LK Notaries Final cheat sheet

Contract formation requires offer, acceptance, consideration or causa, capacity, and lawful object; the LK legal framework is rooted in Roman-Dutch law as applied in Sri Lanka, supplemented by statute.

Consensus ad idem: parties must agree on the same thing in the same sense; material mistake (error in substantia or error in negotio) vitiates consent, whereas incidental mistake generally does not.

Void ab initio versus voidable: void contracts produce no legal effect and cannot be ratified; voidable contracts (duress, undue influence, fraud, misrepresentation) remain valid until rescinded by the aggrieved party.

Restitution in integrum restores the parties to their pre-contract position; available for minors' contracts and for contracts rescinded on grounds of lesion or fraud.

Prescription: contractual claims generally prescribe in six years under the Prescription Ordinance; delictual claims in two years; immovable property claims are subject to longer periods.

Agency: a contract made by an agent within actual or apparent authority binds the principal; undisclosed principal may sue and be sued on the contract.

Obligations are either civil (enforceable) or natural (imperfect, e.g. time-barred debts); natural obligations cannot be enforced but voluntary payment is not recoverable.

Conditions: suspensive conditions postpone the obligation until fulfilled; resolutive conditions terminate the obligation upon fulfilment; fictional fulfilment is treated as actual fulfilment.

Immovable property ownership transfers only by notarial deed (in the form prescribed by the Notaries Ordinance) followed by registration; the deed alone does not pass title as against third parties.

The Land Registry Act (Chapter 253) governs the registration of deeds and the priority of competing interests; priority generally follows the order of registration, not the order of execution.

Co-ownership: co-owners hold undivided shares; each may alienate or encumber their share without consent of the others, but a co-owner has no right of pre-emption unless agreed.

Servitudes (easements) must be created by notarial deed and registered; a dominant tenement enjoys the right, a servient tenement bears it; servitudes may be extinguished by non-use or merger.

Leases exceeding one year must be in writing and registered under the Prevention of Frauds Ordinance; unregistered long leases are not enforceable against third parties.

Boundaries and encroachments: the Land Survey Ordinance and the cadastral system govern boundary disputes; adverse possession requires open, peaceful, uninterrupted possession for the statutory period.

Condominium property is governed by the Apartment Ownership Act; individual units with common elements are created by a declaration registered with the Condominium Management Authority.

State land is alienated by grant or permit under the Land Development Ordinance and related statutes; a grant becomes absolute only on payment and compliance with conditions.

A mortgage over immovable property is created by a notarial deed and must be registered; the mortgagee's right is a hypothec enforceable by judicial sale (parate execution requires express agreement).

A primary mortgage (first charge) ranks ahead of subsequent mortgages; priority is determined by the date of registration, not the date of the deed.

Movable property may be pledged by delivery of possession; hypothecation of movables requires registration under the relevant statute (e.g. the Registration of Documents Ordinance for certain categories).

A mortgage secures principal, interest, and costs; the mortgagee may not retain surplus proceeds after judicial sale - the surplus is paid to subsequent encumbrancers and then the mortgagor.

Redemption: the mortgagor may redeem on payment of all sums secured; the mortgagee cannot clog the equity of redemption or impose an unreasonable restraint on redemption.

Transfer of mortgaged property: the purchaser takes subject to the mortgage unless the mortgage is discharged; the mortgagee's consent is not required for a transfer but registration of the transfer does not extinguish the charge.

Guarantees and sureties: a surety's liability is co-extensive with the principal debtor's, but a surety may raise the defences available to the principal debtor; continuing guarantees require notice of termination.

Statutory security rights: the Employees' Provident Fund and Inland Revenue Acts create preferential claims that may rank ahead of a registered mortgage in insolvency or winding-up.

A company registered under the Companies Act (No. 7 of 2007) is a separate legal person with perpetual succession, capable of owning property, contracting, and suing in its own name.

Limited liability: shareholders are liable only for the unpaid amount on their shares; the corporate veil may be lifted for fraud, sham, or where the company is a mere agent of the shareholder.

Directors owe fiduciary duties of good faith, care, and skill, and must avoid conflicts of interest; breach may result in personal liability and disqualification.

