CONDOMINIUMS IN SRI LANKA Under the Apartment Ownership

CONDOMINIUMS IN SRI LANKA Under the Apartment Ownership Law No. 11 of 1973 and its amendments

What is the Roman Dutch Law concept of Ownership? n n Immovable properties governed by Roman Dutch Law in Sri Lanka According to Roman Dutch Law, a ‘Building goes with the land’ This is changed in respect of apartments in multistorey buildings by subsequent legislation, namely by the Apartment Ownership Law Legislation introduces a new concept of ownership

A new concept of ownership of immovable property n Ownership of horizontal layers of land

Legislation n n n Condominium Property Act No. 12 of 1970 - repealed The Apartment Ownership Law No. 11 of 1973 (“Apartment Ownership Law”) This Act was subsequently amended by the following legislation: Apartment Ownership (Amendment) Act No. 45 of 1982 Apartment Ownership (Special Provisions) Act No. 4 of 1999 Apartment Ownership (Special Provisions) Act No. 27 of 2002 Apartment Ownership (Amendment) Act No. 39 of 2003

What is a Condominium? Definition - Sec 41(6) of Act No. 39 of 2003 n A Condominium has six (6) sides Boundaries: n North…… n South…… n East……. . n West……. . n Zenith…. . n Nadir……

Defined space in a plan of subdivision Shown as a separate condominium parcel Provisional Condominium Plan n Semi Condominium Plan n

Designed for independent use n n In a building of more than one storey Divided into one or more rooms Sometimes with accessory units Direct exit to a road or to a common area leading to a road

Servitudes in Condominium Properties n n What are the servitudes attached to Condominium Properties? (Sec. 13 of Law No. 11 of 1973 as amended ) Right to light, air, support, shelter, access, passage of water, electricity, cooled air, drainage, etc. ,

Common Elements of a Condominium Property n All areas which do not form part of any condominium unit in a Condominium Property Garden Corridors Swimming Pool Lifts Garden n Which are described as Common Elements and shown in a Plan of subdivision

‘Common Elements’ (Sec. 26 of Act No. 11 of 1973 as amended by Act No. 45 of 1982) n n n foundations, columns, gardens, external beams, supports, main walls, roofs, walls, lobbies, corridors, stairways, fire escapes, entrances, exits of the building or buildings; car parks, recreational or community facilities, parking areas, storage spaces; central and appurtenant installations for services such as power, light, gas, hot and cold water, heating, refrigeration and air conditioning, telephone, radio, garbage disposal and incinerators;

n n n lifts, escalators, tanks, pumps, motors, fans, compressors, ducts and in general all apparatus and installations existing for common use; premises for use by security guards, caretakers and watchmen; all facilities described as common elements in any plan for a condominium development approved by the authority responsible for such approval and all facilities which may be shown in the legend of any plan as common elements;

n all other parts of the land not comprised in any unit necessary or convenient to the existence and maintenance and for the reasonable common use and safety of the common elements including the roads and access drains and ditches, lanes parks, playgrounds, and other open spaces connected with the condominium property.

Common Elements and Share Values n n Who owns Common Elements? - All Owners of Condominium Units - On the basis of the share values assigned to each unit What are Share Values and why are they important? - to determine extent of ownership of common elements - to fix the Contribution payable by each unit - to divide the land component in a cessation of a condominium property.

Contributions Sec. 28 (3) Act No. 39 0 f 2003 ‘Contributions’ are levied from Owners : n - to cover expenses related to maintenance of the condominium property to be credited to a Management Fund n - to create a Sinking Fund for future repairs and major renovations of the Condominium Property

Two types of Ownership n Freehold – Condominium unit n Ownership in Common – Common Elements

Condominium Property Sec. 3(a) of Act No. 39 of 2003 Condominium Property: n A Building constructed on a single land with defined boundaries. n The building can be divided into separate units otherwise known as “condominium parcels” n Each condominium parcel can be sold, leased or mortgaged as any other free hold property. n

Provisional Condominium Property Sec. 3 (b) A Provisional Condominium Property is a ‘condominium property which is to be constructed’ and n is a non-existent building seen only on a Provisional Condominium Plan n

Semi Condominium Property Sec. 3(c) of Act No. 39 of 2003 Semi Condominium Property”, has the following features: n A partly erected building on a single land with defined boundaries; n the building consists of more than one condominium parcel; and n each condominium parcel is fit for human habitation. n

Creation of condominiums Deed of Declaration registered under the Registration of Documents Ordinance Filed by the Owner of the land n Documents filed with a Deed of Declaration n Registration under the Registration of Title Act No. 21 of 1998 (Sec. 15 of Act No. 39 of 2003) Excludes: Properties situated in Districts which are not covered by the Registration of Title Act. n

Mandatory Registration Sec. 4 of the Act No. 39 of 2003 n If an agreement to sell has taken place prior to the registration of the Condominium Property – - The application for registration of the Condominium Property should be submitted within 18 months from the date of the first sale or the agreement to sell; or - within 3 months of completion of the building, whichever occurs first.

n If the sale occurs after the completion of the building - the application for registration should be submitted within 6 months from the date of completion of the building

Condominium Management Authority and the ‘CMA Certificate’ Condominium Management Authority regulates standards of condominium properties n It was established under the Common Amenities Board Act No. 24 of 2003 n A Certificate from the General Manager of the Condominium Management Authority is mandatory for registration of any condominium project after the enactment of Act No. 39 of 2003. n

CMA Certificate n certifies that: n the common amenities provided for the welfare and benefit of the occupants of the condominiums are satisfactory; and n arrangements made as regards the control, administration, maintenance and management of the common elements are satisfactory.

Encumbrances recognized by the Act n Mortgages registered on the land prior to the registration of the Plan of Subdivision n Mortgages registered on the land after the registration of the Plan of Subdivision securing the land as collateral for construction of the condominium property. n Agreements of Sale for individual provisional condominium parcels which have been registered at the respective Land Registry.

Effect of Registration Establishing title to units - Separate ownership of unit n n - Creation of Management Corporation Condominium Plan No…. All unit owners as Members

n Upon the registration of the Plan of subdivision mortgages registered on the land will extend to each condominium parcel forming part of the subdivided building.

n Upon the registration of the Semi Condominium Plan or the Condominium Plan, each subdivided building, shall be deemed to have been divided into the segments (condominium parcels and common elements) as reflected in the registered Plan

the owner of each condominium unit will become the “absolute owner” of the respective condominium unit and n the percentage of common elements or share value registered against such condominium unit n subject to any encumbrances registered on the property. n

Management Corporation Sec. 20 B of Act No. 45 of 1982 n Upon the registration of the Deed of Declaration and the plan of the subdivided property at the respective Land Registry, a body corporate referred to as a Management Corporation comes into existence n having its own common seal and the power to sue and be sued under its name. n All owners of condominium parcels become a body corporate with perpetual succession under the provisions of the Apartment Ownership Law.

Duties and Responsibilities of the MC - main duty is to maintain, administer and manage the Common Elements n n Management is through a Council of the Management Corporation n Can create its own By-laws which are not in conflict with the statutory By-laws – 2 nd Schedule of the Act n Constitution of the MC – 1 st Schedule of the Act