Secured Transactions Act 2024 · As enacted · Part V · Priorities
40. Security right in fixtures
Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.
Official translationFrom Department of Government Printing, unchanged
A security right in goods that attached-
before the goods became a fixture, shall have priority as to such fixture, over the claim of any person who has an interest in the immovable property; or
after the goods became a fixture, shall have priority as to the fixture over the claim of any person who subsequently acquired an interest in the immovable property, but not over any person who had a registered interest in the immovable property at the time the security right in the goods attached and who has not consented in writing to the security right or disclaimed an interest in the fixture.
A security right referred to in subsection (1), shall be subordinate to the interest of-
a subsequent purchaser for value of an interest in the immovable property; or
a creditor with a prior encumbrance of record on the immovable property, to the extent that the creditor makes subsequent advances, if the subsequent purchase or the subsequent advance under a prior encumbrance of record is made or contracted without the knowledge of the security right and prior notice of it being registered in accordance with Chapter III of the Registration of Documents Ordinance (Chapter 117).
Where a secured party has an interest in a fixture that has priority over the claim of a person having an interest in the immovable property, the secured party may, on default and subject to the provisions of this Act relating to default, remove the fixture from the immovable property if, unless otherwise agreed, the secured party reimburses any person having an encumbrance or the owner of the immovable property who is not the debtor, for the cost of repairing any physical injury, excluding diminution in value of the immovable property, caused by the absence of the fixture or by the necessity for replacement.
A person who is entitled to any reimbursement under subsection (3) may refuse permission for the removal of the fixture, until the secured party has given adequate security for the reimbursement.
A secured party who has the right to remove a fixture from an immovable property shall serve on each person whose name appears in the records maintained by the relevant
Land Registry Office as having an interest in such immovable property, a notice in writing of the secured party’s intention to remove the fixture. Such notice shall contain the following information:-
the name and address of the secured party;
a description of the fixture to be removed, which is sufficient to enable it to be identified;
the amount required to satisfy the obligation secured by the security right of the secured party;
a description of the immovable property to which the fixture is affixed, which is sufficient to enable the immovable property to be identified; and
a statement of the intention to remove the fixture unless the amount secured is paid on or before a date specified in the notice, which date shall be not less than ten days after the service of the notice.
The notice referred to in subsection (5) shall be served, by sending the same by registered post, to the address of the person to be notified as it appears in the records of the appropriate Registry, or in the case of a company, at its registered office or to the address of an attorney authorized to accept any notice on its behalf.
A person having an interest in any immovable property that is subject to a security right in a fixture may, before such fixture has been removed from such property by the secured party in accordance with the provisions of subsection (3), retain the fixture, upon payment to the secured party of the amount owing in respect of the security right having priority over such person’s interest.
Part VI
Registration
Part VII
General Provisions
Part VIII
Repeals and Savings
Part IX