When ownership isn’t ownership: How special land regimes undermine property rights

By Tirani Kulathunge

Originally appeared on Daily FT

• Deeds are a problem; titles are a solution but in a fragmented land system, even titles can fail to protect private ownership.

Sri Lanka’s deed-based land registration system remains one of the largest source of insecurity in the property market. Proving ownership through decades long chains of deeds is slow, costly, and vulnerable to fraud, leaving households and businesses unable to fully use land as collateral or investment capital. Land titling, through the Bimsaviya program, was designed to resolve this by replacing uncertain deeds with State-guaranteed titles. But titling alone is not enough. When titles are issued into a landscape governed by multiple overlapping land regimes (planning authorities, development zones, infrastructure corridors, and special statutory powers), private ownership remains exposed to post-title intervention, delay, and uncertainty. In such a system, ownership security depends not only on what the title says, but on which authority asserts control after the title is issued.

This concern is already recognised in policy discussions around accelerating Bimsaviya. Advocata’s Policy Recommendations for Budget 2026 note that after more than 25 years, fewer than 1.06 million parcels have been titled out of an estimated 16 million, creating a confusing dual system where deeds and titles coexist, undermining trust among citizens, banks, and legal professionals.

The report argues that Bimsaviya’s stagnation is not merely technical, but rooted in institutional fragmentation, weak coordination, and political-economy constraints that prevent titles from delivering real economic value. While accelerating titling is essential to unlock “dead capital” and restore confidence, the effectiveness of this reform ultimately depends on whether titles are protected from being quietly overridden by parallel land regimes. Without addressing how multiple authorities interact with titled land, faster titling risks reproducing insecurity in a new legal form rather than resolving it.

On paper, private land ownership is protected through formal titles, registration, and due process. In reality, those rights operate inside a maze of special regimes; investment zones, tourism areas, urban development corridors, strategic projects, reclamation authorities. Each of these is governed by its own rules, authorities, and exceptions. The result is a system where land may be privately owned, yet never fully secure.

This is not a fringe problem. It is one of the central reasons why land titles fail to deliver confidence, credit, or investment, despite years of reform efforts (de Soto, 2000; World Bank, 2017).

Special regimes are often justified in the name of speed, growth, or national importance. And in isolation, many of these objectives are legitimate. But taken together, they have created a parallel land governance universe in which ordinary rules do not apply consistently, and where ownership certainty depends less on title than on which authority claims jurisdiction at a given moment. Governance scholars have long warned that such institutional fragmentation weakens the credibility of formal rights even when laws exist on paper (North, 1990).

For private landowners, this means living with permanent uncertainty.

A land parcel can be legally titled and yet subject to rezoning without notice, redevelopment powers without proper communicated consent, acquisition without predictable compensation, or usage restrictions that emerge only when an application is made. The problem is not always expropriation; more often it is opacity. Rights are not clearly extinguished but neither are they clearly protected. Empirical land governance research shows that predictability, not the absence of regulation, is what sustains confidence in property systems (FAO, 2012).

This ambiguity is especially damaging because it is uneven. Two landowners with identical titles can face radically different realities depending on whether their land falls within a tourism development area, a strategic project zone, an urban redevelopment boundary, or a reclamation authority’s jurisdiction. In such a system, property rights are no longer universal; they are conditional. That conditionality has real consequences.

Banks hesitate to lend against land where post-title intervention is unpredictable. Investors discount land values where use rights can change overnight. Citizens delay building, selling, or improving property because the rules are unclear. Over time, land becomes economically sterile. This is not because ownership is absent, but because certainty is. Markets are unforgiving in this respect; they price institutional risk quickly and bluntly (de Soto, 2000; World Bank, 2017).

What makes this particularly troubling is that these special regimes rarely operate through the land registry itself. Decisions are often taken elsewhere, recorded elsewhere, and enforced elsewhere. Titles remain unchanged even as their substance erodes. The registry tells you who owns the land but not how fragile that ownership may be. This disconnect between registries and governing authorities is a well-documented failure mode in fragmented land systems (OECD, 2015).

This is why land titling alone cannot fix the problem.

Issuing titles into a system dominated by exceptional regimes is like handing out passports in a country where borders keep shifting. The promise of certainty collapses at the moment a parallel authority can override, qualify, or delay the exercise of ownership without transparent rules or timelines. Legal reform without institutional integration simply displaces risk rather than removing it (North, 1990).

To be clear, this is not an argument against development, investment, or planning. It is an argument against governance by exception.

