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Procedures for registering property in Sri Lanka

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Procedures for registering property in Sri Lanka Empty Procedures for registering property in Sri Lanka

Post by puliyanam on Thu Nov 12, 2015 7:33 am

1 Seller needs to obtain certificate of non-vesting and certificate of ownership stating that the seller is the owner of the land and premises from the Municipality
Agency: Colombo Municipal Council

The seller obtains the following documents from the Municipality (from a different counter than the building and street line certificate in procedure 2):
1. Certificate of non-vesting
2. Certificate of ownership stating that the seller is the owner of the land and premises 16 days (simultaneous with Procedures 1,2 and 4) LKR 598.50
* 2 Seller needs to obtain the building and street line certificate from the Municipality
Agency: Colombo Municipal Council

The seller obtains the following document from the Municipality:
1. The building and street line certificate 14 days (simultaneous with Procedures 1,3 and 4) LKR 330
* 3 Obtain an updated survey plan of the property
Agency: Colombo Municipal Council

Obtaining a new updated plan of the land and the building is advisable to ensure that the boundaries on the ground have not changed or if the survey plan is old. 14 days (simultaneous with Procedures 1,2 and 3) About 0.1% of property value
* 4 A title search must be carried out at the relevant Land Registry
Agency: Land Registry

On receipt of the last title deed and plan from the seller, a title search has to be carried out at the relevant Land Registry. A lawyer/notary engaged by the purchaser has to recommend the title. Good title has to be established for the past 35 years. All deeds and plans have to be checked. If prior deeds are not available with the seller the notary will have to check duplicates of deeds at the Land Registry. If plans are not available, the relevant surveyors would have to be contacted and obtain duplicates of the plans. Other checks must be carried out as well by the lawyer (notary) at the local authority.

Confirmation from the lawyer (notary) should be obtained that the title to the property is clear. On confirmation that the title to the property is clear, step 2 will apply; if not title insurance is recommended, and the next step would be to obtain a policy of title Insurance (procedure 1a).

If title insurance is recommended in procedure 1 due to a defect in title, then the next step would be to obtain a Buyer's Policy of Title Insurance to cover defects. This step is optional and contingent to the result of step 1. If the policy is needed, the time necessary to obtain this title will depend on the time taken by the title insurance company to evaluate the title, make a decision to issue or not to issue the title insurance policy and the cost will depend on the premium payable.
Usually title insurance is recommended for the following reasons:
• Prior deeds and documentation not being available and further if the registers at the land registry cannot be traced for 35 years (if the books are damaged).
• If there are any discrepancies in the title deeds and plans.
• If the present owner had owned an undivided share of a larger land, and had sub-divided it without the consent of the other parties or without a Deed of Partition or Partition Plan. 4 days (simultaneous with procedures 2, 3 and 4) LKR 500
5 Transfer deed is signed in favor of the buyer
Agency: Lawyer/Notary

The following document with regard to the Selling company must be presented to the buyer’s lawyer/notary for the deed of transfer to be signed in favor of the buyer:

The documents are as follows:
1. Articles of Association of the company
2. Certificate of incorporation of the seller
3. Resolution authorizing the sale of land. If the purchase-sale is a major transaction as defined by section 185 of Companies Act No. 7 of 2007, such a transaction should require the shareholders sanction as well.
The buyer needs to pass a resolution to purchase the property.
On receipt of the above documents the deed of transfer in favor of the purchaser can be signed. Lawyer’s fees are paid by the buyer and will depend on the lawyer (usually 1% of purchase price). 2 days 1% of purchase price (Lawyer’s fees) + LKR 500 additional cost
6 Obtain the market value from the Provincial Department of Revenue
Agency: Provincial Department of Revenue, Western Province

Before or after the payment of stamp duty the instrument of transfer is forwarded to the office of the Provincial Department of Revenue of the Western Province for the purpose of obtaining the market value of the property. This measure was introduced beginning March 1, 2013 with the purpose of ensuring that stamp duties are paid based on the correct market value. The appropriate value will be provided at the discretion of the department's valuer. If the instrument is submitted after the stamp duties have already been paid the and after the examination the department determines that the amount paid is inadequate, then the balance must be settled. The department will provide the certification of "instrument with duly paid stamp duties." By ensuring that the stamp duty was paid based on the value provided by the Provincial Department of Revenue the instrument will not be recalled later on for examination of its value and will not be refused registration. 1 day LKR 250
7 Payment of stamp duty at a nominated bank
Agency: State Bank

