Purchasing a property in the Cayman Islands is generally a straightforward process.
It is important, however, to have the necessary expertise on hand to deal with any unforeseen eventualities should complications arise.
These can be dealt with by a realtor or an attorney who practices real estate law, who can make the purchasing process relatively painless.
Once a particular property has been chosen your realtor will normally prepare an offer to purchase which may or may not have special conditions.
At this stage it is generally helpful to have your attorney look over the offer and/or prepare a formal contract. Once the contract has been accepted by the vendor then the attorney will normally liaise with the vendor’s attorney and/or representatives to prepare for closing of the transaction.
There are a number of steps that need to be undertaken in order to protect the purchaser, which will generally include the attorney making an inquiry on the property, searching the title to see that it is clear of encumbrances and also clarifying the position if you are purchasing a condominium with the management of the strata corporation.
If you are purchasing a property that is occupied by a tenant or someone other than the owner, then it will be necessary to ascertain whether there will be vacant possession at closing or whether the purchase will purchase the property with the benefit of a tenancy agreement and/or lease.
In addition, all expenses and revenue of the property will have to be prorated and as will the utilities and these will need to be transferred over to the new owner with an adjustment for any deposits.
Prior to closing, your attorney will provide you with a statement detailing the monies that will be required in order to transfer title.
This will normally include not only the balance of the purchase price, any prorations that have been calculated together with the government fees, which include a payment for stamp duty on the transfer of the land.
At closing the vendor and purchaser’s representatives will exchange duly executed Transfer of Land forms together with any Discharge of Charge forms if there is a bank loan for the payment of the balance of the purchase price. Thereafter, the transfers will be lodged at the Cayman Islands Land Registry together with the appropriate amount of stamp duty and land registry fees in order for the title to be registered in the purchaser’s name.
Cayman Islands real estate terminology:
Offer to Purchase/Contract: This is the document by which a vendor and purchaser agree to transfer a specific property and at what price.
Caution: This is a land registry document which after a contract and/or offer to purchase is signed can be regis-tered against the title in order to show the purchaser’s interest in the title of the property.
Stay of Registration: This is a document which is commonly used to protect the purchaser’s interest and should be registered prior to closing. It gives the purchaser and/or their representatives time to register the purchaser’s interest in priority to any other potential claims and/or interests in the specific title of the property.
Proration: This is a mathematical calculation of monies due and owing at a certain date between the vendor and purchaser strata title. Most apartments in the Cayman Islands are governed by the Strata Titles Registration Laws. The strata corporation in the unincorporated body that holds the common property and its management runs the apartment complex on behalf of the various owners.
Charge: This is a document registered against a title showing that a loan has been taken out by the registered proprietor. A purchaser’s representative will ensure that the charge is discharged at closing.