Lawful Real Estate – What You Need to Know

‘Do you own the property?’ is a very common question directed to the seller by most potential buyers. This is due to the growth of several phony and fraudulent property owners in the market. The Government of Sri Lanka has strengthened the real estate laws over the years in an attempt to reduce shams and fraudulent ownership documents.

However, the lack of knowledge among the general public with regard to property laws results in many people facing difficulties when purchasing a risk-free property. Accordingly, Lanka Property Web interviewed a leading legal representative, Sabina Omar, in order to shed light on the legal elements of real estate in Sri Lanka.

How do I check if the property is problem-free?

“The title is very important because it establishes the history of the property and how ‘healthy’ a piece of land is”, she said. Title is a legal term that establishes the lawful ownership of the property by an individual or organization. Therefore, the first step when you are looking to purchase a property is to check if the title is clear. “The accepted practice is to conduct a review of the title going back 25 to 30 years.”

A property with a clear title ensures that it can be sold or mortgaged with relative ease when necessary because the sale of property in Sri Lanka involves extensive paperwork and a single error (and the efforts to correct it) could consume a lot of time.

There are four significant documents that should be reviewed by a lawyer to find out if the title to a property is clear:

• The Deed (transfer, gift etc.) relevant to the property
• Land Registry search extracts
• Survey plan
• Title report (prepared by a lawyer based on the above 3 documents)

According to Sabina Omar, it is important that you obtain the four aforesaid documents to establish clear title and avoid any risks related to fraudulent or forged documentation.

When investing a large amount of money, one cannot be extra-careful. For this reason, there are few more ways to identify if the ownership of the property is as stated:

• Non-vesting certificate
• Certificate of ownership
• Utility supply and bills
• Street line certification

These documents can be obtained from the relevant municipal council/local authority/service provider and should be provided by the seller.