The construction industry plays a major role in the economy of a country. Therefore, the development of the construction industry mainly depends on the effect of the legal system of the country as well. The Environmental and Physical Planning Laws are the main two types of legal areas that affect the construction industry. Further, the problems or conflicts in the aforementioned law areas had become a reason to create disputes in the construction industry. Accordingly, the main aim of this research is to evaluate the applicability of the specific Laws and Regulations which are considered under by Environmental Law and Physical Planning Law relating to the Construction Industry of Sri Lanka. To attain the aim, an extensive literature synthesis was conducted to identify the problematic and conflicting areas in the existing Environmental and Physical Planning Law. Moreover, literature sources related to international environmental and physical planning law context were brought into the picture to recognize the potential solutions and the recommendations for the proper implementation of said Laws. Accordingly, problematic areas in the construction project licensing process, review of the power factor of the UDA regulations were identified as critical factors for a successful legal implementation. Conclusions had presented the impression that how the existing said law areas would affect the construction issues related to the Sri Lankan context.