THE OPEN UNIVERSITY OF SRI LANKA

Department of Civil Engineering

Postgraduate Diploma in Technology – Construction Management - Level 7

CEX7113 – Real Estate & Property Development

Assignment #2 (2016-2017)

Property Law and Acts

Q1.

Write short notes on followings giving examples where necessary

(a) Leasehold interest (6 Marks)

A leasehold estate is an ownership of a temporary right to hold land or property in which a lessee
or a tenant holds rights of real property by some form of title from a lessor or landlord. Although
a tenant does hold rights to real property, a leasehold estate is typically considered personal
property. Also the meaning of leasehold can be expressed as Claim or right to enjoy the
exclusive possession and use of an asset or property for a stated definite period, as created by a
written lease. A long-term lease interest is a valuable asset in its own right which can be traded
or mortgaged as a physical asset.

(b) Improvements which enhance the value of property (6 Marks)

When considering the general economy, actually examine the following economic indicators:

The following demographic factors affect the property value of a certain area:

 Size of population and its growth (rural-to-urban migration) - causing property demand
to exceed supply thereby pushing prices up.
 Age and distribution of population - working adults aged between 25 and 45 years are
more likely to buy homes.
 Income level and income growth of population - the average income level and income
growth of people in a particular area determine the purchasing power of the people in that
area.
Location and Accessibility

 Easy access to highways/infrastructure - centralized locations in urban areas with a

criss-cross of highways such as the LDP, Kesas or NKVE are higher in demand and
higher in value. There must be easy access into the highways.
 Light Rail Transit (LRT) and Mass Rapid Transit (MRT) - within 20 minutes'
walking distance to LRT/MRT stations is convenient, but not too near to them to avoid
parking congestion, noise and possibly more petty crime.
 Public transportation such as bus stops - is important in areas without LRT/MRT
stations, or to get to the LRT/MRT stations.

Demand and Supply Situation

 In property market, supply is inelastic to demand - meaning that developers are not able
to build quickly enough due to lengthy planning and approval processes while demand is
rising. On the other hand, when the properties are ready in 2 or 3 years time, demand may
have cooled causing an over-supplied situation. Due to the inability of supply to catch up
with demand, and vice-versa, property prices can be volatile.

Facilities and Amenities

 Schools, colleges and universities - excellent learning institutions are magnets to home-
hunting parents.
 Shopping centers and hypermarkets - for convenience in buying all kinds of
necessities.
 Variety and quality of businesses - a large cluster of shops catering to a wide variety of
needs and tastes makes a place attractive.

Quality of Environment

 Serene, clean and green environment - improves the quality of life and add value to the
properties.
  Developments or buildings in the neighborhood - new developments/buildings in
neighborhoods improve the appeal of the location, whereas the presence of old/obsolete
ones has the opposite effect.
 Crime rate - safety is a basic need that ranks high in the desirability of a location,
especially in affluent neighborhoods.
 Traffic condition - affects people’s stress level and health, thereby affecting the property
value in an area.
And also impact to the value of property by following factors

Property Features

Money Supply and Cost of Borrowing

Cost of Building Materials and Labour

Number of Investors and Speculators in Market

Legal and Planning Control

Emerging Trends

Also impact for the value of property

 Gross Domestic Product (GDP) –

 Foreign Direct Investment (FDI)
 Employment rate
 Business Confidence
 Inflation
 Consumer Sentiment

c). Accession (6 Marks)

Whatever that is built or cultivated becomes part of the land. This becomes relevant in the
context of the land owner acquiring ownership of such building and plantation.
 Necessary Improvement - Improvements necessary to preserve the property or save it
from being lost to the owner ; improver is entitled for compensation from the owner.
  Useful Improvement – Improvements which would enhance the value of the property ;
improver is entitled for compensation from the owner.
 Ornamental Improvement – Improvements which do not fall within the above categories.
A malafide improver is not entitled for compensation.

