Due Diligence Checklist Before Buying Property in Sri Lanka

Buying property in Sri Lanka should involve more than viewing the property, agreeing on a price and signing an agreement.

Before making a significant payment, buyers should verify the legal ownership, title history, survey boundaries, approvals, access, ownership eligibility and payment structure.

For foreign buyers, due diligence is especially important because Sri Lankan law places restrictions on direct ownership of ordinary land.

This checklist covers the key areas buyers should review before proceeding.

1. Confirm Who Owns the Property

Start by confirming that the person or company selling the property has the legal right to do so.

Ask for:

• Current deed
• Previous deeds forming the title history
• Seller identification
• Company documents if the seller is a company
• Power of attorney if someone is acting for the owner

Do not rely only on the seller’s name appearing on a document.

Your lawyer should confirm the ownership through the relevant legal records.

2. Investigate the Title History

Title investigation is one of the most important parts of property due diligence.

Sri Lanka’s Notaries Ordinance requires relevant Land Registry searches before certain deeds affecting immovable property are prepared. These searches help establish the state of title and identify previously registered deeds or interests affecting the property. Asia Pacific Energy Policy

Your lawyer should check for matters such as:

• Previous transfers
• Mortgages
• Leases
• Court orders
• Co-ownership
• Other registered interests
• Inconsistencies in the title history

A deed alone should not be treated as sufficient proof that the title is clear.

3. Check the Survey Plan and Boundaries

The survey plan should match the land described in the deed.

Check:

• Land extent
• Boundaries
• Access road
• Lot number
• Neighbouring properties
• Any rights of way
• Physical boundary markers

Where necessary, consider having a licensed surveyor confirm the boundaries on site.

This can be particularly important for land, villas and older residential properties.

4. Confirm Road Access

A property can have good title but still have poor or disputed access.

Confirm:

• Whether there is legal access from a public road
• Whether the access road is private
• Whether a right of way exists
• Whether the road shown on documents matches the physical road
• Whether vehicles can realistically access the property

Do not assume that a path currently being used automatically gives the property a permanent legal right of access.

5. Check for Mortgages and Other Encumbrances

Ask your lawyer to establish whether the property is affected by:

• Bank mortgages
• Leases
• Court orders
• Restrictions
• Claims by third parties
• Other registered interests

If a mortgage exists, the sale should clearly explain how it will be discharged before or during transfer.

6. Confirm Foreign Ownership Eligibility

Foreign buyers should establish early whether they are legally eligible to acquire the proposed property.

The Land (Restrictions on Alienation) Act No. 38 of 2014 generally restricts transfers of land title to foreign individuals, foreign companies and certain Sri Lankan companies with significant foreign shareholding, subject to statutory exemptions. PPP Monitor

Qualifying condominium property is treated differently under the legislation.

If you are considering ordinary land, read our Can Foreigners Buy Land in Sri Lanka? guide.

If you are considering an apartment, read Can Foreigners Buy Apartments in Sri Lanka?

Do not pay a substantial deposit before confirming ownership eligibility.

7. Verify Planning and Building Approvals

For a house, villa, apartment or development property, ask for the relevant approvals.

Depending on the property, these may include:

• Approved building plans
• Planning approval
• Building permit
• Certificate of Conformity where applicable
• Local authority approvals
• Coastal approvals
• Environmental approvals
• Utility approvals

Do not assume that an existing building automatically has every required approval.

This is particularly important if the property has been extended or altered after the original construction.

8. Check Condominium Documents for Apartments

Apartment buyers should review more than the individual unit.

Sri Lanka’s Apartment Ownership Law provides the legal framework for condominium parcels and common property. PPP Monitor

Depending on the project stage, buyers should ask for:

• Condominium plan
• Provisional or final condominium documentation
• CMA related documents
• Unit boundaries
• Parking allocation
• Common element details
• Management Corporation information
• Service charge information
• Final title status

Read our What Is CMA Clearance in Sri Lanka? guide for more detail.

9. Review the Sale Agreement Carefully

The agreement should clearly state what you are buying and what each party is required to do.

Review:

• Purchase price
• Deposit
• Payment schedule
• Completion date
• Property description
• Included fixtures
• Parking rights
• Delay clauses
• Refund rights
• Conditions before completion
• Title transfer
• Termination rights

Sri Lanka’s Prevention of Frauds Ordinance sets formal requirements for transactions affecting immovable property, including written and properly attested instruments for relevant property transactions. Aipazz

Have the agreement reviewed before signing or making a significant non-refundable payment.

10. Confirm the Correct Payment Route

Foreign buyers should speak with a licensed Sri Lankan bank before transferring funds.

