Commercial real estate in the Cayman Islands: overview

A Q&A guide to corporate real estate law in the Cayman Islands.

The Q&A gives a high level overview of the corporate real estate market; real estate investment structures, including REITs; title; tenure; sale of real estate; seller's liability; due diligence; warranties; real estate tax and mitigation, including VAT and stamp duty/transfer tax; climate change targets; restrictions on foreign ownership; real estate finance; leases; planning law; and proposals for reform.

To compare answers across multiple jurisdictions, visit the Corporate Real Estate Country Q&A tool

This Q&A is part of the multi-jurisdictional guide to corporate real estate law. For a full list of jurisdictional Q&As visit


The corporate real estate market

1. What have been the main trends in the real estate market in your jurisdiction over the last 12 months? What have been the most significant deals?

The real estate market in the Cayman Islands continues to show sign of recovery and growth, due no doubt in part to the continued economic recovery in the US.

In February 2014 a new privately owned 140 bed hospital, Health City Cayman Islands, opened its doors in the eastern part of Grand Cayman. This opened up opportunities for further development of residential and commercial facilities, capitalising on the proximity to the new facility in this largely undeveloped part of the island.

The government continues with its plan to develop a new cruise ship berthing facility in the capital George Town, with the intent to proceed using a public private partnership (PPP) model.

Dart Realty continues to expand its self-sufficient town known as Camana Bay which includes Cayman International School, a commercial centre. This includes offices housing tenants such as Ernst & Young, Goldman Sachs, Cayman National, Citco, Digicel, State Street, London and Amsterdam, Aon and the law firms Ogier and Mourant Ozannes. The development also includes a cinema complex with six cinemas. A new three storey office building is nearing completion. There is a large amount of construction currently taking place and also planned for the future.

Construction of what will be the Kimpton Hotel and Residences (the first ten-storey building in the country) on Seven Mile Beach is well under way, with completion expected in 2016.

New hotels in the planning and development phase include a Conrad Hotel and Residence in Beach Bay on Grand Cayman.


Real estate investment

2. What structures do investors typically use for real estate investment in your jurisdiction and what are the main advantages and disadvantages of each (for example, flexibility and tax transparency)?

Common structures

The structures most commonly used are corporate structures.


REITs and real estate derivatives from Cayman Islands real estate are generally unavailable and are not commonly used.

Institutional investors

Institutional investment in the Cayman Islands is increasing, as the size of projects require large amounts of capital. However, at least two-thirds of commercial real estate is held privately.

Private investors

See above, Institutional investors.

Advantages and disadvantages

Because the Cayman Islands is a no-direct taxation jurisdiction, and real estate investment activities can be conducted though different structures, foreign investors are free to select their investment model based on factors (for example, taxation and investment regulation) not driven by Cayman regulation, except where participation may be marketed in the Cayman Islands.

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 effectively restrict foreign investment in commercial real estate (see Question 4).

However, foreign nationals willing to persevere will usually be granted the necessary licences, provided the investment is substantial. As the Cayman Islands is geographically quite small, investment opportunities are limited.

3. What are the main sources of finance and types of investors for real estate investment in your jurisdiction? Does your government encourage overseas investment into real estate in your jurisdiction, for example through real estate investment legislation?

Typically, investment in real estate in the Cayman Islands is by private companies and individuals, using either local or foreign financing.

There is no legislation directed at real estate investment which either encourages or discourages such investment. There are laws aimed at protecting local businesses that contain licensing requirements which can affect foreign ownership and operation of commercial real estate interests (see Question 4).

Restrictions on foreign ownership or occupation

4. Are there restrictions on foreign ownership or occupation of real estate (including foreign ownership of shares in companies holding real estate)? Are there restrictions on foreign guarantees or security for ownership or occupation and on lending for the purchase of real estate?

The following restrictions apply:

  • A foreign company wishing to purchase or lease (or otherwise hold an interest in) real estate in the Cayman Islands must be registered at the Cayman Islands Companies Registry as a foreign company.

