potential flooding area, other hazards, etc.) Coast Conservation permit if close to the
sea.
 Check whether there is a Contractor’s Insurance cover which will be valid and effective till the condominium
property is insured under the Management Corporation for replacement value of the building (and Title
Insurance for defective owner’s title, )
 Proposal for management of the condominium property till its handed over to the MC including its By-laws, proposed
Sinking Fund, Management Fund, etc.
For lawyers representing
buyers of condos and
banks when there is no
registered condominium
property

19. LAND (RESTRICTIONS ON ALIENATION) ACT NO. 38 OF 2014
Sec 2(1) – prohibits the transfer of title of any land situated in Sri Lanka to :
A foreigner (non-citizen)
A local company in which the foreign shareholding is 50% or more
A foreign company
EXEMPTION
Sec. 3 (1) (b) –
AS FROM JULY 2018 UNDER ACT NO.21 OF 2018. FOREIGNERS WILL BE ABLE TO
PURCHASE ANY UNIT OF A CONDOMINIUM PROPERTY
Provided:
 the entire value shall be paid up front
 through an inward foreign remittance
 (Through an Inward Investment Account (IIA)
 prior to the execution of deed of transferI
SELLER
How does
this
address the
distribution
of residue
to a foreign
owner
when a
condo
building is
“deemed
destroyed”
?

20. CONDOMINIUM SALES
1. A sale can take place only of a condominium unit of a registered completed condominium property or registered semi
condominium property either as:
1. The first sale of a condominium unit
2. The re-sale of a condominium unit
2. In both instances it is important to check the following:
- Check whether the Developer / Owner of the land, has title to the property.
- Check whether there are any encumbrances on the land. If so, whether a Deed of Release will be signed to
discharge the portion of a mortgage attached to the unit
- Check the terms and conditions of an agreement entered between the Developer and Owner of the
land (if applicable) which could restrict the transfer of title to a prospective buyer. (i.e. till the Developer pays the
Owner a certain percentage of the sales proceeds of units sold, no title will pass to a unit owner)
- Check the Condominium Plan to ascertain whether the Developer has retained certain Common Areas for
private use and whether any promised facilities remain as Common Elements.
- Check the Budget prepared for the financial year and the service charge that needs to be paid for
maintenance of common elements and when it needs to be paid.
- In a new condominium property, whether the 1st AGM had been held and whether the Developer had
completed all work and there are no work which is incomplete.
- Check whether an insurance had been obtained for the replacement value of the Building.
- In the case of a re-sale condominium, whether the MC Certificate has been obtained.

21. RESPONSIBILITY OF MANAGEMENT CORPORATION TO ISSUE A
CERTIFICATE FOR RE-SALE CONDOMINIUMS
 A prospective buyer can insist from the current owner for a Certificate issued by
the MC under Sec. 20 (H)(4) of Act No. 39 of 2003 stating:
 (a) the amount determined as Contribution to be levied from the owner of unit
 (b) the time and manner of payment of Contribution
 (c ) the extent to which such Contribution has been paid (i.e. whether any
outstanding payments are due to be collected)
 (d) the amount recoverable by the Management Corporation in respect of the unit
for repairs in respect of the said unit or Common Elements, which is due and
recoverable from the above unit owner in terms of Sec. 20 (c)
 (e) The sums standing to the credit of the Management Fund
 (f) whether the Management Corporation has incurred any expenditure or is about
to incur such expenditure and if so, the estimated amount of the said expenditure or
the general nature of such repairs, etc.