Introduction

Check 2 - Check the Condominium Plan

An apartment purchase can involve registration with the relevant authority and the Land Registry. Buyers should understand whether the condominium plan has been properly registered and what stage the registration process has reached.

For an apartment that is still being developed, the legal documentation may progress through different stages. Buyers should therefore obtain professional advice on the current registration status before making a significant financial commitment.

Check 4 - Check the Declaration Deed

Another important document in a condominium transaction is the Declaration Deed. This establishes important details relating to the condominium property and individual units.

Buyers should make sure that the relevant Declaration Deed and supporting documents have been properly prepared and registered where required.

The legal status of the particular apartment should be independently verified rather than assumed based on information provided by a salesperson.

Check 5 - Understand the Certificate of Conformity

Check 6 - Research the Developer

Check 7 - Understand Business Risk vs. Legal Risk

Buying an apartment under construction can potentially provide a higher investment gain because the buyer may purchase at an earlier stage and benefit from appreciation as construction progresses.

However, higher potential returns can also come with additional risk. There is a difference between legal risk and business risk.

With a reputable developer, proper legal checks can help minimize legal risk. However, the buyer may still face business risks related to construction delays, funding, market conditions, or the developer's ability to complete the project.

Understanding both types of risk is essential.

Check 8 - Know Where Your Money Is Going

Before making payments, buyers should clearly understand the payment structure and who is receiving the funds. All payments should be properly documented.

Buyers should ensure that the agreement clearly identifies the particular apartment being purchased and outlines the relevant payment terms.

Do not make significant payments simply because a salesperson promises that everything will be completed later. The legal documentation and payment arrangements should be independently reviewed before committing substantial funds.

Check 9 - Choose the Developer Carefully

The Bottom Line

Buying an apartment in Sri Lanka is different from buying land. Whether the apartment is already completed or still under construction, buyers need to understand the legal documents, registration process, condominium plan, Declaration Deed, COC requirements, and developer-related risks.

An apartment under construction can offer attractive investment potential, but higher potential returns can come with additional business risk.

The safest approach is not to rely solely on advertisements, sales representatives, or promises.

Before committing your money, verify the property, review the relevant legal documents, understand the developer's position, and obtain professional legal advice.