The ownership of a thing, whether it be real or personal, movable or immovable, carries with it
the right to all that the thing produces, and to all that becomes united to it, either naturally or
artificially; this is called the right of accession.

d). Prescription (7 Marks)

If a person is in possession of a land for a period of ten years or more he is entitled to acquire
prescriptive title to the land even against the true owner who has “paper” title. The period of
possession is thirty years in case of state land.

The Prescription Ordinance No. 22 of 1871 is one of the oldest pieces of legislation
setting out the time periods for instituting actions in courts of law.
Any action filed beyond the time period set out in the Ordinance is considered as time barred and
cannot be maintained, and thus special attention should always be drawn to the provisions of this
Ordinance. This report will only analyse the provisions of the Prescription Ordinance which are
relevant to land and property rights.

The term of prescription for lands and other immovable property is ten years. According
to Section 3 of the Ordinance, proof of the undisturbed and uninterrupted possession by a
defendant in any action, or by those under whom he claims, of lands or immovable
property by a title adverse to or independent of that of the claimant or plaintiff for ten years
previous to the bringing of such action shall entitle the defendant to a decree in his
favors with costs.
The Section also provides that a plaintiff can bring an action or a party who intervenes in
an action can obtain a decree in his favour upon proving uninterrupted adverse possession for a
period of ten years, as aforesaid.
 In practice, however, prescriptive title to property is commonly used by defendants. It is
uncommon to see cases where a plaintiff claims prescriptive title under this.
Q2.
Land Acquisition Act No. 9 of 1950 and the subsequent amendments to it facilitate acquisition of
privately owned land for public purposed. Discuss:
a. the process to be followed in acquiring land for public purposes (12 Marks)

The Act aims to maintain procedural due process in carrying out land acquisitions, and to that
end it spells out the specific procedure to be followed in the State acquiring private lands. Part I
of the Act provides for preliminary investigation and declaration of the intended acquisition.
Section 2 of the Act empowers the Minister of Land to decide whether any property is required
for public purposes and, if so, requires the Minister to direct acquiring officers of the respective
areas or districts to cause the publication of notices mentioned in Section 2(2) of the Act.
Thereafter, the acquiring officer or authorized officer can survey the land, demarcate and set out
boundaries, place marks and cutting trenches and do all other necessary work to ascertain
whether the land is suitable for the public purpose. Once the Minister considers that particular
land or servitude over particular land is suitable for a public purpose, the acquiring officer of the
district shall cause the notice of pending acquisition to be exhibited in a conspicuous part of the
land or near the land. Section 4 ensures the right of landowners to be heard and provides them
the opportunity to object to the acquisition or present their grievances. It provides that
landowners should object to the acquisition within the period specified in the notice exhibited by
the acquiring officer. Once an objection is made, the Secretary or Additional Secretary of the
Ministry of Land or an appointed officer would consider the objection and the person objecting
is ensured of his right of being heard. The Secretary makes recommendations to the Minister on
the objections of the owners. Thereafter, the Minister himself considers the objections and
arrives at a decision on whether to acquire the land or not. The Act prohibits an owner from
alienating a land within 12 months of the exhibition of notices under Section 2 or 4. Once the
aforesaid initial steps are concluded, the Minister may make a declaration that the particular land
or servitude is required for public purposes and such a declaration should be published in the
Gazette and exhibited on or near the land. Thereafter, any person interested in the land to be
acquired is given the opportunity to notify the acquiring officer of the nature of his interest in the
land and the particulars of his claim for compensation, including the amount of compensation.
b. the suggested method for awarding compensation (13 Marks)

