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).