PROTECT YOUR PROPERTY FROM LAND SCAMS By Ajithaa Edirimane LLB (Colombo) MLB (Hamburg) Attorney-at-Law & Notary Public, Sri -Lanka

LAND SCAMS Development leads to increase in market price of properties especially in urban areas and in places with high income potential (i.e. popular tourist areas and industrial zones). This opens doors for fraudsters bent on making easy money whereever opportunities arise due to legal loopholes, lax regulatory procedures and negligence of owners and Notaries. To stop land scams…. What should the owners do? What should the Notaries do? What should the Authorities do?

Land Scams – how it is done? By Madura RanwalaMarch March 12, 2014, 9:14 pm By Madura Ranwala The 56 forged folios, 110 original deeds, old stamps dating back to 1957 and the seals used to make forged documents taken into custody by the Criminal Investigations Department sleuths on Tuesday night from a suspect’s residence. Pic courtesy police media.

The scam came to light when an engineer, who bought an acre of land in Malabe for Rs. 42 million to build a solar power project there, wanted to sell the land after her project failed. However, the potential second buyer had checked the title report on the property with the Kaduwela Municipality only to find it belonged to the Urban Development Authority, but not to the engineer from whom he wanted to buy the land. According to investigations being conducted, the fraudsters had pasted a forged folio in the register to the effect that the land belonged to the main suspect, who had sold it to the engineer.

The land grab in Malabe had the involvement of someone employed at the Land Registry; to locate the relevant Registers, tear off pages; and paste altered pages to the Registers with painstaking attention to detail that even experienced Notaries were fooled.

The other methods adopted to steal properties - 1.Arranging the execution of a Deed of Transfer with the forged signature of the actual owner. 2.Forging seals of dead Notaries or making seals under fictitious names. 3.Encroaching on properties of owners living abroad and registering a Declaration of possession based on prescriptive rights. 4.Acquiring the property of a deceased owner by filing forged court documents

What should the owners do? The Criminal Investigation Department of Sri Lanka advises – – The public to check their title deeds with the relevant Land Registry to confirm that their original folios were not torn from the Registry books. – Ask the seller for his photograph when you buy the land, a land phone number to contact, check it with the relevant local authority land record book. – use a bank draft to pay purchase price and see if the land that is to be sold is below the market price.

What should the Notaries do? 1. Be cautious when checking title and never accept the recommendation given by a clerk unless you can cross check with certified copies of Land Registry Extracts. 2. Do not be pressurized by a buyer and disregard the need to verify the title, even though the buyer happens to know the seller 3. Check the Identity Card/s of the Seller/s before the transaction and find out the background of the owner. If you have doubts enlighten your client. 4. Do not agree to a clause in a Sales Agreement whereby the Buyer is required to accept the title of the Seller regardless of any deficiencies. (This happens in condominium related transactions where the Developer insists on conditions.) 5. Request the Seller to provide an Affidavit to substantiate his/her ownership and duration of ownership. 6. Request the Seller to give an Indemnity to compensate the Buyer if he/she incurs a loss and is deprived of the property.

What should the Notaries do? 7. Arrange a photograph to be taken of the execution of the Deed of Transfer showing the parties to the transaction. 8. Obtain the thumb impression of the Seller on the Deed of Transfer. 9. Get the full names and particulars of witnesses including the residential addresses and request the Witnesses to sign Affidavits affirming that the Seller is known to them. 10. Attach the Affidavits, Indemnity and photographs to the Deed of Transfer when submitting the same for registration. 11. Maintain a record of each Sales Transaction with the request from the Buyer to attend to the sale obtained in writing, copies of all of the above documents, Land Registry Day Book Receipt, and copies of extracts of folios, etc. for future reference. 12. Register a Caveat on the property after registering the Deed of Transfer (This method does not entirely prevent subsequent registration of Deeds, as the Registries will continue to register subsequent deeds after giving notice to the Caveator)

What should the Authorities do? AUTHORITIES AND INSTITUTIONS Registrar General and Land Registrars Relevant Ministries and Municipal & Urban Development Authorities Police Courts - Land Registrars should take immediate action against errant employees as such land scams CANNOT TAKE PLACE WITHOUT ASSISTANCE FROM ERRANT EMPLOYEES within the Land Registries. - Land Registrars should keep the public informed of land scams by placing Notices at the Registries and by sending such notices to the Bar Association of Sri Lanka and to the Law Society who should take steps to notify their respective membership. - Land Registrars should assist the Police, Bar Association and courts to take immediate action against errant employees, Notaries and fraudsters. - Names of errant Notaries should be given due publicity to warn the public - Change the penal laws to enable the punishment to fit the crime and enable the police to seize the properties (both movable and immovable) of fraudsters and their immediate family to compensate the victim. - It should be the bounden duty of lawyers, judges and the Authorities to expedite land fraud cases, if the public is to have faith in the system. URGENT ACTION NEEDED

To stop land scams… Owners should be alert; Notaries should be cautious; and Authorities should be diligent and impose sanctions without fear and favour. Thieves respect property. They merely wish the property to become their property that they may more perfectly respect it. ~G.K. Chesterton

I gratefully acknowledge the information given and contribution made by Mrs. Keerthimala Gunasekera, Attorney-at-Law, Sri Lanka Ajithaa Edirimane 20 March 2014