Share transfers require a duly executed instrument of transfer and, for private companies, compliance with pre-emption provisions in the articles; registration of the transfer in the company's register is essential.

A company may create charges over its assets; charges must be registered with the Registrar of Companies within the statutory period, failing which the charge is void against the liquidator and creditors.

Winding up may be compulsory (by court) or voluntary (members' or creditors'); the liquidator realises assets, pays preferential creditors, and distributes the surplus to members.

Partnerships are governed by the Partnership Ordinance; partners are jointly and severally liable for partnership debts, and a partnership is not a separate legal person.

Trusts and foundations: a trustee holds property for beneficiaries and must not profit from the trust; the Trust Ordinance governs the creation and administration of trusts in Sri Lanka.

Marriage in Sri Lanka may be solemnised under the General Marriage Ordinance, the Kandyan Marriage and Divorce Act, or the Muslim Marriage and Divorce Act; the applicable regime determines formalities and consequences.

A valid marriage requires capacity (age, absence of prohibited degrees, no subsisting marriage), consent, and solemnisation before an authorised registrar or religious officiant.

Divorce under the General Marriage Ordinance requires proof of a matrimonial offence (adultery, malicious desertion, incurable insanity) or separation for the statutory period.

Maintenance: a spouse and children may claim maintenance under the Maintenance Ordinance; the court assesses need, means, and conduct of the parties.

Custody of children is decided on the welfare of the child as the paramount consideration; the court may order access and maintenance ancillary to custody.

Kandyan law applies to Kandyan marriages and governs divorce, matrimonial rights, and succession for persons governed by that law; registration of the marriage is essential for proof.

Muslim law governs marriage, divorce, and maintenance for Muslims under the Muslim Marriage and Divorce Act; the Quazi court has jurisdiction over matrimonial disputes.

Legitimacy and affiliation: children born within a valid marriage are presumed legitimate; the presumption may be rebutted by evidence, and the Status of Children Act addresses rights of children born outside marriage.

Intestate succession under the general law follows the order: spouse and children first, then parents, then siblings, then more remote relatives; the surviving spouse takes a share alongside children.

Testate succession requires a valid will executed in the presence of two witnesses who attest in the testator's presence; a will may be revoked by a later will, destruction, or marriage (in some regimes).

The legitima portio (forced share) entitles surviving children and, in some regimes, the spouse to a fixed portion of the estate; a will cannot defeat these forced shares.

Matrimonial property: under the general law, spouses may hold property separately; the Matrimonial Property regime and the Kandyan law provide for community of property in certain marriages.

Kandyan law: on dissolution of a Kandyan marriage, the spouses are entitled to a division of acquired property; the rules differ from the general law and depend on the marriage regime.

Muslim law: inheritance shares are fixed by the Quranic rules; a Muslim may dispose of only one-third of the estate by will, the remainder passing according to the fixed shares.

Probate and administration: probate confirms the executor's authority under a will; letters of administration are granted where there is no executor or on intestacy; notaries frequently prepare these petitions.

Estate duty and succession: the Inland Revenue Act imposes taxes on inheritances in certain circumstances; the notary must consider tax implications when drafting deeds of gift or testamentary instruments.

A notary public is appointed under the Notaries Ordinance (Chapter 107); a notary may attest and prepare deeds, administer oaths, and certify copies within the area of appointment.

A notarial deed must be signed by the parties, the notary, and, where required, witnesses; the notary must record the date, place, and identity of the parties and verify capacity.

The notary must read over and explain the deed to the parties, confirm their understanding, and ensure there is no fraud, duress, or undue influence.

Identity verification: the notary must satisfy themselves of the identity of the parties, typically by national identity card or passport, and record the evidence in the deed or the notary's register.

The notary must maintain a protocol (register of deeds) recording each deed, its date, the parties, and a summary; the protocol is a public record and may be inspected on payment of fees.

Deeds must be executed in the presence of the notary and, where the law requires, two witnesses; witnesses must be competent and not parties to the transaction.

The notary must ensure the deed complies with statutory formalities (e.g. Prevention of Frauds Ordinance for land transfers) and must not attest a deed that is void or unlawful.

Conflict of interest: a notary must not act where they or a close relative has a personal interest in the transaction; they must decline and refer the parties to another notary.