Part II of the Act provides for inquiries into claims and reference to courts and the award
of compensations. An acquiring officer holds an inquiry into, inter alia, the market value of the
land, claims for compensation and the interest of the parties claiming compensation, and makes a
determination as to the persons entitled to compensation, the nature of their interest and the
amount of compensation. A claimant whose claim has been disallowed either wholly or partially
can apply within 14 days of the decision to the acquiring officer to refer the matter to the District
Court.
Part III of the Act establishes a Board of Review to which a claimant can appeal on the grounds
that the compensation determined under Section 17 is insufficient. Such an appeal must be
submitted within 21 days of the date on which the order of the acquiring officer was received by
the claimant. Where the claimant is not satisfied with the decision of the Board of Review, he
may appeal to the Court of Appeal on a question of law within 21 days of the decision of the
Board, the Court of Appeal held that any party to appeal to the Board of Review is entitled to
appeal to the Court of Appeal within 21 days of the decision of the Board and that such an appeal
can be made only on questions of law. The time allowed for referring a claim to the District
Court or the Court of Appeal, or an appeal to the Board of Review, is considerably less when
compared with the time allowed to appeal against orders and judgments of the District Courts. It
could be said that the imposition of time restrictions is to facilitate the speedy disposal of the
appeal and timely completion of the process of acquisition. The practical experience is that in
cases of large-scale development projects and road expansion projects, the appeal process
delays the completion of the entire project. Upon the final determination of the compensation,
this would be paid in the manner set out in Part IV of the Act.
Part VI of the Act deals with the assessment of compensation payable to owners of lands
and servitudes. Compensation is calculated based on the market value of the land or servitude
and is proportionate to the claimant’s interest in the land. No additional compensation is allowed
in consideration of the compulsory nature of the acquisition. However, the claimant is entitled to
compensation for any damages sustained because of the severance of the land from his other and,
for damages sustained because of the acquisition of the land injuriously affecting his adjoining
land or immovable property thereon, for loss of earnings from any business carried out on the
land and for any reasonable expenses of effecting any change of residence caused by the
 acquisition of the land. The basic principle on which compensation is assessed is the market
value of the land or servitude which, prima facie, is just and fair. This is also the case for the
payment of compensation for damages suffered because of the acquisition. However, the
important factor which defeats the spirit of this section is the date on which compensation is
calculated. Sections 45 and 46 expressly provide that the relevant date in calculating the amount
of compensation is the date of publication of the notice in the Gazette under Section 7. In most
cases, the actual acquisition or taking of possession occurs years after publishing the Section 7
notice at which time the value of the property has considerably increased, raising serious
concerns about the adequacy of compensation.
Town Planning
Q3.
Several eminent persons have been commissioned under the colonial rule in the past century to draw up
plans for the development of the city of Colombo. Some of the concepts proposed under these plans have
not been implemented for several reasons and are still valid. Discuss the important concepts behind two
such plans proposed. (25 Marks)