Special regimes should not replace the land system; they should sit transparently within it. If land is subject to special conditions, those conditions must be visible, searchable, and legally ranked. Owners should know that before they buy, build, or borrow what actually applies to their land, and under what process it can change. International best practice increasingly recognises that integrated land information systems, rather than proliferating exceptions, are key to balancing development and rights protection (FAO, 2012; World Bank, 2017).

Instead, Sri Lanka has allowed special regimes to proliferate without integration, creating a hierarchy where “special” quietly trumps “private,” and discretion trumps predictability.

The deeper risk is not just economic; it is institutional. When property rights depend on which authority you negotiate with, rather than on a clear and consistent system, trust erodes. People could stop believing that titles mean what they say. And when that happens, no amount of digitisation or legislative amendment will restore confidence (North, 1990).

Land reform cannot succeed in a landscape where exceptions are the rule.

If Sri Lanka is serious about protecting private land ownership while pursuing development, it must confront this uncomfortable truth: special regimes need limits, transparency, and integration, not unchecked precedence. Until then, private land ownership will remain conditional, contested, and quietly weakened by the very systems meant to accelerate progress.

'‘The problem is not always expropriation; more often it is opacity. Rights are not clearly extinguished but neither are they clearly protected. Empirical land governance research shows that predictability, not the absence of regulation, is what sustains confidence in property systems”

What needs to change

1. One authoritative land system: At the core of the problem is a simple absence of hierarchy. Sri Lanka does not lack land institutions; it lacks a single system that all of them must ultimately answer to. The most basic reform principle is therefore this: there must be one authoritative land system. Special regimes can exist, but they cannot exist outside the land system. As long as planning authorities, investment bodies, infrastructure agencies, and reclamation authorities can independently alter or constrain land rights without reference to the registry, ownership certainty will remain conditional. A title can only mean what it says if no parallel authority can quietly rewrite it.

2. Bring special regimes through the registry: This principle becomes meaningful only if special regimes are required to operate through the land registry rather than around it. That does not mean stripping agencies of their powers. It means that any restriction, reservation, acquisition, or override they impose should become legally effective only once it is recorded, ranked, and visible in the land system itself. If land is subject to a development zone, an infrastructure corridor, or a strategic reservation, that fact should be discoverable before a transaction takes place, not after. When special regimes bypass the registry, they create invisible risk. When they pass through it, they create predictability.

3. Discipline exceptional powers with time and process: Finally, exceptional powers must be disciplined by time and process, not left to operate indefinitely. Many special regimes begin as temporary measures but evolve into permanent uncertainty. Restrictions should expire unless explicitly renewed, delays should trigger consequences rather than silence, and prolonged interventions should activate predictable compensation. Procedural tools such as time-bound decisions, deemed approvals, and parallel processing are not technical fixes; they are governance safeguards. Without them, delay remains the safest option and reform remains vulnerable to quiet resistance.

The reform challenge is not to abolish special regimes, but to discipline and integrate them. Sri Lanka needs a single, authoritative land system in which every special condition affecting land from planning controls, development zones, acquisition corridors, environmental buffers, or strategic reservations that is legally ranked, digitally visible, and procedurally time bound. Special regimes should no longer operate as parallel systems that override private ownership invisibly; instead, their powers must be exercised through the land registry itself, with clear triggers, timelines, and compensation rules. Where land is subject to exceptional treatment, that exception should be knowable before purchase, finance, or development and not discovered after the fact. Until special regimes are brought back into a unified land governance framework, land titles will remain formally issued but substantively insecure, and private ownership will continue to depend less on law than on discretion (North, 1990; FAO, 2012; World Bank, 2017).

Sri Lanka needs systems, not people

Originally appeared on The Morning

By Dhananath Fernando

Time to stop looking for heroes or magicians, and start looking for systems

The first time I saw a vending machine as a little boy I was awestruck. I insert coins and pick the product I want to consume and the machine automatically serves it! I had a thousand questions as to how it operated. First I thought there must be a man inside the machine who sees what I order and counts the money and serves me from behind the machine. I was confused as to how the machine identifies the value of the coin and notes; as a kid, I myself got the values of the coins mixed up. Since both the products and coins are together, what if someone steals the entire machine at night? How do they refill the bottles and how do they collect the cash? All sorts of questions were crossing my mind.

Later on, I realised there is a proper system established to run the vending machine with precision, like clockwork. In other words, there is a system in place to run a system. Today, when I see a vending machine I am not surprised. I am only surprised as to why it is not commonly available in Sri Lanka.

