Challenges to identify the rectifications that can implement

Challenges
of condominium development projects to investigate long term sustainability

Literature
review

Abstract

Due to
the higher demand of houses in Sri Lanka condominium market has become to its
peak in terms of the demand. So it is very important to understand about the
challenges face by condominium projects to investigate long term sustainability.
Challengers are discussed under 3 phases. Those are prior to construction
phase, construction phase and post construction phase. And also there are
challenges face by condominium market due to economic and social situation of a
country. This literature review is mainly based on those challenges face by
condominium projects at present and to identify the rectifications that can
implement in order to overcome those challenges.

 What are condominiums

With the
increase of population,urbanization and scarcity of land of eastern countries
people trend to go for condominiums which is a western cultured life
style.  Condominiums are mostly acquired
by high income people of these countries due to that(sepani). Demand for houses
in sri lanka rapidly increasing acording to reports of Central Bank of Sri
Lanka. The annual demand for houses in sri lanka is approximately 80 000- 100
000 units (hewamanne 2004). So condominiums are the best solution for the
scarcity of land in colombo city. (samarasingha 2007)

According
to edirimanna this can be called as individuality and commonality.  Condo owners owned everything in their condo
unit only by themselves , but the common areas of the condos like elevators ,  lifts ,pools ,gymnasium , walking  tracks,parking and launderette are owned
equally by every condo owners. Some common amenities shared are garbage
disposal 24/7 security service and recreational facilities. Maintenances
are  carried out by a condominium
management unit consisting of condo owners. Every owner has responsibilities in
that unit and are bound to pay monthly dues for maintainance activities. Condo
owners can  consume these common services
with lesser cost than individual house owners so the people are more likely to
go for condominiums rather than building a individual house. (ediri)

In  Apartment ownership Act no 11 of 1982 it is
clearly mention the individual ownership of multi storey properties. But due to
the lack of  identification of management
considerations of condos amendment was made in 2003. Condominium management
authority is the responsible  authority
of condominiums in Sri Lanka.  It is
illegal to start any condominiums project without the approval of the  CMA. Those condo projects must be according
to the specifications of the CMA.

Condominium
types in sri lanka

Super
luxury , Luxury or  Semi luxury, Normal
basic apartments and middle income condo projects . This categorization is
according to facilities and value of the condominium unit.

Type of
condominium

Condo unit value

Region in colombo

Super Luxury

Above 30 million
/=

Colombo 01,02,11,03,04

Luxury or semi
luxury

About 25 million
/=

Wellawatta ,
Bambalapitiya, Colombo 07,08,09,10

Normal basic
apartments

From 18 million
to 25 million

Dehiwala , Mount
Lavinia , Wellawatta

Middle income
condominium projects

About 5 milion /=

Rajagiriya, sri
jayawardenepura kotte, battaramulla, malambe, Homagama , kottawa

 

 

 

 

(on
point sri lanka)

 

 

 

Classification
of condominiums based on the facilities (senaratne)

Facilities

       Type

24
hour security

 

 

 

CCTV

Fire
protection

Garbage
disposal system

Elevators

Hot
water Geysers

MATV
connection

Children
play area

Vehicle
park

Private
balconies

Air
conditioned apartment blocks

 

Swimming
pools

Restaurant
and bar

Gymnasium

Laundry

Central
Gas supply system

 

Children’s
pool

Games
room

Convenience
stores

Video
centre

Changing
and meal room for drivers

Walking
track

Squash
court

 

 

 

salon

 

 

 

sauna

 

 

 

Standby
Generator

 

 

 

Service
Elevator

 

 

 

Three
tier security system

 

 

 

 

Legend

Semi luxury

 

Luxury

 

Super luxury

 

                 

 

 

 

 

 

These
categorization was done in 2006 considering factors of that era. But now after
more than a decade the living standard have changed rapidly so that the
facility demands of buyers may be higher. So it is necessary to re-categorize
relevant to the present situation.

 

Existing
 Condominium projects in Sri Lanka
(LankaPropertyWeb)( CMA)

Condominium

Location

Year

NO of floors

NO of units

Developer

Royal park

rajagiriya

1998

25

240

Kiangnam
constructions

Crescat
residencies

Colombo 3

1997

25

150

Asian Hotel
PropertiesLtd

The Monarch

Colombo 3

2007

30

212

           ”

Havelock City

Wellawatte

2014(P1)

Max 29

879

Mireka Capital
Land

The Emperor

Colombo3

2010

35

150

Asian Hotel and
Propeties Ltd

GS Towers

Kotahena

2010

Twin towers 30
& 36

240

CT properties Ltd

The Empire
Residencies

Colombo(adjacent
to Empire Theater)

2009

2 towers 33 &
37

100

Capital Park

Rampuram
Wellawatta

2009

11

3 towers

Pathma
Constructions

On320

Union Place
,Colombo 2

2014

37

3 towers 475
units

John Keells

Fairway sky
gardens

kotte

2014

31

120

Fairway
Residencies Pvt Ltd

Platinum 1

Colombo 3

2013

20

 