Prof. Patrick Geddes and Prof. Clifford Holiday are most prominent urban designers and their
concept reference to the town planning can be mentioned as follows
Town planning means the art and science of ordering the use of land and sitting of buildings and
communication routes so as to secure the maximum practicable degree of economy,
convenience, and beauty. An attempt to formulate the principles thatshould guides us in creating
a civilized physical background for human life whose main impetuses thus foreseeing and
guiding change.
Also can be mentioned as town planning is an art of shaping and guiding the physical growth of
the town creating buildings and environments to meet the various needs such as social, cultural,
economic and recreational etc. and to provide healthy conditions for both rich and poor to live, to
work, and to play or relax, thus bringing about the social and economic well-being for the
majority of mankind.
Physical, social and economic planning of an urban environment, it encompasses many different
disciplines and brings them all under a single umbrella. The simplest definition of urban
planning is that it is the organization of all elements of a town/other urban environment. Physical
Ecological
If there was not town planning, Uneven & Chaotic development, contrasting urban scenario,
Mixed Land use, Industries springing up in residential zones, Congested Transportation
Network, overflowing traffic than expected contrasting urban scenario.
Aims and objectives of town planning is
 To create and, social, economic, promote healthy cultural and
 To preserve the conditions and recreational individuality of the environments for
amenities etc. To preserve the environment
 To make right use amenities - open aesthetics in the of the land for the spaces, parks,
design of all elements right purpose by gardens & of town or city plan, zoning
playgrounds, town
 To ensure orderly halls stadiums, development community centers,•
 To avoid cinema houses, and encroachment of theatres one zone over the other health
convenience beauty
Planning process identification and defining the objectives, definition of problem
To regulate growth , to nullify the bad effects of past data collection growth,
To improve the transportation facilities,
To Studies & Surveys optimize the resources utilization,
To balance population and economic activities,
To promote social Identification of trend and direction of growth, integration among different
categories,
To promote a Traffic survey, Study on demography, Climate, convenient comfortable, beautiful
and healthy Resources and other potentials environment.
In the form of study Demographic projection & forecasting data analysis, maps, graphs,
charts, forecasting based on migration, employment, etc and long term & industrialization and
urbanization short term objectives are identified Preparation of development plans,
Fixing the priorities, formulation of zones, alteration to the designs, existing zoning
regulations, widening of Identification of priorities based on roads etc the need, importance and
urgency Implementation by the suitable authorities , within implementation time & must satisfy
all the review, evaluation and feedback required obligations Monitoring by periodical
inspections, feedbacks & review reports.
Plans should be
 Structural plan
Comprehensive plan
Developmental plan
A structure plan is one the comprehensive that singles out for plan seeks to combine, means a
plan for attention of certain in one document the development or aspect of the prescriptions for
all re-development or environment usually aspects of city improvement of the land-uses, the
main development. Area within the movement systems and, It includes an analysis jurisdiction of
a location of critical of the city’s economy, planning authority facilities and buildings. its
demographic, It includes a characteristics, and the regional plan, Such a plan aims to history of
its spatial master plan, influence certain key development as a vocational decisions detailed
preface to plan for how development plan while recognizing that the city should evolve there are
many other over number of years of period and a new town things that can’t and development
plan perhaps should not be decided at the outset.
Q4.

Explain the following terms in the context of “UDA Planning and Building Regulations”.
a. Preliminary planning clearance (5 Marks)

Preliminary planning clearance means the instruction to the applicants to fulfill requirements given by
the City Planning division of Colombo Municipal Council.
Following requirements should be fulfilled by the applicant.
1. The Preliminary Planning Clearance shall not constitute a permit nor shall it entitle the applicant or any
person to commence or carry out any development activity whatsoever.
2. Application should be duly filled and signed by owner and qualified person (Chartered Architect)
3. Two copies of proposed development in sketch form and a Survey Plan in a scale of 1: 1000 or 1 chain
to an inch should be submitted along with application.
4. Sketch Plan showing the nearest junction/s roads with existing buildings and their heights to be
attached with the application.
5. Following clearances should be submitted from the relevant Authorities along with The PPC
application
.
1. A letter confirming the correct Assessment Number with site extent including boundaries and
ownership from Municipal Assessor’s Department, CMC within a month of the date of
application.
ii. A clearance from Public Health Department of CMC (If necessary)
iii. A clearance from Urban Development Authority (UDA) (if already obtained)
6. If the Planning Committee requests any additional requirement it is the responsibility of the applicant
to forward the same in Duplicate.
7. Survey Plan to be submitted with Street Line /Building line or any other reservation marked by City
Planning Division.
8. It is the duty of the designer to check whether the block of land is affected by any street line,
building line or any other reservation. It is also important to check whether the site is affected by any
private/public water line, sewer line, rain water drain, drainage paths, electricity line or telephone cable
etc.
9. City of Colombo is divided into various Zones such as Special Primary Residential,
Primary Residential, Special Mixed Residential, Sea Front, Mixed Development, Commercial,
Concentrated Development, Port Related Activities etc. and the types of development that can be
permitted in each Zone is classified in the City of Colombo
Development Plan (Amendment) 2008. Thus it is the duty of the designer to find out whether the
proposed development is compatible with the Zoning of the area.
10. The proposed development should be architecturally compatible and matched with the urban fabric
11. Preliminary Planning Clearance will be granted to the applicant without prejudice to the right of the
authority to impose any additional requirement when detailed proposal plan is submitted for approval.
12. The applicant will be informed by a letter upon approval of the outline proposal, with or without
conditions imposed.
The applicant shall then make detailed formal proposal within 12 months. During that time, the
applicant will liaise with the various other relevant Agencies/Departments such as Water & Drainage
Division of Maligakanda, Fire Services Department, Solid Waste Management Division of
CMC, National Water Supply & Drainage Board, Central Environmental Authority,
Coast Conservation Department etc., on their requirements. The Provisional
Permission will lapse by the end of the 12 months period.
13. The receipt of the processing fee should be shown to the receiving counter. Until
Then, the processing of the application will not be started.
14.If any of the information provided by the owner, designer or the applicant is
found to be false by the Colombo Municipal Council, the application will be rejected /the
Preliminary Planning Clearance to the development will be cancelled.
15. The Colombo Municipal Council is not responsible for any payment made by the
Applicant/owner other than the official payment made to the Council for which a receipt is issued
b. Building permit (5 Marks)
c.
A building permit is formal permission to begin the construction, demolition, addition or
renovation on property. As part of the building permit process, Colombo Building staff must
review plans to ensure they comply with the Building Code, local Zoning Bylaws, and other
Applicable Law.
d. Certificate of conformity (5 Marks)

