The Cabinet of Ministers has approved a proposal to amend the Registration of Documents Ordinance, citing that caveat ban has become a tool means of extortion for fraudulent individuals, due to the loopholes in the ordinance.
On Monday, the Cabinet of Ministers approved the proposal presented by Justice Minister Ali Sabry to amend the Registration of Documents Ordinance, as recommended by the Legal Commission and to advice legal draftsman to prepare bills for this purpose. “At present, no one buys land with a caveat ban and lenders do not lend on such land. It has been found that fraudulent individuals use the caveat ban as a means of extortion. It appears that this fraudulent act is being perpetrated by a person who has no ownership or possession of the land and files a ban on the caveat and takes large sums of money to lift the ban,” the Government Information Department said.
Sri Lanka’s condominium developers recently came forward exposing a certain group, who has made it a practice to blackmail them with threats of submitting caveat notices for planned projects, which could lead to prolonged legal processes, causing significant delays. It was noted that condominium developers were facing a loss running up to millions of rupees as a result of caveat notices, which can be registered for a mere Rs.2,500.
A submission of a single caveat could bring 10 to 15 or in certain instances, 100 to 200 transfers of properties to a standstill.
However, a caveat cannot prevent the registration of a document relating to a land, if it appears to be genuine. (NF)