Buyers ditched as developer abandons proposed ‘CM Towers’ condominium project

‘A Rs. 600mn rip-off’

by SURESH PERERA

Scores of prospective buyers of housing units at a proposed condominium project in the outskirts of Colombo have been ripped off for at least Rs. 600 million in, what was been described, as a “major scam” by a developer whose company now remains shut.

In the backdrop of a private sector bank announcing moves to auction the 42-perch site of the envisaged condominium complex as the developer had raised Rs. 120 million in capital financing against the property, distraught victims of the swindle bemoaned that they have now “lost all their hard-earned savings”.

“There are around 52 prospective buyers, most of whom dished out anything between Rs. 5 and 10 million each as downpayment for the apartments”, says Gehan Samaranayake, president of ‘Ramanathan Avenue CM Condo Buyers’ Association’.

He said the developer M/s Civi-Mec Construction (Pvt) Ltd., started selling apartment units for the proposed CM Towers condominium project at No. 14, Ramanathan Avenue, Dehiwala, in 2014 and began construction the same year with the approval of the Dehiwala Mount Lavinia Municipal Council.

At that juncture, approval was given to the developer for a G+17 storied housing complex encompassing 112 middle class apartment units with four floors for parking vehicles. The developer of the project, M/s Civi-Mec Construction, had only one director with a registered office at W. A. Silva Mawatha, Colombo 6. The land earmarked for the housing project was mortgaged to a private sector bank to raise funds for the proposed condominium, Samaranayake noted.

“After entering into sales agreements, we paid a considerable downpayment and continued honoring the subsequent monthly installments to meet the balance as the developer laid the foundation with piling in line with the approved G+17 floor building’, he recalled.

“However, with the change of government in 2015, we were told the new administration restricted the number to nine residential floors, and the reason adduced was that some officials responsible for granting approvals were demanding substantial inducements to give the green light for the original plan of G+17 floors”, the Association’s president asserted.

He said at that point, the private bank, which agreed to finance the 112-housing unit project, stopped further funding as it was considered non-viable to invest on heavy foundations and have only nine residential floors with 64 condominium units, instead of 17 floors.

The developer abandoned the project at this stage in 2018 and stopped paying the loan installments to the bank, closed his office and went into hiding. The desperate buyers made complaints to the Police, CID and the Fraud Bureau, with some opting for civil cases as well. Subsequently, the CID arrested the director of Civi-Mec, who was remanded and later released on bail by the Mount Lavinia Magistrate’s Courts, Samaranayake noted.

“There are many of us in the Association, who have paid more than Rs. 10 million each for apartments and according to our records, the developer has collected from the known buyers alone Rs. 600 million, without any interest calculated”, he claimed.

He further said that the bank, citing the default of Rs. 120 million loaned towards the project, exercised the powers vested on its board of directors and initiated the process of recovering the loan by auctioning the property by the end of this month.

Vacating an earlier stay order, the Commercial High Court has allowed the bank to auction the property to recover an accumulated Rs. 160 million, inclusive of other costs, he said, while adding that the bank has already given notice of the auction on October 28, 2020.

“Most of the prospective buyers of this proposed middle-class condominium complex are retirees, who had invested their life’s savings on what they thought would be their ‘dream home’. All their hopes have now been shattered”, Samaranayake stressed.

Repeated attempts by The Sunday Island to contact the

director of Civi-Mec Construction on the phone number listed on its website were futile as there was no response.

As indicated by the ‘Ramanathan Avenue CM Condo Buyers’ Association’, the developer’s office in Colombo 6 remained closed. As a result, there was no possibility of contacting the director concerned for comment on the issues raised by those who have now been left in the lurch after forking out millions of rupees.

“If the buyers of the condominiums had entered into sales agreements, we can initiate legal action against the developer”, says Sarana Karunarathna, Chairman, Condominium Management Authority.

“They can write to the Authority so that we can pursue the matter”, he noted, while adding that he was unaware of the developments until The Sunday Island brought the matter to his notice.