What Can be Done to Reduce Land Forgery in Sri Lanka?

COLOMBO (IDN) — As land forgery continues unabated in Sri Lanka, something has to be done to prevent the prevalent rate of land fraud, with legal owners and innocent buyers unknowingly falling into these traps.

According to news sources, the Registrar General N C Withanage had said, as far back as March 2019, that 40 to 50 per cent of land deeds in Sri Lanka are forged documents.

But unfortunately, things continue to go from bad to worse.

Many Sri Lankan expatriates are thinking of investing in homes while retiring in their home country. But is it worth taking this risk of converting one’s hard-earned life savings into real estate in a country with this degree of forgery?

I understand their patriotic attraction to a country in which they grew up, and their dreams of spending their golden years here.

But currently, Sri Lanka faces a severe foreign exchange crisis and is desperately seeking expatriate investors. The island nation needs foreign exchange now more than ever. But regrettably, the government and the judiciary have not taken enough steps to protect home-ownership, particularly at a time when it should be of an utmost priority to do so.

 How are these illegal land fraud activities occurring in Sri Lanka?

These fraudulent activities are mostly done by executing a Declaration deed and claiming squatters’ rights, mostly by renters and other occupants of homes, if they have lived there for over ten years.

No one in their proper senses will buy a land with a Declaration deed, so the defrauders sell or gift it to a known party at which point the declaration deed is now a regular deed registered at the land registry.

“Squatters rights” is an antiquated law that worked at a time of pioneers when lands were still being discovered. At the present time, where every inch of land is already known and plotted, how can one accept this law? I feel this enables one to use an ancient law to swindle present home owners.

The ordeal that Sri Lankan homeowners have to undergo is not only legal expenses, but also the length of time taken to conclude these cases. One person told me of a family where the parents were fighting to protect their land for over 20 years, who are now deceased, and the nightmare has been passed on to their children.

My friend from New Jersey, USA came into ownership of her mother’s property after her mother passed away. The mother had a boarder who lived there. He then rented the full house, eventually stopped paying rent and declared himself owner.

She had a hard time fighting this case and lost it at the district court level. She went to appeals court with another set of lawyers and eventually got her house back. There are plenty of stories of how tenants have declared themselves owners.

A relative had a “dowry house”—given as a dowry during marriage—in Colombo, to which her mother had a life-long interest. She stayed there whenever she visited from London. After her mother’s death, she sent notice of eviction to her sibling who accepted in court to leave within three months. But he was led astray by a lawyer-uncle who took it to appeals court.

Once the case started, the uncle offered a lower price to buy it. Once a property is in dispute, others offer to buy it at very low rates. Many accept the deal as they do not have the funds, the time or the energy. She luckily stood firm and won the case in the appeals court and once again in the supreme court.

Forgery

The fraudster gets a copy of a deed and transfers it to themselves by forging their name and sometimes using a name of a deceased lawyer and gets the re-forged deed registered at the land registry. Then they sell the land to unsuspecting buyers.

According to one newspaper report, the fraudsters have infiltrated even the inner sanctum of the land registry to destroy and deface some vital documents protecting the rights of landowners

Another ploy is when fraudsters take the identity of the original owner with a forged ID card and sells the land while the owners are not even aware of it.

A friend from London, who went to get some paper work done at the Colombo land registry, recounted the story of a clerk who helped her to rush it, knowing that she was flying out late that night. Sometime later when she came back to Sri Lanka, she found four homes being built on her property.

When I met her, she said that she had to take all these parties to court and that she was now getting tired of flying between London and Colombo and seeing the case delayed and postponed each time.

Then there are cases where people just move into your home and take it over. A couple from New York owned a home in a prestigious area of Colombo. The husband was here repairing their home and went away on a short trip, out of Colombo.

When he came back, he was aghast to see so many males in his home claiming ownership. Fearing for his safety, he quickly left the premises and moved into a hotel. Luckily, they had friends who had political connections and got their home back within a few weeks.

A neighbour told me a story of how her friend jumped the fence and took the house back when the unauthorized occupants were away and held onto the house by putting in security personal who prevented the fraudsters from entering. Eventually, he won the case at the courts as well.

There are also cases of home owners selling the same property to multiple buyers. This is possible because of the time delay the land registry takes to register the new ownership. An article in Sunday Times in Sri Lanka exposed a case where a mother and daughter sold the same land to 8 different buyers.

Knowing how land frauds occur and understanding property laws, may help you protect your property.

Prescriptive Rights

Anyone claiming prescriptive rights must show continuous uninterrupted and undisturbed stay in the premises for a minimum of ten years with adverse possession, which puts the real owner in notice of the possession. But it cannot be a secret possession with secret intentions. Long occupancy alone does not validate prescriptive rights.

What can the government and the judiciary do to protect home ownership.

Perhaps one of the most important rules is to make registering of all homes mandatory. Right now, it is not mandatory to register your property. The registry of land should be held accountable for their misdeeds.

1       There is no required stamp duty for declaration deeds. Some use this to avoid stamp duty even in legal transactions. if anyone is declaring themselves owners then, they should be made to get an official valuation done of the property by a licensed valuer and stamp duty paid at the same rate as property sale or gift. Then, the temptation to declare and defraud will be minimal. Think of all the money the government can collect if they start collecting stamp duty on all the Declaration deeds out there.

2       Computerization of all deeds is a must and all history of ownerships saved as well. Any discrepancies can be sorted out by a panel to discuss and come to a solution on questionable lands.

3       There should be a two-way system of identifying ownership at the land registry. By the registered deed number being connected to the assessment address.

4       Notaries should be held responsible with penalties and licenses taken away for the falsified declaration deeds they write.

5       There should be title search companies like those in other countries. This will enable buyers to buy properties without worrying about fraudulent transactions. The title search companies should carry liability insurance and be held responsible to give accurate information.

6       All land fraudulent case should be analyzed by an arbitrator to evaluate the case and advise both parties on the validity of their case, which I feel will bring about quicker solutions to many than going through the ordeal of a full court process which takes years. In many countries lawyers and retired judges volunteer their time to arbitrate. [IDN-InDepthNews — 10 March 2022]

​The writer is a lawyer specializing in housing and property laws.

Photo: Land fraud in Sri Lanka. Source: Land Portal

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