Legal dispute over sale of apartment; court issues interim order

The Colombo District Court has issued an interim injunction preventing an apartment developer from transferring a unit already sold to a buyer to a third party due to a payment dispute arising from the developer demanding payment over and above the originally agreed amount.

The complainant claims that the developer is trying to recover costs due to recent price escalations for building materials and is trying to pass the costs down to the buyer outside the contract.

The interim order, issued by District Judge Poornima

Paranagamage, prohibited Iconic Developments (Private) Limited from transferring or taking any action regarding an apartment for which the buyer had paid Rs. 30 million, until the case concluded.

Based on an earlier agreement, the complainant and her brother had initially paid Rs. 30 million to the developer for the apartment. However, on June 30, the developer had asked the complainant to pay a further Rs. 1.5 million.

The complainant and her brother had protested against this demand, pointing out the developer had earlier agreed that Rs. 30 million amounted to 100% of the payment for the apartment and there had been several delays on the developer’s part in finishing the construction of the apartment by the scheduled date.

The complainant contended that the agreement with the developer did not cover this additional payment of Rs. 1.5 million and it was an attempt by the developer to cover losses incurred due to price increases of building materials as a result of the country’s economic crisis.

Since she had refused to make the additional payment, the complainant had sought the interim order from the court over concerns the developer may cancel the agreement it had entered with her and transfer the apartment to a third party, resulting in considerable financial loss to the complainant.

Taking the matters into consideration, the District Judge issued the interim order preventing the developer from transferring or taking any other action regarding the apartment to a third party pending the conclusion of the case. The case would be heard on Friday (November 25).