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by the Consumer watch

Condominium residents beware

Condominium living has captured the imaginations of Colombo's homeowners, and simple supply and demand economics has led to the sprouting of several high-rise buildings offering condominium home ownership, along many of the main thoroughfares of the city as well as in some residential areas.

The developers use colourful advertisements to extol the fancy facilities, luxury fixtures and fittings as well as the vistas around these buildings in order to make them especially appealing to those accustomed to up-market lifestyles in foreign countries.

Convenience, security, and easy management, coupled with the lockup-and-leave concept associated with condominium living has a special appeal to those who travel and are frequently away from home, as well as to those expatriates who return to Sri Lanka on business or for over-wintering.

However, condominium owners have begun to experience several problems associated with collective ownership of living space, a concept which Sri Lankans are not accustomed to. In addition, problems with developers who seek to exploit unsuspecting home owners with come hither offers that are not lived up to, have become commonplace.

Some of the problems brought to our attention by condominium owners are discussed below for consumers to be aware of.

In every condominium project, in addition to the actual residential units, there are the common areas which collectively belong to all the homeowners in the building. Most Sri Lankan purchasers of condominiums generally do not look into the deeds carefully at the time of purchase in order to ensure that ownership of these common areas is also clearly specified in them, to ensure lack of ambiguity.

Their interests tend to remain focused on their own units, with little attention being given to these common areas. Only later do they find out to their dismay that the common areas do not conform to the promises made by the developer.

For example, one condominium developer showed building plans to prospective buyers, which included a common area extending over an entire floor, with a walking trail and lay-outs with trees and benches to be used by residents for relaxation. It was explained to buyers that the Urban Development Authority had in fact insisted that this floor be left as a podium. A model of the building which was shown to prospective buyers had this area clearly set out with trees and trail etc., and it was one of the special attractions in the building.

However, after the owners had made settlement and moved into their units, the developer attempted to build extra residential units in this common area. These units were in excess of the number of units approved for construction by the UDA.

The developer insisted that this floor as well as some parking spaces belonged to the developer's company. A court injunction had to be resorted to by the Condominium Management Corporation (CMC) to halt the developers action. Headaches for the new owners, which were never bargained for!

Furthermore, the developer had gone to the extent of having a deed drawn up giving themselves ownership, and every time the CMC attempted to make even a maintenance repair, or even have a meeting in the area, court action was threatened.

In another condominium, the developer has attempted to retain the original office space used by them during construction, as a permanent office for themselves. Again, the matter is a cause of much hassle for the owners.

In yet another condominium, a roof-top common area which had been marketed at the time of purchase by owners as being for use by residents only, was later being considered for conversion into a beer garden by the developer, AFTER completion of the project, and after some owners had in fact moved in. Apart from the problem that this common area was marketed under a false premise, the new situation would introduce a serious security problem, as non-residents would now have access to areas which were originally meant for residents only.

Another common problem is associated with Garage Spaces. According to the Condominium Act, each unit in a condominium must be assigned ONE garage space or slot. However, a National Consumer Watch contributor writes that a certain condominium building had been built with more units than there was space in the garage at one car per unit.

This has led to much hand-wringing and exasperation on the part of the owners who now have to resort to a first-come first served basis to resolve the parking problem. However, a little caution before purchasing would have at least made the buyers know exactly what they were in for.

In another case, the garage had more space than was needed to conform to the 1 car/unit requirement, and the developer made private deals to sell second spaces from this common area to unit owners who wished to park 2 cars. Not only did this violate the Condominium Act, but also this transaction has left in its wake unnecessary problems within the community of homeowners.

According to the Condominium Act, all the common areas in a condominium are clearly the property of all the unit owners combined, and no outside person or company can own these areas unless agreed to by the Condominium Management Corporation as a whole. Developers can cause unnecessary trouble on this issue, and unless prospective homeowners are cautious enough to examine these details before making the initial down payments and signing of contracts, they can be made to go through all sorts of legal contortions to gain control of the building.

No doubt as Sri Lanka's condominium communities grow, there would be greater consumer understanding of what the aspects are that should be examined carefully in a condominium plan before purchase of these units in order to be ensure conflict-free and peaceful living.

With greater wisdom on the part of consumers, the chances of developers exploiting the ignorance of prospective condominium buyers would correspondingly decrease. Greater interest in these various aspects of condominium living has resulted in some seminars on these subjects being organized as information resources for condominium owners.

One niche that needs to be filled is that of condominium management companies. At completion of a Condominium building project, the current practice is for the Developer to manage the property for one year after which management is vested in a Management Company formed by all the owners.

The owners can then decide to manage it themselves, continue the management by the developer, or hand over the management to a third company for convenience. Unfortunately, as yet there appears to be only one outside company that takes on this work, so condominium owners do not have a competitive market from which to make their choice.

The National Consumer Watch of Sri Lanka therefore advises prospective buyers of condominiums to: Read the Condominium Authority Act carefully and be clear about your responsibilities, and your developers' responsibilities.

Remember to have all the common areas clearly spelt out in your deeds at the time of transfer of the property.

Understand clearly that you should not attempt to make private deals with the developer for things like additional parking spots etc., as these are specified by the UDA and the developer cannot legally make such deals.

Please send your questions or comments to: National Consumer Watch of Sri Lanka, 143 A, Vajira Road, Colombo 03.

www.ceylincoproperties.com

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