COLOMBO — Sri Lanka's government just published the Protection of Occupants Bill in the official Gazette, and if it passes in its current form, the island nation's rental market could face seismic disruption.
The bill aims to protect tenants from arbitrary eviction—a noble goal in a country still recovering from its worst economic crisis in decades. But property owners warn the law goes too far, creating legal loopholes that could transform tenants into squatters and crash the real estate market.
For Sri Lanka's 22 million people, the question isn't whether tenants deserve protection. It's whether this law protects them—or just makes housing harder to find.
The Law's Radical Provisions
Under the proposed bill, even after a lease expires, landlords cannot ask tenants to leave without going to court. Property owners must continue to pay utilities even if tenants refuse to pay rent. The only way to reclaim a property is through a court order, which in Sri Lanka's overburdened judicial system can take three to four years if contested.
For Ravi Perera, a retired civil servant in Colombo who rents out his family's ancestral home to supplement his pension, the law feels like punishment. "I saved for 30 years to buy that property," he says. "Now the government tells me I can't control my own asset. If a tenant refuses to pay, I still pay electricity, water, everything—and wait years for a judge to help me?"
Property owners like Perera aren't wealthy developers. Many are middle-class Sri Lankans who invested in real estate as a retirement safety net, or families renting out inherited properties to cover taxes and maintenance.
Tenant Perspective: Protection or Overreach?
The bill's supporters argue it addresses a real problem. During Sri Lanka's 2022 economic collapse, many tenants faced sudden evictions as landlords sought higher-paying foreign renters or converted properties to short-term tourist accommodations. Families with children were given days to vacate, with nowhere affordable to go.
Nisha Fernando, a single mother renting a small apartment in Dehiwala, remembers that fear. "My landlord threatened to double my rent overnight because he knew tourists would pay more," she recalls. "I work two jobs. Where would I find double the rent in a week?"
For tenants like Fernando, the law offers security. But even she worries about unintended consequences. "If landlords stop renting because they're afraid of bad tenants, where will people like me live? Rents are already too high."
Market Implications
Real estate analysts warn the bill could trigger several cascading effects:
• Fewer rentals available: Property owners may choose to leave units vacant rather than risk losing control for years • Higher rents: Landlords who do rent will charge premium rates to offset risk, pricing out middle-income families • More disputes: Vague language in the bill could lead to protracted legal battles that clog courts • Foreign investment decline: International investors considering Sri Lanka's recovering real estate market may balk at laws that heavily favor tenants
Similar policies in other South Asian countries offer cautionary tales. India's rent control laws, enacted decades ago with good intentions, are widely credited with reducing rental housing supply in major cities and encouraging informal, unregulated rental agreements that leave both parties vulnerable.
Pakistan has seen landlords convert rental properties to commercial use or leave them vacant to avoid tenant-landlord disputes that can drag through courts for decades.
Post-Crisis Policy Tradeoffs
Sri Lanka is still navigating recovery from its 2022 economic meltdown, which saw inflation spike above 70 percent, foreign reserves nearly depleted, and widespread shortages of fuel, medicine, and food. The crisis exposed deep vulnerabilities in how ordinary Sri Lankans afford housing, healthcare, and basic necessities.
Policymakers face a genuine dilemma. Tenants need protection from exploitation, especially in a recovering economy where incomes haven't caught up to pre-crisis purchasing power. But landlords also need confidence that property rights will be respected, or they'll exit the rental market entirely.
The bill is being marketed as tenant protection, but critics say it creates squatters rather than secure renters. The difference matters: secure renters have reliable, affordable housing and legal protections against unfair eviction. Squatters live in legal limbo where neither party has clear rights, courts are overwhelmed, and the housing market contracts.
Regional Context
Across South Asia, housing policy reflects tensions between socialist-era protections and market-driven growth. India has gradually liberalized rent control in some states, with mixed results. Bangladesh has minimal tenant protection, leaving renters vulnerable but keeping supply high. Nepal relies heavily on informal rental agreements that avoid legal systems altogether.
Sri Lanka's challenge is finding a middle path: protecting tenants without destroying landlords' willingness to rent. The current bill may overshoot.
As the bill moves through Sri Lanka's parliament, both Ravi Perera and Nisha Fernando are watching nervously. He worries he'll lose control of his retirement asset. She worries she'll lose access to affordable housing.
For 22 million Sri Lankans recovering from economic catastrophe, the question is simple: will this law help them find stable housing, or just make a bad situation worse?