Ask:

• Which account should receive the payment?
• Should funds come through an investment or foreign currency account?
• What documentation is required?
• What proof of inward remittance should be retained?

Keep:

• SWIFT confirmations
• Bank statements
• Receipts
• Payment schedules
• Agreements
• Currency conversion records

A clear banking trail can be important later, particularly if the property is sold and funds need to be transferred out of Sri Lanka.

11. Check Utilities and Infrastructure

Before buying, confirm the practical condition of the property.

Check:

• Electricity
• Water supply
• Internet availability
• Drainage
• Sewage or septic systems
• Waste collection
• Road quality
• Parking

For land, also investigate how utilities can be connected and what those connections may cost.

12. Check Flooding, Drainage and Site Conditions

The physical condition of the site is just as important as the legal paperwork.

Consider:

• Flood history
• Drainage
• Slope
• Soil conditions
• Coastal exposure
• Erosion
• Retaining walls
• Nearby waterways
• Access during heavy rain

For coastal and hillside properties, professional technical advice may be worthwhile before purchase.

13. Understand Ongoing Costs

Before buying, estimate the total annual cost of ownership.

This may include:

• Service charges
• Insurance
• Property management
• Repairs
• Gardening
• Pool maintenance
• Utilities
• Security
• Taxes
• Staff
• Rental management fees

For apartments, ask how service charges are calculated and whether major future repairs are expected.

14. Check Rental and Commercial Use

If you plan to rent the property, operate a guesthouse or use it commercially, confirm that the intended use is permitted.

Check:

• Local authority requirements
• Tourism registration
• Building use
• Management rules
• Apartment restrictions
• Tax obligations

Do not assume that because nearby properties are being rented, your property can automatically be operated in the same way.

15. Use an Independent Property Lawyer

A qualified and independent property lawyer should coordinate the legal due diligence.

Your lawyer should be able to explain:

• What documents were reviewed
• Whether title is satisfactory
• What risks were identified
• What remains outstanding
• Whether the proposed ownership structure is legal
• What should happen before you pay or complete

Read our How to Choose a Property Lawyer in Sri Lanka guide if you are unsure how to select one.

Quick Due Diligence Checklist

Before purchasing, confirm:

• Seller ownership
• Title history
• Land Registry search
• Survey boundaries
• Legal road access
• Mortgages and encumbrances
• Foreign ownership eligibility
• Planning approvals
• Building approvals
• Condominium documents where applicable
• Sale agreement
• Banking route
• Utilities
• Drainage and flooding
• Ongoing costs
• Rental or commercial permissions
• Independent legal review

If any important item remains unclear, resolve it before committing further funds.

Common Mistakes to Avoid

Paying before due diligence is complete

A small reservation payment can still become difficult to recover.

Checking only the current deed

Title history and Land Registry records also matter.

Ignoring physical access

Legal ownership does not automatically guarantee practical road access.

Assuming approvals exist

Ask for copies and verify them.

Relying only on the seller’s lawyer

An independent lawyer should protect the buyer’s interests.

For a broader overview, read our Common Mistakes Foreign Buyers Make in Sri Lanka guide.

Final Thoughts

Good property due diligence is about answering one basic question:

Do the legal documents, physical property and proposed transaction match what you believe you are buying?

A buyer should understand the title, boundaries, approvals, access, ownership eligibility, payment process and ongoing obligations before committing substantial funds.

Taking additional time before purchase is generally far easier than trying to correct a title, access or approval problem after completion.

Frequently Asked Questions

How do I check property title in Sri Lanka?

A property lawyer or notary should investigate the relevant title documents and Land Registry records and review the chain of ownership before the transaction proceeds. Sri Lanka’s legal framework places specific responsibilities on notaries in relation to property documentation and registry searches. Asia Pacific Energy Policy

Should I check the survey plan?

Yes. The survey plan should correspond with the deed and the physical boundaries of the property.

Can I pay a reservation fee before legal checks?

It is safer to obtain legal advice before making a significant or non-refundable payment. If a reservation payment is required, understand the refund conditions in writing.

Do foreign buyers need additional due diligence?

Yes. Foreign buyers should confirm that the ownership structure complies with Sri Lanka’s restrictions on foreign land ownership. PPP Monitor

Is due diligence necessary for a new apartment?

Yes. New developments still require checks relating to land title, approvals, condominium documentation, sale agreements, payment arrangements and final title.

Disclaimer

This article provides general information only and does not constitute legal, tax, financial, surveying or investment advice. Property transactions vary and laws, administrative procedures and regulatory requirements can change. Buyers should obtain independent advice from qualified Sri Lankan legal and other relevant professionals before making a payment or entering into a transaction.