After execution of the deed of transfer stamp duty will have to be paid within 7 days to a nominated state bank in favor of the Revenue Commissioner of the relevent Provincial Council in which the land is situated. 1 day Stamp duty payable as follows3% on the First Rs. 100 0004% on the Balance
8 Deed is sent for registration to the relevant land registry
Agency: Land Registry

After payment of stamp duty, the deed duly attested by the notary, will have to be sent for registration to the relevant Land Registry. The deed is registered and returned to the notary from the Land Registry within 3 days after receiving the Day Book. Notaries are involved with searching, preparing title report and attestation, as well as paying stamp duty. The details of the registered deeds are published in the Land Registry website (www.Rgd.gov.lk) and notice boards are available at the Land Registry office. Computerized system and greater number of staff are ensuring faster registration of deeds.
15 days LKR 100
9 Name of the buyer must be registered at the Municipality and the certificate of ownership is obtained
Agency: Colombo Municipal Council

The name of the new company will have to be registered as the new owner at the Colombo Municipal Council. An abstract of Title form should be duly filled by a Notary Public and should be submitted to the relevent Local Authority together with a Pedigree, a cerificate and a covering letter prepared by the Notary. Thereafter the name of the new owner will be regsitered in the Assessment regsiters and the Certificate of Ownership will be issued giving the present owner's name. 16 days LKR 570 for commercial properties

http://www.doingbusiness.org/data/exploreeconomies/sri-lanka/registering-property/
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Post by lanka on Thu Nov 12, 2015 11:08 am

Thanks

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Post by කිත්සිරි ද සිල්වා on Thu Nov 12, 2015 1:41 pm

Good thread and thanks.

(Recently I got a notice from Income tax department stating that I have under paid Stamp Fees for the property I purchased. The notice quote a Gazette notification and have done their calculation based on that notification.Now the question is how do we know the appropriate Gazette notification to refer prior to purchase any property and later avoid fines / threat of legal action etc while registering / paying stamp fees in future?Enlighten us if you are familiar with the issue please.Thanks in advance). Very Happy

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Post by puliyanam on Fri Nov 13, 2015 11:45 am

When you purchased the property, we need the Department of Revenue of the relevant province (if in Colombo its DOR Western Province situated in Battaramulla) assess the valuation of the property (unless you get a valuation for that purpose). This valuation certificate will tell you how much to pay as a stamp duty. You have to pay this amount to Peoples or BOC and paste the slip on Deed and get is certified by the DOR prior to sending it for registration. Otherwise you will get a love letter from IRD. Your lawyer should have advised you ...

BTW this is what I know. Please check with your lawyer too
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Post by කිත්සිරි ද සිල්වා on Fri Nov 13, 2015 11:54 am

Thanks Pully.
I did not do this last time and learnt a lesson not to burn my fingers again.
Thanks once more.
puliyanam wrote:When you purchased the property, we need the Department of Revenue of the relevant province (if in Colombo its DOR Western Province situated in Battaramulla) assess the valuation of the property (unless you get a valuation for that purpose). This valuation certificate will tell you how much to pay as a stamp duty. You have to pay this amount to Peoples or BOC and paste the slip on Deed and get is certified by the DOR prior to sending it for registration. Otherwise you will get a love letter from IRD. Your lawyer should have advised you ...

BTW this is what I know. Please check with your lawyer too

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Post by Hybrid on Fri Nov 13, 2015 3:28 pm

Thanks Puliyanam for the method and process.

During the last year I have invested in some properties to spread the risks. I went through pain to get all these documents together.

The Inland REvenue clerk doesn't know anything about property values. He just calls a few people and verifies the most recent transaction to get the valuation.

There should be a better way to get valuations!

Kith so you too are into land and property????

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Post by කිත්සිරි ද සිල්වා on Fri Nov 13, 2015 4:59 pm

Yes. Very Happy
Hybrid wrote:Thanks Puliyanam for the method and process.

During the last year I have invested in some properties to spread the risks. I went through pain to get all these documents together.

The Inland REvenue clerk doesn't know anything about property values. He just calls a few people and verifies the most recent transaction to get the valuation.

There should be a better way to get valuations!

Kith so you too are into land and property????


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Post by puliyanam on Mon Nov 16, 2015 10:32 am

Land is a very good investment in the long run. Focus on suburbs. Nothing is more limited in supply... demand is ever increasing... economics is simple
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Post by කිත්සිරි ද සිල්වා on Mon Nov 16, 2015 7:09 pm

Yes, very true.
(But if time is on your side, even pour little in to extremely underdeveloped land is worth).
puliyanam wrote:Land is a very good investment in the long run. Focus on suburbs. Nothing is more limited in supply... demand is ever increasing... economics is simple

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