ECONOMYNEXT – The market for apartments in Sri Lanka is opening up with more developers coming in, giving greater choice, but buyers should take care to check title deeds and financial strength of property companies, an industry official warned.
The consumer mind-set is changing. Sri Lankan customers are realizing the value of apartments,” said Brahmanage Premalal of Prime Lands, a property developer.
“Their apprehensions have gone and the market segment has opened up with many opportunities for investors and developers. A lot of developers are coming in. It’s good for customers who have more choice.”
But he warned that there were risks in buying apartments and that buyers should take care to minimize these risks.
“Buyers need to be vigilant because they’ll be spending their lifetime savings,” Premalal ttold the annual real estate conference held by Lamudi, an online real estate platform.
Among the risks were non-completion, not meeting delivery deadlines or quality standards, and not getting clear title which may lead to litigation, he said.
Sometimes property companies may go bankrupt since many build properties relying on the cash flow provided from pre-sales.
“Most apartments are sold on presale basis so you get the property only in 2-3 years,” Premalal said.
“You must know your developer, do thorough background checks on them and see what previous projects they have done.”
He also warned that buyers must check title deeds since some properties going around are not good quality deeds.
“Sometimes you might get doctored or altered title,” Premalal said. “You must go beyond the land registry search and check extracts. See if the developer owns the property.
“There can be disputes. The developer may not have the financial capability to buy the land as building property involves bigger capital. The developer may be depending on your cash flow from presales and might get stuck halfway.” (Colombo/October 26 2015)