If I compare Sri Lanka to a vending machine, most often we place a human behind the machine instead of “setting a system” to run the “system”. Then, we fail miserably and wonder where we got things messed up. As a result, we fall back to square one and point fingers at each other and pass the responsibility to former politicians who have been in office and sometimes the blame game ends with the common citizen being the culprit when things go really wrong. Often we tell ourselves at crowded places: “Why can’t people just stay in the line?” without understanding that people don’t stay in the line not because they don’t like staying in line, but because of the absence of a token queue system.  

Many political scientists interpreted the mandate received by His Excellency the President as a mandate for a “system change”; to set up processes and procedures to ensure things operate smoothly and conveniently without any interruptions and delays. One common mistake we often make is just trying to establish a “system” without setting up a “system to set up the system”. It is the same as placing a man behind a vending machine instead of automating it.

Over the years, we have tried to set up the “system” just by using muscle power and brute force or relying on the negotiation skills and the influence of those with close political connections, rather than setting up institutions to ensure checks and balances. As a result, unsurprisingly, none of the systems have proven sustainable nor have they delivered the expected results. It has only given us hit-or-miss results, sometimes positive but mostly negative.

A good case study for the above would be the containment of the Covid-19 pandemic. Sri Lanka outperformed the rest of the world in its first phase. However, we have drastically lost our grip and the momentum we previously had in this second wave of the virus which is much larger in scale. When the cases were limited and numbers were small, it was at a scale where people’s skills were able to manage it with somewhat strict mobility controls.

However, we did not have the systems in place to face a pandemic on a larger scale and to study it scientifically and increase testing capacity. We diverted our focus and could not reduce the lead time for testing and increase accessibility. We did not have the institutions and mechanisms to collectively enforce guidelines to overcome a health crisis and as a result, we have to depend on our muscle power by transferring most of the responsibilities to our respected tri-forces and the Sri Lanka Police. Even after the first round experience of a Covid-19 cluster at the Sri Lanka Navy, we couldn’t avoid a second cluster in the Sri Lanka Police which was at the forefront of the Covid-19 battle according to the structure of containment.

Simply, we did not have “systems” to “set up systems” and throughout, the attempt was to “set up systems” by appointing people we believe are trustworthy and competent. Of course, appointing trustworthy skilful humans is a main element of a system transformation, but the mandate of the trustworthy people has to be to “set up a system” to “run the system” instead of just setting up the system to react based on the incidents taking place.

When it comes to business and investment, things are no different. One main challenge faced by most Sri Lankan entrepreneurs when they enter joint ventures with overseas companies is that the foreign company requests 51% of the shares. The reason is, if there is a legal dispute, being a minority shareholder, the investment would not be worthwhile due to the time and money they have to spend to resolve the case in Sri Lanka’s notoriously slow legal system. The first step to fixing the judiciary system is to have a system to set up systems and fix systems. It has to start from the top to the bottom, covering all aspects of the system.

Another common mistake in attempting to set up systems is trying to fix one system at a time. Though it looks practical, a governance system even in a small country like Sri Lanka is very complicated. Taking one problem at a time works in some cases but in this case when you take one case at a time the other systems mount an opposition to this and bring down the system that we try to fix. That is why we need rapid reform across all sectors of the governance system, setting up high-level institutions to “set the system” right.

Setting up systems starts from institutions. Those institutions should function independently, transparently, and democratically while ensuring equal opportunity to everybody. Institutions should be open and accessible to all sorts of ideas on a selected issue before they reach the decision-making level. Checks and balances have to be ensured. That is how we understand all sides of the problem and reduce the margin of error in our decision-making process in public policy.

People who establish systems should be able to see the broader picture and matters from a holistic approach. For example, from the perspective of prioritising healthcare, extending the lockdown for a few more weeks makes sense as it would help contain the virus to an extent. However, this would be at the expense of the growth of our already hampered economy. In a complex world, everything is interconnected and system changes need to take a look at an overall view, with a sound 360-degree understanding of the story.

As this author has been saying even before the Covid-19 pandemic, a system change is not going to make leaders popular. In fact, it will make them unpopular in the short run. However, over time, gradual successes will pave the path for them to become legends.

Setting up systems is an art like many other subjects. It is a rare art which requires knowledge in diverse fields and management skills to implement it. Sri Lanka is at a crossroads with an opportunity to revamp the “systems” and “set up a system” to “set up systems”. Only time will tell whether we capitalised on it, or in simpler terms, whether we placed a man behind the vending machine or whether we automated it.

The opinions expressed are the author’s own views. They may not necessarily reflect the views of the Advocata Institute or anyone affiliated with the institute.