A deed must contain: the names and descriptions of the parties, the recitals, the operative clauses, the consideration, the property description, and the attestation clause with signatures.

The notary must certify that the parties appeared before them, were known or identified, and executed the deed voluntarily; false certification is a disciplinary offence and may amount to a criminal offence.

Professional ethics require independence, confidentiality, and avoidance of conflicts of interest; the notary must not act for both sides in a transaction without full disclosure and informed consent.

The notary must not accept secret commissions or referral fees from third parties; any such payment is a breach of professional conduct and may lead to suspension or removal.

Deeds must be prepared in the language understood by the parties; where a party does not understand the language, an interpreter must be present and the fact recorded.

The notary must keep proper records and accounts; failure to account for client money is a serious disciplinary matter and may constitute theft or criminal breach of trust.

Amendments to a deed must be made before execution and initialled by the parties and the notary; post-execution alterations require a separate notarial instrument.

The notary must not attest a deed where a party lacks capacity (minority, mental incapacity, intoxication); capacity must be verified and recorded.

Notaries are reporting institutions under the Financial Transactions Reporting Act (No. 6 of 2006); they must conduct customer due diligence (CDD) and report suspicious transactions to the Financial Intelligence Unit (FIU).

CDD requires identifying the customer and beneficial owner, verifying identity using reliable documents, and understanding the purpose and nature of the transaction.

Enhanced due diligence applies to politically exposed persons (PEPs), high-risk jurisdictions, and complex or unusually large transactions; the source of funds must be established.

Record-keeping: notaries must retain CDD records and transaction documents for at least six years after the transaction or the end of the business relationship.

Suspicious transaction reports (STRs) must be filed promptly with the FIU; tipping off the customer is prohibited and may constitute a criminal offence.

Cash transactions above the prescribed threshold must be reported; notaries should monitor for structuring (splitting transactions to avoid thresholds).

Office management: maintain a deed register, a cash book, a client ledger, and a receipts book; client money must be held in a separate client account and reconciled regularly.

Staff training and internal controls: notaries must ensure staff are trained on AML/CFT obligations and that there are procedures for identifying and escalating suspicious activity.

Stamp duty is payable on instruments (deeds of transfer, lease, mortgage, gift) under the Stamp Ordinance; the rate depends on the nature of the instrument and the consideration or value.

The notary must ensure stamp duty is paid before or at the time of execution; an unstamped or insufficiently stamped instrument is inadmissible in evidence until duty and penalty are paid.

Capital gains tax applies to the realisation of capital assets, including land and buildings; the notary should advise parties of the CGT implications of a transfer or gift.

Gifts of immovable property may attract gift tax and stamp duty; the notary must consider whether the transfer is a sale, gift, or exchange and apply the correct duty.

Income tax: rental income and business profits are taxable; the notary should ensure the deed accurately reflects the consideration and does not facilitate tax evasion.

Withholding tax obligations may arise on certain payments; the notary should be aware of the Inland Revenue Act provisions relevant to the transaction.

Tax clearance: certain transfers (e.g. of land) may require a tax clearance certificate from the Inland Revenue Department before registration.

The notary must not prepare false or backdated deeds to reduce tax liability; such conduct is a criminal offence and a ground for disciplinary action.

The Notaries Ordinance and the disciplinary rules of the relevant authority govern the conduct of notaries; breaches may lead to suspension, removal from office, or criminal prosecution.

Grounds for disciplinary action include: preparing false deeds, acting with conflict of interest, failing to account for client money, and gross negligence in the preparation of deeds.

A notary must not advertise or solicit clients in a manner that is misleading or contrary to professional dignity; touting is prohibited.

Confidentiality: a notary must not disclose information obtained in the course of professional duties except where required by law or with the client's consent.

The notary must cooperate with investigations by the disciplinary authority and produce records when required; obstruction is itself a disciplinary offence.

Professional indemnity insurance is advisable and, in some jurisdictions, mandatory; the notary is liable in negligence for loss caused by defective drafting or attestation.

A notary must not act as an advocate in a matter in which they have attested the deed; the roles must be kept separate to avoid conflicts.

Continuing professional development: notaries are expected to keep abreast of changes in the law, including amendments to the Notaries Ordinance and tax statutes.