Obtaining of the certificate of conformity

Some the conditions and requirements to be followed by the applicant can be mentioned as
follows
The Authority may grant a certificate of conformity for the occupation of a building or part
thereof or any other development activities when
 Every certificate and report in respect of the building or part thereof or any other development activity have
been submitted to the Authority pursuant to the provisions of regulation 13;
 All the requirements shown on the plan or plans and all the written directions given by the Authority to the
qualified person or persons, who prepared the plan or the building or part thereof or the building works
under paragraph

 Of regulation 16, have been complied with and a certificates from the qualified person is forwarded to that
effect; and (c) all the fees payable under these Regulations have been paid.

1. While the period of validity of an approved building plan is One Year,

applications may be submitted for getting extended the said period by another
Two Years.
2. While the certificate of conformity shall be applied for within a period of Three
Years (03), all construction activities should have been completed in accordance
with the Plan.
3. While the application shall be forwarded for the certificate of conformity through
an application to be issued by this institution, prescribed charges shall be paid.
4. If the relevant officers are satisfied with the constructions having examined the
buildings, the certificate of conformity will be issued within a period of 02 to 03
weeks.

e. Standard light plane (5 Marks)

Generally, factors that affect the effectiveness of illumination are quantity and quality of light
amount of flicker, amount of glare, contrast and shadows. Each factor must be adjusted
differently to optimize illumination in emergency, safety, operations, and security situations, for
instance.
Lighting Standards also serve to address the plethora of other concerns associated with
the design, placement, installation, and minimum energy requirements and efficient allocation of
illumination in different locations with different purposes, as well as the efficiency, durability,
cost, and maintainability

f. Floor Area Ratio (5 Marks)

The floor area ratio (FAR) is the relationship between the total amount of usable floor area that a
building has, or has been permitted for the building, and the total area of the lot on which the
building stands. This ratio is determined by dividing the total, or gross, floor area of the building
by the gross area of the lot.
The Flow Area Ratio accounts for the entire floor area of a building are not simply the
building's footprint. Buildings with varying numbers of stories may have the same FAR value.
For example, the FAR of a 1,000-square-foot building with one story situated on a 4,000-square-
foot lot would be 0.25. A two-story building on the same lot, where each floor was 500 square
feet, would have the same FAR value.

The floor area ratio of a site is the extent of that site to the total floor area (including upper
floors) of buildings in that site.
Total plan area of the plot =A
Total floor area of buildings = (Agf + A1f + A2f …)
Floor Area Ratio = A : (Agf + A1f + A2f …)
Maximum Ratio Allowed = 1 : 2.75
 OPEN UNIVERSITY OF SRI LANKA

REAL ESTATE AND PROPERTY DEVELOPMENT

CEX - 7113

POST GRADUATE PROGRAMME

in Construction Management
Level - 7

RRGS BANDARA
11544095