  • Any foreign company, or Cayman company which is foreign controlled, wishing to own and rent out commercial real estate 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 the Local Companies (Control) Law (2007 Revision).

  • Any foreign company or Cayman company which is foreign controlled wishing to own and rent out more than two residential properties must be licensed under the Trade and Business Licensing Law (2007) and the Local Companies (Control) Law (2007 Revision).

  • An exempted company must obtain the approval of the Minister of Finance to hold land in the Cayman Islands.

On registration at the Companies Registry, a foreign company or Cayman company which is foreign controlled can give guarantees or security in relation to real estate, in relation to ownership or occupation, provided its constitutional documents allow it to do so.


Title to real estate

5. What constitutes real estate in your jurisdiction? Is land and any buildings on it (owned by the same entity) registered together in the same title, or do they have separate titles set out in different registers?

Real property includes:

  • Land.

  • All things growing on the land.

  • Buildings.

  • Other things permanently affixed to the land.

Title to land and any buildings on it (if owned by the same entity) are registered together. However, by using the Strata Titles Registration Law, separate lots can be created on the land and within the building, and separate titles are issued for these strata lots. Separate leasehold titles can also be created through leasing structures of land and/or buildings.

6. How is title to real estate evidenced? What is the name of the public register of title and the authorities responsible for managing it? Is electronic access and electronic conveyancing available?

Title to real estate is evidenced by registration at the Cayman Islands Land Registry (Land Registry), where land parcel files are open to public inspection. The Registrar of Lands manages the public register.

Individual parcel registers can be searched and obtained online. There is no electronic conveyancing available as yet but the ministry responsible is pursuing the automation of the Land Registry system.

7. What are the main information and documents registered in the public register of title? Can confidential information or documents be protected from disclosure in the public register of title?

The land register for a parcel of land or lease indicates:

  • Whether title is absolute or provisional.

  • Whether title is freehold or leasehold.

  • Whether the land is private or crown land.

  • The area of the land (where the land has been surveyed).

  • The name and address of the owner(s).

  • Details of any matters to which title is subject and any encumbrances affecting the land.

  • Details of any matters of which the title has the benefit.

Relevant documents that are registrable include:

  • Transfers of land and transfers of leases.

  • Stays of registration.

  • Charges, cautions, restrictions and inhibitions.

  • Third party rights, including easements and restrictive covenants.

  • Leases where the term is more than two years (leases for two years or less can be registered voluntarily). If leases are registered then any variations of those leases also need to be registered.

There is a separate register for leasehold interests and a note of the lease is made in the encumbrances section of the land register for the freehold title.

The land register and all documents mentioned in it or contained in the parcel file are open to public inspection and copies are available for purchase.

8. Is there a state guarantee of title? Is the authority that manages the public register liable to pay compensation for any errors it makes in relation to title registration? Is title insurance available and is it commonly used?

The state guarantee is that any proprietor who suffers loss arising from a register error which cannot be rectified is entitled to compensation from the Cayman Islands government.

Title insurance is not commonly used and is not generally available. However, large institutional lenders sometimes insist on title insurance in large financing transactions, and obtain it in the US to cover larger commercial developments.

9. How can real estate be held (that is, what types of tenure and other main ownership rights exist over land)?

Real estate is held as:

  • Freehold. A freehold title is held by the registered proprietor indefinitely.

  • Leasehold. A leasehold title is held by the registered proprietor for the term of the lease.

  • Strata title. The Strata Titles Registration Law (2005 Revision) provides for the subdivision of freehold and leasehold interests in land to create strata lots, each of which is registered with a separate strata title (which is held by the registered proprietors indefinitely). Strata titles are used for office buildings and shopping centres, but most commonly for residential condominium developments.

A contractual licence can also be used to allow occupation of land, but this is a personal right and does not create an interest in the land.