Penthouses &
66 residential apartments

The Cornish

Galle Face
Terrace ,Colombo 03

2014

8

25

Complete
Investments

Iceland
Residencies

Colombo 03

2008

31

110

ICC Housing(pvt)
Ltd

Blue Orchid
Residencies

Borelesgamuwa

2016

 

 

 

Richmond Hill
Residencies

Galle

2016

 

 

 

Clearpoint
Residencies

Kotte

2017

46

164

Milroy Perera
Associated (Pvt) Ltd

 

Ongoing
Condominium Projects

Condominium

Location

Completion       Year

No of floors

NO of units

Developer

Grand Hyatt
Colombo

Colombo 03

Late 2017

47

475

Canwill holdings
Limited & MAGA

Krrish Ritz-
Carlton

Colombo 1

 TBC

Two 70 storied
tower

70

Krrish Group ,
INdia

Altair

Colombo 02

2018

68

400

Indocean
Developers

The Residences at
one Galle Face

Colombo 01

2018

50

406

Shangri-La Hotels
Lanka Ltd

The Residence at
Colombo city centre

Colombo 2

2018

48

180

SilverNeedle
Hospitality & Abans

Capital Twin
Peaks

Colombo 2

2020

41 ( 2 tower
blocks)

388

Capital
Developers Ltd (sanken)

 

 

Challenges
faced by condominium development projects can be discussed under 3 stages.

1.     
Pre
 construction phase

2.     
Construction
phase

3.     
Post
construction

Pre
construction phase

Normally
It’s seems that living in a condominium is a dream for anyone in the society.
It can be nightmare as well if the condominium you are living is not
sustainable. Currently the condo demand in Sri Lanka is very high so the real
state industry has risen rapidly throughout the past few years. So the it is
very profitable for investors and developers to start condominium projects. But
most of the projects are not according to the specifications. Sustainable condo
is the main expectation of   buyers. It is
developer’s responsibity   to deliver good end product to the customer.

Even
before starting the construction of the condo, purchasing of condo units
commenced in Sri Lanka. Due to the higher demand this happens without any
obstacles. Firstly developer gives rough sketch of a condo and condo unit and
some details of facilities they going to deliver for the residents and get a
advance from them.  Most of these
condominiums are not even registered in CMA . So it is very important for
buyers to have a wide understanding before purchasing.

So now
the Condominium Management Authority has informed buyers to ask for some information
about the condo from the developer before doing any payment. Some of them are
Ownership, copy of Deed , Approval of local authorities regarding the ownership,
copy of street line certificate  and
preliminary clearance letter by CMA. And some other areas to find out are
whether approval of Central Environmental Authority are taken,  strom water drainage system , parking
facilities, construction period , anticipating date of issuing deeds and
systems  designed by the constructor for
water, electricity, sewers and also backup system for water and electricity.
(CMA)

In the
constructors point of view prior to construction they have to go through a
complicated legislative procedure in order to start a multi  storey 
project.  According to the Sri
Lankan law the builder have to register the building at least twice in order to
be legal. The procedure is firstly enable approval of the pre sales of the unit
and  registrating as the provisional
condominium property . Next the registration of the condo as a completed condo
property till the construction and the issuing of the certificate of conformity.
This is also very costly for the developer to go through various registration
procedures. Due to this problem now the most of the builder are neglecting this
legal system. Pre-selling of condo units are carrying neglecting the registering
procedure , even the banks are also trend to neglect these requirements when
issuing mortgages. This is a huge challenge for the sustainability of  condominium industry. (http://www.sundaytimes.lk/150308/sunday-times-2/what-ails-the-condominium-industry-in-sri-lanka-139147.html)

Construction
phase

In
construction stage developer should concern about the long term sustainability
of condominiums. Sustainability can be described in many ways. Simply  sustainability means that achieving of current
required goals without disturbing the future requirements. When this apply to
construction of a high rise condo , developer should consider about the condo
owner’s health , safety and comfort ability of the owners. And also
minimization of energy and material consumption.(richrd wener) Now a days green
building construction is very important considering environmental factors. If
every constructor stick to ‘Build right the 1st time’ concept ,
owners can get a top quality residence. This will minimize excess expenses of
condos and reduce the frustration of owners.

High
rise condominium buildings normally consume large number of resources. While
construction large quantities of building materials and large amount of energy
is used. Huge amount of waste is produced.

Green
buildings are typically build considering the requirements of the residents.
Developer should ensure a better surrounding for the community including the
neighborhood near the condominium.

But
currently in Sri Lanka there are some challenges face by condominium industry
when investigating long term sustainability.

Due to
the higher demand of condo market lots of condo projects are in construction
right now. According to the former chairman of 
Condominium Management Authority C.A Wijeweeree most of the condo are
not even registered in CMA.  According to
Western Province Megapolis Minister Champika Ranawaka about 10 000 unapproved
buildings are found in Colombo area. Most of them are apartment buildings.  Another major issue is most of the
constructors take approval for certain number of storeys and build more than
that. Most recently building was collapse at wellawatte area in 2017.

