Re-development of old condos
A serious concern wherever there are aging residential condos,
especially ones that are inhabited mainly by low-income residents, is
what happens when the buildings become so decrepit that it is
uneconomical to renovate them.
A 10.5 acre condo development in a desirable location in Colombo, Sri
Lanka is facing that problem now and the government has a solution.
Foreign developers will purchase the land, build a 40 story modern
condo tower to house the current residents and then develop the
remaining ten acres.
Some owners are opposed to this plan while the government states that 80% of the owners are in favour.
Which side is right? Who can tell.
However, the government states that the main issue is that the existing
buildings are unsafe and that the condo corporations who were
responsible for repairs and replacements did not raise sufficent monies
over the years to fulfill their responsibilities.
Revolt in Bamba Flats over new giant condo plan
The Sunday Times
24 July 2016
By Chamal Weerakkody
Dismayed residents of Bambalapitiya Flats are up in arms against the
proposed redevelopment of the precinct, panicking over the proposed
demolition of their homes and their removal to new quarters.
Individuals have sent letters rejecting the proposed redevelopment
project and demanded that the Condominium Management Authority (CMA)
abandon the proposal within the next week.
The proposed government plan would see most of the 10.5 acres of land
currently occupied by the apartment blocks redeveloped with one acre
set apart for a 54-storied condominium to which the residents would be
The President of the Bambalapitiya Flats Welfare Association (BFWA), N.
Ragunanthan, expressed his frustration over the CMA’s strategy to
forcibly acquire their property. Mr. Ragunanthan said residents had
received a letter on June 26 and a brochure with a floorplan of the
proposed condominium, and been given 14 days to respond.
He said the CMA had approached residents on three occasions, in 2012,
2014 and 2016, requesting consent to initiate a redevelopment project.
In 2014, the residents had been presented with a proposal to refurbish
the existing apartments. Seventeen residents’ representatives had
attended the meeting and had requested renovations to the water tank
and drainage system, Mr. Ragunanthan said.
“However, the signatures of the attended representatives were
manipulated to draft a paper for the redevelopment proposal,” Mr.
Ragunanthan alleged. “The CMA returned on April 1, 2016 with a brochure
containing an allocation of one acre for 10 shop-owners and 300
families and rest of the nine- and-a-half acres for a foreign
Although the residents are frustrated by the CMA’s attitude they are
still open to discussion on the redevelopment proposal and want
amendments on majority terms and for transactions to occur in fair and
transparent manner, Mr. Ragunanthan said.
The Bambalapitiya Flats consists of 17 blocks, 300 apartments, 10
retail outlets and common areas spreading across 10.5 acres. The flats
were built in 1956, provided through a rental scheme for government and
mercantile executives. In 1977, some of the residents received the
deeds to their apartments and the rest were given deeds to their units
in 1984. Common areas come under the National Housing Authority.
Most of the original deeds have been transferred by the early residents
to their children born and bred at the “Bamba Flats” over the past 60
years. Mithila Malambe, a resident and former president of the BFWA,
said the CMA was ignoring the needs of elderly residents with
increasing mobility problems in proposing a 54-storey condominium. As
well, she said, residents were worried about whether they could afford
condominium fees when they were aged and their financial circumstances
A condominium manager who wished to stay anonymous said the residents
would have to bear higher municipality tax and utilities charges, human
resources expenses, fire insurance, sinking fund fees, maintenance fees
such as pest control, solid waste management, maintenance and
replacement of cabling, wiring or plumbing and upkeep of the property
including any outdoor areas – all of which would amount to about Rs. 3
million a month for 300 families and 10 shops.
The CMA says the proposed condominium would have two, three and
four-bedroom apartments with eight apartments on each floor, parking
spaces, a stand-by generator, five passenger lifts, one service lift, a
gymnasium, community centre, swimming pool and many additional
features. It says Rs. 100 million would be set aside as a management
fund and Rs. 50 million as a sinking fund controlled by the authority.
