Registration of condominium plans mandatory

M.M. Abul KALAM

Apartment Ownership (Amendment) Act No. 39 of 2003 Section 3(1) makes it necessary for registration of all Condominium Plans, Provisional Condominium Plans and Semi Condominium Plans to the Registrar. Here the Registrar means the Registrar of Lands of the respective area.

Registration under this section is discretionary since the word may is used. However, it becomes mandatory when the condominium is complete.

The two requirements for this are: a completed building and secondly the building should be fit for use or occupation. So when there is a completed building capable of being subdivided and certified by GM/CMA (Condominium Management Authority) as it is fit for occupation or use then according to s.3 (1) of the Act, it is compulsory to register such condominium plans within the stipulated time period.

According to Section 3 (2)

(a) Within 18 months from first sale or agreement to sell.

And

(b) Within 6 months from the date of completion of the building.

CMA only looks into common amenities and common elements of the building or the apartment or the condominium to give its certificate. These two (Common elements and Common amenities) are very vital in condominium living and the CMA jurisdiction is limited only to that. When checking the two issues, the CMA is inevitably has to go into other details of the condominium.

According to the interpretation in the Apartment Ownership (Amendment) Act No. 45 of 1982: Building includes any building partially completed or, where applicable, any building to be erected within a storey shown or specified in any Condominium Subdivision Plan for approval to the authority for the time being responsible for granting such approval;

So the subject building need not be always complete to get CMA into action. Even incomplete condominium building, semi complete condo building or condo building still not commenced the construction but in planning stage also could fall within the ambit of the CMA.

According to the above amendment, the Act No. 45 of 1982 has provided for semi-Condominium and provisional Condominiums even before the express provision in the subsequent Act No. 39 of 2003.

The Act No. 39 of 2003 provides for the issue of semi condominium certificate for partly completed condominiums and provisional condominium certificate for condominiums that are in planning stage.

The CMA has identified number of completed buildings capable of being subdivided and fit for occupation/use but not applied for CMA certificate. In other words, any condominiums which have been completed upon obtaining the CoC, Building Plan and Development Permit from the local authority shall be submitted for CMA certificate.

They are either sold or executed agreement to sell and based on this sale agreements those who purchased have occupied those units long ago even prior to the amendments to Apartment Ownership Act No. 30 of 2003. Also prior to the establishment of the Condominium Management Authority by Act No. 24 of 2003.

The developer sells or enters into sale agreement with buyers mostly on the basis that the apartment is complete and fit for occupation or use. It is on that basis the buyers pay, come into occupation and thereafter the possession is transferred from the owner or the developer to the buyer on such sale agreement. But they conveniently claim that the building is incomplete.

CMA/GM certifies to the effect that it is fit for occupation or use for the purpose of registration of that condominium plan. The apartment is already complete and only on that basis the developers do the marketing and sell the apartment. But thereafter the parties are unable to get the title deeds for their respective units in the apartment since the vital provisions regarding registration of the Condominium Plans in Section 3 are not complied with.

Sale of individual units of a condominium could be attested by Notary and registered with the Registrar of Lands only when the Condominium Plan is registered with the Registrar already. It is only at this stage the parties who purchased their apartments on mere sale agreements realize the seriousness of the whole issue.

Condominiums/apartments built prior to the operation of the amending Act No. 39 of 2003 but NOT registered their Condominium Plans are also now required to comply with the mandatory requirements of this section.

The CMA continues to get complaints from residents of several condominiums both in and out of Colombo. The CMA has concluded some inquiries to the best of its ability with its limited resources. There are few instances where the orders made by the CMA are challenged in the Court of Appeal.

There are still many more condominiums where the developers have not complied with the above legal provisions. We hold inquiries into such complaints and in few cases we have taken the defaulting developers to courts in terms of s. 3 (4) of the said Act.

The CMA has filed plaints against such persons who contravene s.3 (2) (a) and (b) and s.3 (3) (a) and (b) in terms of s.3 (4) read with s.136 (1) (a) of the Code of Criminal Procedure Act No. 15 of 1979.

It is argued on behalf of those who have not complied with s.3 (2) that the condominium is either not complete or not fit for occupation or use in terms of the law. Then the question arises as to how they obtained the final CoC for the incomplete building and how the parties entered into sales agreement and got the buyers to occupy the apartment if such apartment is NOT fit for occupation. Assuming that the argument is correct, and then it is an indictment on the seller/developer as to selling apartment and making buyers to occupy an apartment which is not fit for occupation. In my view the argument is on the face of it is very week and fundamentally wrong.

The CMA has established its limited judicial authority by prosecuting those who contravene the provisions of the Apartment Ownership Law and thereby has discharged its duty to protect the bona fide purchasers of condominium from some dishonest developers.

The writer is an Attorney at Law and Chairman of the Condominium Management Authority (CMA)