Due to
the scarcity of the land and cheap expectation of the builder now the most of
the condos are constructing in infill lands. This will cause severely for the
environmental system and will cause for proper space, sunlight and ventilation and
also the future generation of the condo owners. This issue has been identified
by the condominium management authority and are willing enforce laws to avoid
that.

Now a
days builders are using glass from floor to ceiling as the wall because it is
very effective in case of construction. But as glass is a low insulating
material and also they totally transparent to sun light condo can be heat up at
summer times and with the time this effect will increase severely.

Another
severe condition is lack of fire escapes systems in condominiums in case of a
emergency in Sri Lanka. And also special attention should be given when
designing a parking spaces due to the scarcity of the lands in Colombo.

Lack of
waste disposal management in Colombo is a major issue right now. Large amount
of waste is created in condominiums daily. So constructors should think  about 
waste  disposal system while
designing the condo building.

Post
construction

After one year of completion of the condominium the
maintenance and repairing of the condominium is carried out by the condominium
management unit. Members of that unit is consists with residents. This
corporate body represents all owners of the condominium. Funds are collected
from the members of the unit. In many countries governments have enforced laws
to controls the constitutions of these units. Condominium
developments in maturing destinations: potentials and

problems oflong-term
sustainability$

Jan Warnkena,*, Roslyn Russellb, Bill Faulkner{

Most of the condominiums are facing large amount of
maintainance cost. This is due to the poor design of the structure and
unacceptable construction techniques during the phase of the construction.
(Assaf et al., 1995; Al-Hammad et
al., 1997; Adejimi, 2005). Costs incurred for maintainance activities
are higher in various condos. In some occasions the cost  for maintainance is  nearly 50% of the initial construction cost.
(Boussabaine and Kirkham, 2004). 

Due to the increasing
number of condos in Sri Lanka mainatainance problems going to be severe.
According to reports annual maintenance cost is about 2,267.10 per square
meter.  The reasons for that is the
inproper construction design  and
existing maintenance practice. So buyers will have to bear increased amount of
construction cost and unexpected 
problems. This will severely affect for the long sustainability of
condos.

Some
significant defects that can be seen in condominium buildings are defects in
the services such as air conditioning, fire and lifts. Waterproofing defects
causing seepages in building ,paint defects, piping and plumbing defects and
plaster defects can also be seen. (nayanathara)

Other
Challengers

Uncertainty
of condominium market

Currently
in Sri Lanka the condominium market is stable. But according to the UDA the Sri
Lanka’S real state market is in danger of facing a serious bubble in another
five years time. One of the main reason is due to inflation of the country.

Central
Bank Governor Indrajith Coomaraswamay also claimed that condominium market is
heading for collapsing. Currently the condo prices in Sri Lanka is significantly
higher compared to condos in Europe, 
Austrailia, East Asia and neighboring countries. In most cases customers
can purchase a unit in condominium according to loan basis by depositing
certain amount of money. But due lack of 
stability of the economy the interest rates might increase. When
customers can’t afford to pay their loans, banking system will collapse and
then the condominium market. Similar thing has happened in USA in 2008. So
Central Bank is now trying to control the condo market in a sustainable growth
path. Some banks have already minimize financing luxury apartments while others
have limited their exposure to mid and lower priced condominiums.

 

Another
important thing consider is the upcoming port city and mega polis project.
Under these projects lots of condominiums are to be build. This will increase
condo market. But  specially under mega
polis project whole Colombo city structure is going to change. Office based
cities and residential based cities will changed and this will effect for
current condominiums.

Weaknesses
and shortcomings in Condominium Management Authority

In Sri
Lanka lot of condominiums are constructing without the approval of the CMA and
their specifications. So CMA is willing implement amendments to the Apartment
Law. They are going to inspect construction activities of condos time to time
and ensure the building is according to the specifications. And also CMA is
willing to obtain a certificate from the developer’s bank also. http://www.ceylontoday.lk/print20170401CT20170630.php?id=32045

Security

In most
of the condominiums 24/7 security is provided. CCTV cameras also provided in
common areas. In most occasions security service is done by a third party and
it is very difficult to identify the people living in condos. Company should
also keep in touch with this third party continuously.

Parking
Facilities

In most
of the low rise condominiums there are no required space for parking. In very critical
times parking slots are not enough. So vehicles are parked by the side of the
road. Ground floor is using as the parking space but sometimes this is not
adequate. So it is needed to have basements to fulfill the demand.

 

Conclusion

According
to various reports and studies condominium market in Sri Lanka is no longer
stable. Lot of developers are not considering about the long term
sustainability of condos when constructing. The most critical challenges
identified was challenges face in while construction and after construction
phases especially in maintenance stage. And also based on the economic and
political situation of Sri Lanka the condominium market can be vary and
currently it is predicted that in five years time the condominium market will
collapse. So it is necessary take proper plns and solutions to overcome these
future challenges.

 

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