As in almost every other country the buying process cannot be completed without a lawyer or notary. If you are planing to buy property you should choose one you can trust and who speaks English, as well as the native language of the seller, in order to avoid communication problems or problems with the contract.
Finding property can be quite hard since people from Sri Lanka often do not advertise what they sell. They want to avoid everybody knowing they may come into a lot of money soon. This means you will most of the time need an estate agent. Real estate agents in Sri Lanka are not licenced so check their reputation and talk to other expats or locals who have experience in buying property. Sometimes they charge commission from both sides: buyer and seller. Try to negotiate and agree on a commission before you sign anything.
Negotiating the price and legal checks
Having found the house or property of your dreams you should make an offer to the seller or negotiate the price. Be prepared for a lot of bargaining. Sri Lankans often raise the price tremendously when selling to a foreigner.
Your lawyer will check the deeds and the plan of property at the Land Registry to ensure that the seller is the only and legal owner. Further checks should be made for eventual debts or leasing agreements.
If there are some ambiguities and you still want to buy it, you should buy a title insurance to protect you from any future claims to the land. Usually the ownership should be clear though (and it may not be the best plan to buy it if there are doubts).
Signing the contract
If both parties agree on a price, the lawyer sets up a contract that seller and buyer have to sign. In the case that there are more owners each of them has to sign the contract. You usually pay a deposit of 10% of the whole price afterwards if you can’t pay all at once. Having signed the contract you need to pay a service tax to the local authority. It is about Rs400 - Rs5,000 (€2 - €30) and has to be paid every year.
After that, the seller needs to get a building and street line certificate from the municipality as well as a non-vesting and ownership proof. He also needs tax receipts for proof of payment of rates and taxes for the last quarter as well as the certificate of conformity in respect of the building.
Then the seller has to request an updated survey plan that has to be attached when applying for the registration later.
After finishing the deed of transfer, the stamp duty (around 3% - 4%) has to be paid at a nominated bank within seven days in favour of the responsible Provincial Council.
Finally the lawyer/ notary has to register the deed at the Land Registry and the new owner at the municipality. You receive a certificate of ownership. No deal is closed and legal until the new owner is registered.