Sale of real estate

Preliminary agreements

10. What types of preliminary agreements are typically used in the sale of real estate? Are they legally binding?

Commonly used pre-contractual arrangements include letters of intent, heads of terms and pre-contract enquiries. Typically letters of intent or heads of terms will contain some binding provisions (such as an exclusivity period and confidentiality) but will not bind parties to proceed to a sale.


Sale contract

11. Briefly outline the typical main provisions of a corporate real estate sale contract and main real estate provisions of a typical share purchase agreement.

The format of agreements used to buy and sell commercial real estate varies widely. Typically, they contain provisions dealing with:

  • Basic commercial terms. Price, deposit, closing date, due diligence period, and conditions to sale.

  • Representations and warranties. Seller warranties are typically limited and depend on the nature of the seller and the property, but will include good title, due authorisation, no third party rights or interests and accuracy of replies to pre-contract enquiries.

  • Closing mechanics. Deliveries, timing, and preparation of transfer documents.

  • Rights on default. If either party fails to complete, there is typically provision for a seven or ten day completion notice to be served by the other party, making time of the essence. Remedies will include forfeiture/return of deposit, with or without interest, and generally all other legal remedies are preserved (specific performance, damages, and so on).


Due diligence

12. What real estate due diligence is typically carried out before an acquisition and what key areas does it cover? Which documents are typically reviewed? Which specialist advisers are usually involved and which reports do they typically produce?

The primary source of information on title is the land register for the property to be acquired.

A buyer usually obtains:

  • A copy of the land register and registry map extract for the property.

  • A copy of the registered strata plan and the bye-laws if a strata property.

  • Copies of any instruments registered on title which are considered relevant to the buyer, such as:

    • easements;

    • cautions, restrictions or inhibitions;

    • planning restrictions; and

    • restrictive covenants.

Public records relating to real estate are relatively limited.

Unless the buyer proposes a new use for the real estate, due diligence is typically limited to title.

Depending on the nature of the property, architectural drawings may be requested, and a satisfactory structural survey, by an expert chosen and paid for by the buyer, is often a condition to the purchase.

A buyer usually raises some pre-contract enquiries in respect of the property to be acquired and it may also undertake proposed road searches, zoning and other planning searches and compulsory acquisition order searches.


Sellers' warranties

13. What real estate warranties are typically given by a seller to a buyer in the sale of corporate real estate and what areas do they cover? What are the main limitations on warranties, for example are they typically qualified by disclosure?

Warranties are always subject to negotiation, but on the sale of an individual commercial property, the seller generally gives limited warranties concerning:

  • Title.

  • Third party interests.

  • The accuracy of replies to pre-contract enquiries.

More wide-reaching warranties are normally required for the sale of an ongoing business.

Share sales are not typically used in commercial real estate transactions, as there are generally no benefits to a buyer of proceeding that way.



14. Does a seller have any statutory or other liability to the buyer in a disposal of real estate?

The seller does not have statutory liability in a real estate disposal. However, liability may arise contractually, and remain with the seller on closing of the sale.

15. Briefly outline the environmental legislation and potential liability for a buyer in a purchase of real estate. Is it common to carry out environmental surveys and searches and to obtain environmental insurance? How is environmental liability typically dealt with in the sale contract?

The only environmental legislation that might specifically impact a buyer of real estate is the National Conservation Law 2013, the main provisions of which have not yet been proclaimed in effect.

The National Conservation Law 2013 establishes a council whose role will be to promote the conservation of natural resources, including preservation of wetlands and wetland resources and conservation of wildlife. The law provides for the creation of protected areas.

Once fully in effect, developers will need to consider any potential effect this law might have on development plans.

16. Can an owner or occupier inherit liability for other matters relating to the real estate even if they occurred before it bought or occupied it? Can a seller or occupier retain any other liability relating to the real estate after it has disposed of it?

It is technically possible in certain limited circumstances for an owner or occupier to be liable for matters relating to the real estate before it bought or occupied it, such as a continuous creation of an action for nuisance. Otherwise, the English rules of privity of contract apply. In addition, the buyer of a strata title lot can be liable for unpaid strata levies/assessments after acquiring the lot, as this debt attaches to the strata lot.

