Real Estate

Introduction

Title to real estate in the Cayman Islands is evidenced by

registration at the Cayman Islands Land Registry where parcel

files are open to public inspection. Registration is of title

rather than of transactions but some information on previous

transactions will be available in the parcel files kept for

each title.

Real estate is held as freehold, leasehold or under a strata

title:

a freehold title is held by the registered proprietor

indefinitely;

a leasehold title is held by the registered proprietor

for the term of the lease;

the Strata Titles Law (2005 Revision) provides for the

subdivision of land to create strata lots, each of which is

registered as a separate strata title (which is held by the

registered proprietor indefinitely). Strata titles are also

used for office buildings, shopping centres, but most

commonly for residential condominium developments.

A major advantage of this system is that all registered

absolute titles are effectively guaranteed by the Cayman

Islands Government and title insurance is therefore not

commonly used and generally not available.

Ownership Requirements

There is generally no restriction on foreign ownership of

real estate in the Cayman Islands but there are legal

restrictions designed to protect local businesses which have

the effect of restricting foreign investment in commercial real

estate. The following restrictions apply:

a foreign company wishing to purchase or lease real

estate must be registered at the Companies Registry as a

foreign company;

any foreign company or Cayman company which is foreign

controlled wishing to own an income producing real estate

investment must be licensed under the Trade and Business

Licensing Law (2007 Revision) and the Local Companies

(Control) law (2007 Revision);

any foreign company or Cayman company which is foreign

controlled wishing to take a lease of premises to carry on a

business from those premises must obtain a licence under the

Trade and Business Licensing Law (2007 Revision) and Local

Companies (Control) Law (2007 Revision).

On registration at Companies Registry a foreign company or

Cayman company which is foreign controlled can own, occupy and

give security in respect of real estate provided its memorandum

and articles of association permit it to do so.

Registration Of Title

All land in the Cayman Islands is identified and numbered

and a public record sheet relating to it is kept at the Land

Registry.

The land register for a parcel of land or lease and all

documents mentioned on it or contained in the parcel file are

open to public inspection and indicate:

whether the title is absolute or provisional;

whether the land is private or crown land;

the name and address of the owner;

details of any matters to which the land is subject;

and

the size (acreage) of the land.

The system enables actual registration of a title or other

interest in land to be reasonably straightforward. However, the

precise terms of any real estate transaction are very important

and are almost always incorporated in a detailed written

contract, which is usually prepared by the parties'

attorneys, and signed by the parties.

We will be pleased to draft such contracts for clients and

we would always strongly recommend that we be consulted by

clients before signing any such contract whoever it has been

prepared by. A typical real estate purchase would involve an

initial sales agreement (usually prepared by the attorney for

the seller) being signed by the parties with the buyer paying

an initial deposit (usually 10%) towards the purchase price.

This would be followed by a closing at a mutually agreed date

when a transfer of title document will be handed over to the

buyer's attorney in exchange for the remainder of the

purchase price. The transfer of title document is registered at

the Land Registry (usually by the purchaser's attorney

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