How to review Sri Lanka Condominium Act Public engagement absolutely necessary

4 March 2014 06:03 am Views - 8491

By Kirthi Hewamanne
Our Condominium Act was based on the condo operations of Singapore. Singapore obtained more information with regard to setting up condominiums from Australia. Since the introduction of condominiums in Singapore, they also have various problems that have to be attended to.

Sri Lanka’s Condominium Act of March, 1973 (Apartment Ownership Law) came into effect over decades ago. Since then, Sri Lanka’s condominium sector has experienced remarkable growth and changes. There is now considerable variety in both the size and type of condominium buildings.

Today, condominiums account for half of all new homes built in the Colombo region. As this sector has expanded, so has this housing option, the size and complexity of the market and the number of people affected have also increased.

Moreover, the issues today are not only legal or technical in nature. Increasingly, they are about relationships within the condominium sector—tensions between owners, other residents, board members, condominium managers, developers, lawyers and others.

Like good neighbours, stakeholders must learn to work together to achieve common goals.

Real solutions to these tensions will require a mix of new or updated rules, better information and a broad array of tools to help solve problems. But they will also require effective management of relationships within the condominium sector itself, as well as individual condominium communities.

Everyone has a role to play. Owners and others with a stake in the condominium sector must see themselves as members of a single community who share common interests. Like good neighbours, they must learn to work together to manage their differences in order to achieve their common goals.

The commencement of Apartment Ownership Law was in March, 1973.      Subsequently there were reviews and changes added by the following amendments:     Apartment Ownership (Special Provisions) (Amendment) Act No: 27 of 2002,    Apartment Ownership (Amendment) Act No: 39 of 2003.

Need for funding
A new approach is needed to understand this new environment. In response to this, in reality it should be the  Trade, Commerce and Consumer Affairs Ministry that has to provide funding to do research to review the Act.

Implementation of this aspect of the act should be done by the Consumer Affairs Authority (CAA), which is the apex government organisation mandated to protect consumers’ interests and ensure fair market competition in Sri Lanka. It has been established under the Consumer Affairs Authority Act No.09 of 2003.  The act has laid down the legal provisions empowering the Consumer Affairs Authority to take the necessary actions to safeguard the interests of consumers.

The role of the Housing Ministry should end after the developer completes the condominium projects. At that stage, the Housing Ministry would have dealt with the legal and technical issues and all construction-related matters.

On completion of the project the developer has to hand over the affairs to the newly set up Condominium Corporation of the unit owners. After that any issues arising will have to be dealt with the Consumer Affairs Ministry, which should have an efficient team fully conversant of the condominium concept. This is how it’s done in many countries. This will avoid long delays and confusion condo owners have to face today in resolving problems. After all, at this stage, the unit owner becomes a ‘consumer’.

The Consumer Affairs Ministry should provide funding to organisations that will do research to make recommendations to review the act. It is absolutely necessary there should be a forum to listen to the condominium residents’ complaints and suggestions.

This forum must engage condominium owners and other condominium community stakeholders in a review process that will identify issues, consider options and propose and confirm an action plan for renewal. And also it’s necessary to include the experts’ opinions in the condominium concept, such as lawyers, realtors specialized in condominiums, developers and insurance companies.

Today, there are many unhappy condominium unit owners as there are long delays to get even small issues resolved and the process has become very tedious.
The findings from this engagement process should suggest that new tools are needed not only to strengthen how condominium corporations are managed and governed but also to help owners and other condominium sector participants build a stronger sense of shared responsibility for the resilience and well-being of their communities.

The entire condominium community must be invited to provide input, specially who have been complaining and reporting their problems to the Condominium Management Authority, which has become very cumbersome.



Condominiums based on rules and community values
The Condominium Act is ‘framework’ legislation, which means it sets the parameters within which individual corporations can make by-laws and rules to shape their community. It is also ‘administrative’ in the sense that compliance with the Condominium Act or the corporation’s by-laws is not ‘policed’ by the provincial or central government the same way as, say, taxation.

Instead, condominium corporations, led by elected boards of directors, govern their community members according to the framework set out in the Condominium Act. At this stage it is necessary to give some legal powers to condominium corporations.

The recommendations for a revised act should stress the wellbeing of residents, fairness, informed communities, responsiveness, strong communities, financial sustainability and effective communication.

In particular, some owners were concerned about how condominium communities manage and resolve disputes. When boards, managers or other owners fail to comply with the Condominium Act, they said, there is no reliable and cost-effective way to enforce the rules: the Condominium Act lacks “teeth”.

However, others think that most noncompliance issues, such as breaking a rule or by-law, will be more effectively managed through better information, communication or mediation, rather than through more enforcement tools. Everybody will agree that effective enforcement is necessary but stressed that relying too much on this approach can erode trust and create new and even deeper tensions within the community.

Another key issue concerns the rights and responsibilities of condominium owners. When someone buys a condominium, he not only has legal rights and responsibilities, but also joins a community. These community responsibilities go beyond paying monthly fees for upkeep of the building.

They extend to the wellbeing of the community as a whole. Another suggestion for both residents and directors must be that the owners need to more fully understand their responsibility to contribute to effective community governance, such as, by attending their condominium’s Annual General Meetings (AGMs). As a result, the residents will be more concerned about the community as a whole.


Following key issues and potential solutions will be discussed in a future article:
*Governance, dispute resolution, financial management, consumer protection, the qualifications of condominium managers and issues outside the Condominium Act.
*A very important issue is condominium manager qualifications: a higher standard of skills and training is necessary for managers and management firms. This almost certainly involves mandatory knowledge and may also require regulation of the industry by government, or some organisation acting on its behalf.


(Kirthi Hewamanne, a graduate of the University of Ceylon, Peradeniya, is an award-winning realtor with wide experience in all aspects of real estate, including specialized knowledge of the condominium concept. He held membership in the Canadian Real Estate Association, Ontario Real Estate Association, London St.
Thomas Real Estate Board Ontario and was a member of the Realtor Political Action Committee Canada. He can be contacted at kirtionebiz@gmail.com)