A seller or occupier does not generally have any liabilities relating to the real estate after it has disposed of it. This is subject to any contractual provisions to the contrary.


Completion arrangements

17. What are the typical arrangements and main documents required for completion of the sale? When does title transfer and what are the formal legal requirements to execute the sale documents, transfer the real estate and register the change of title? Is notarisation required?

Typically a completion meeting will be set for the completion date, at which time the balance of purchase funds are exchanged for transfers of land or transfers of lease for the relevant parcel or parcels. The transfer of land or transfer of lease is the only formal document required to pass title.

Legal title transfers on registration of the transfer of land or transfer of lease at the Land Registry, which typically takes between one and four weeks. The buyer will take possession and equitable ownership at the time of completion.

The transfer of land or lease must be executed by the transferor and transferee, and all signatures notarised. Companies sign by two directors or one director and the secretary, or by an authorised signatory, in which case the resolution appointing the signatory must be filed with the transfer.

For the time between exchange of contracts and completion, the seller is typically permitted to carry on its business, but is generally responsible for any damage to the property beyond normal wear and tear.


Real estate tax

18. Is stamp duty/transfer tax (or equivalent) payable on the purchase of real estate? Who pays, what are the rates and are there any exemptions? Does it apply to the transfer of shares in a company holding real estate and at what rate?

Stamp duty

Stamp duty is payable (subject to certain exemptions) on:

  • The transfer of land.

  • The transfer or grant of a new lease.

  • Any agreement or memorandum of agreement for the purchase of land or strata title, and the assignment of any rights under such an agreement.

  • A debenture or legal charge of land.

The buyer generally pays the stamp duty in relation to an acquisition of freehold or leasehold real estate. The tenant usually pays stamp duty for the grant of a lease. However, this is negotiable between the parties.

The current rates of stamp duty payable on a transfer of land, a strata title or lease is typically 7.5% but can vary from 0% to 7.5%, depending on:

  • Whether the buyer is a Caymanian citizen.

  • The location of the real estate.

  • The value of the real estate.

The duty is paid on the consideration stated in the instrument of transfer or the market value of the property conveyed or transferred, whichever is the higher, irrespective of any mortgage, charge, lien or other encumbrance to which the property is subject.

The current rates of stamp duty payable on a lease or lease agreement are:

  • If the term is for less than one year: 5% of the aggregate rent.

  • If the term is one year or more, but does not exceed five years: 5% of the average annual rent.

  • If the term exceeds five years, but does not exceed ten years: 10% of the average annual rent.

  • If the term exceeds ten years, but does not exceed 30 years: 20% of the average annual rent.

  • If the term exceeds 30 years: the same duty as on a sale based on the full market value of the real estate or interest in it.

If the rent in the lease is less than market value, for the purposes of calculating the stamp duty, the average annual rent will be declared at the market value having regard to any premium charged.

Stamp duty is also payable on any mortgage (legal or equitable) or charge on immovable real estate at the rate of 1% or 1.5% of the sum secured, depending on the secured sum.

An agreement or memorandum of agreement for the purchase of land or strata title may be stamped with a minimal fixed stamp duty or with ad valorem stamp duty (that is, the amount paid is proportionate to the value of the asset), depending on whether the agreement confers or grants a right of possession or the right to receive rent or income. If the agreement confers or does not specifically prevent any right of occupation or confers the right to receive income, ad valorem duty is payable. Where full ad valorem stamp duty is paid on the agreement or memorandum of agreement, no additional duty will be payable on the subsequent transfer, provided the transfer has been executed in conformity with the agreement, and relates to the same real estate as the agreement.

If there is an assignment of any rights of an agreement or a memorandum of agreement relating to the purchase of any land or strata title then, depending on the terms of the assignment, varying, fixed or ad valorem stamp duties are payable.