A CMA brochure states the “developer consortium is led by UTL Group, a
Singapore- based consortium with backing from Engineering Projects
India Ltd, a Govt. of India company”. Mr. Baratha Mendis, also a former
BFWA president, said the CMA should have dealt with residents in a
professional manner as most of them had served the country to the
utmost in their respective fields.
Mr. Mendis is head of the Steering Committee set up to advise residents
over the proposed condominium. BFWA Vice President Shihab Shaideen, 42,
gave a brief history of the Welfare Association, saying it had been
established in 1958 with a constitution and a committee elected every
year through an Annual General Meeting. Income generated by the
community centre was used to pay allowances for six cleaners and to
light up common areas. The BFWA paid an annual municipality tax of Rs.
86,000 for the community centre and Rs. 19,000 for the playground.
He dismissed the existence of management corporations from which the
CMA claimed to have obtained 17 signatures for redevelopment, saying
there was no evidence for the existence of such entities – no AGMs, or
minutes or bank accounts or records of meetings held since the
establishment of the flats.
Management corporations, according to the Condominium Act, are
responsible for the wellbeing of residents and the property. They
should collect a maintenance charge from residents and have a fire
insurance policy. As there are 17 blocks in the Bambalapitiya Flats
there should have been a corporation for each block.
The Sunday Times was told, however, that there have not been any
management corporations since the establishment of the flats (and there
is no fire insurance policy). The residents had formed a common Welfare
Association instead of separate committees.
Mr. Shaideen says that there are no 17 management corporations in
existence and that therefore the 17 signatures obtained from people
claiming to represent corporations are not valid.
He also claims that as the CMA had been formed many years after the
flats were built the Condominiums Law has no authority over the flats.
Resident Arul Rajasingham, 68, said in any event, according to the
Condominiums Act, representatives of any such management corporations
could only represent residents by proxy and would not have any
authority to take decisions.
Other residents also expressed deep disquiet.
Prosper Rajanayagam, 72, said the CMA’s objective was to take over the
land for a foreign developer, with no guarantee whether residents would
be given apartments, and the new apartments could be of substandard
construction. M. Sudaharan, 69, feared the CMA or the developer would
demand that residents quit the property as soon as the deeds were
transferred to them.
He said the authority had neglected to provide a management plan or any other information regarding the proposed condominium.
The CMA Chairman, C.A. Wijayaweera, dismissed these claims, insisting
residents would benefit from the proposed project and see their living
He said the Flats buildings, in their current condition, required
immediate refurbishment according to the residents but the government
could not bear this expense and since the owners had been given the
deeds to their flats they should have undertaken the necessary
Given the lack of funds and the need to develop the area the CMA had
decided to negotiate with a foreign investor as the better option for
the benefit of the occupants of the flats, Mr. Wijayaweera said. He
pointed out that the Land Acquisition Act permitted authorities to take
over land if necessary for development.
The Act stipulates that the government can take or acquire private
property for “a public purpose” on payment of compensation: the
requirement must be for a public purpose. The CMA Chairman said that
following the signing of a Memorandum of Understanding with the
National Housing Development Authority, residents would receive legal
documents of ownership of the new apartments.
He claimed that a fraction of the flats community was creating a ruckus
over the situation and that most residents were willing to consent to
He said the CMA would negotiate only with 17 working corporations
regarding the proposal but not with the Welfare Association in
accordance with the Condominiums Act which, he said, specified that
management corporations were the only authorised body to manage the
Two options will be provided to the residents, Mr. Wijayaweera said:
whether to accept the proposed free apartment or accept he monetary
value of their current accommodation as determined by a property valuer.
Live in vertical slums or opt for a modern lifestyle—owners have to decide
The Sunday Times
20 November 2016
The 10.5 acres of land on which the Bambalapitiya Flats stands on was
once owned by the Catholic Church (in the 1940s). It was acquired by
the government of that time (soon after independence) with plans by the
Ministry of Justice to build a law complex.
That was shelved and the site was handed over to the National Housing
Development Authority which built the residential flats in 1956.
It comprises 17 blocks, 300 apartments, 10 retail outlets and common
areas. According to the Condominium Management Authority (CMA) which is
driving the re-development project, more than 80 per cent of the owners
back the government’s plans for re-development.
To get more details of this development the Business Times spoke to CMA chairman C.A. Wijeyeweere:
Can you elaborate on the re-development plans?
Under the CMA Law we have the authority to acquire condominiums that
are over 40 years for the purpose of re-development to provide the
people in these apartments a better lifestyle.
The Government has taken a Cabinet decision to give high priority for
the re-development project. The flat owners will be provided with
luxury apartments in the same premises without any cost to them. The
valuable site has been earmarked as a high-yield urban block and will
play a crucial role in the planning and development of the city.
These old flats are 60 years old and to remain without re-development
will turn out to be vertical slums in Bambalapitiya and the heart of
the city. These flats are beyond economic repair. Some of them facing
the sea are in a poor state. The reinforcement of concrete slabs is
corroded and roofs decayed. Some occupants run a great risk with most
of the buildings not conducive for human habitations.
In terms of the law, the management corporations have failed to insure the flats against any forms of disaster.
What will happen to the people living there?
There are 298 flat owners and 10 shop owners. They have two options.
Firstly each flat owner is offered a luxury flat at no cost to them in
the same premises with all modern facilities.
The second option is for the flatters who are interested in selling
their flats or the apartments can get the value of the unit they own as
per the determination of the government chief valuer and vacate the
premises he owns. All parties will have to vacate the premises after
signing an agreement with the NHDA and after obtaining a
Where will they be relocated during the re-development?
All those flatters willing to accept a flat will be provided with a
decent rent allowance until the completion of the relocation tower
within the premises.
They can find alternative accommodation during the construction period.
This rent will be more than the prevailing market rental rates. Two
years of the agreed rent will be provided upfront, no sooner the
agreement is signed.
How many towers will be built and what is the time frame for the re-development?
Around 2,000 people will be accommodated in seven towers (including one
only for current owners). According to the developer, the time frame
will be between 36 to 42 months. UTI Global Projects Singapore and
Engineering Projects India, a company of the government of India, are
the investors and developers. Their credentials have been verified by
the Board of Investment.
What will be the cost of re-development and who will bear the cost?
The cost of re-development will be around US$100 million I believe. The developers will bear the cost.
Are the residents keen on the re-development?
Of course. Out of 308 owners, 80 per cent are in favour. However a
small number with vested interests are against it. Most of those who
oppose are tenants and unauthorized occupants, not owners. Some of
these people have built unauthorised walls and acquired common areas
and amenities owned by the flat dwellers. Simply speaking they are
violators of the law and harassing the majority of the legal owners.
Some of the unauthorised occupants, by the use of force are holding
office in the Welfare Society and pressurise the elderly owners to go
Where does the project stand right now?
The latest is very encouraging. The developer under the directions of
the CMA has agreed to include proposals received from the owners to the
This is mainly with regard to apartment sizes, revision of the rent
allowance and other facilities to be provided. On the owners’ request,
the developer has also agreed to reduce the height of the relocation
tower to about 30 floors above the parking area.
We will call members of each management corporation and present the
revised proposal to them so that they can accept or reject it. The
majority decision will be implemented and owners will have to sign a
MOU and agreement with the NHDA.
The developer has also agreed to deposit Rs.100 million for a
maintenance fund and a further sum of Rs.50 million for the sinking
fund. In addition an income earning project will be worked out to
reduce the burden of maintenance by the management corporation.
At present almost 80 per cent of the owners are looking forward to a modern apartment. -(Alvin)
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