There are a few exemptions, which include transfers:

  • For natural love and affection between certain family members.

  • To successors entitled under an estate.

  • Which do not bring about any change in beneficial ownership.

However, all stamp duty exemptions and waivers are at the discretion of the Minister of Finance.

Share transfer tax

Share transfer tax is also payable on the transfer or issue of equity capital in a land holding company (Land Holding Companies Share Transfer Tax Law (2007 Revision)).

19. Are any methods commonly used to mitigate real estate tax liability on acquisitions of large real estate portfolios? What is the general approach of the tax authorities in your jurisdiction to such schemes?

Methods are not commonly available or used to mitigate real estate tax liability on acquisitions of large real estate portfolios.

The Cayman Islands market is not substantial enough to have large real estate portfolios similar to those in the UK or other large jurisdictions.

20. Is value added tax (VAT) (or equivalent) payable on the sale or purchase of real estate? Who pays? What are the rates? Are there any exemptions?

The Cayman Islands has no equivalent to VAT.

21. Are municipal taxes paid on the occupation of business premises? Are there any exemptions?

No taxes are payable on the occupation of business premises.


Climate change issues

22. Are there targets or incentives to reduce greenhouse gas emissions from buildings in your jurisdiction? Is there legislation requiring buildings to meet certain minimum energy efficiency criteria?

There are no targets to reduce greenhouse gas emissions or legislative requirements for energy efficiency, although some companies establish their own environmental policies.

23. Are provisions relating to the energy efficiency of buildings commonly included in contracts for the sale of real estate or in leases (for example, green leases)?

Such provisions are not common in the Cayman Islands.


Real estate finance

Secured lending involving real estate

24. Briefly outline the typical security package required by lenders in relation to real estate lending. How are the most common forms of security interest relating to real estate created and perfected (that is, made valid and enforceable)?

The typical forms of security required are:

  • Legal charges registered against land.

  • Debenture (corporate borrower only).

  • Guarantees from shareholders or related companies.

  • Legal or equitable charges over shares in a company that holds land.

  • Assignment of rental income.

  • Assignment of insurance proceeds.

  • Deed of waiver.

Legal charges over property must be registered on the title for the land at the Land Registry, and charges over shares are recorded on the register of shares for the land holding company. Stamp duty is payable ad valorem on the primary security document (debenture or legal charge), with nominal duty payable on collateral documents.

An assignment of rental income is usually created by deed and notice of the assignment must be given to the tenant to perfect the security.

A deed of waiver is usually created by deed.

25. What other real estate related measures do lenders typically take to protect themselves against default by the borrower?

Commercial real estate lenders typically include financial covenants and reporting conditions, with failure to meet targets constituting an event of default. Guarantors may be obligated to cover any debt-service shortfalls.

26. Can lenders incur environmental liability? What measures do lenders typically take to manage potential environmental liability?

There are no statutory provisions that shift any environmental liability on to a lender. Where a lender takes possession of premises after a default, there is potential liability for the lender in any civil action for an environmental harm that occurred during the term of the lender's possession.

Lender need to assess the possibility of any environmental liability prior to taking any action that could make them a mortgagee in possession.

27. Briefly outline the main remedies for lenders in relation to the secured real estate if the borrower defaults on the loan. What is the effect of the borrower's insolvency on the lender's remedies?

The easiest remedy is typically the assignment of rents, which may be adequate if the rents will service the indebtedness. However, when a borrower defaults there is often an inadequate income stream from the property.

Most commercial lending facilities include receivership provisions allowing the lender to take over management of the property or the company, with a view to increasing cash flow or preparing or preserving the property for a sale.

The ultimate remedy for lenders on default by a borrower is exercise of the power of sale, which is governed by the Registered Land Law 2003. Public auction is the statute-sanctioned method of sale. The courts have ruled that offering a property for sale on the local Multiple Listing System (MLS) system satisfies the requirement for a public auction, so in a typical default situation no court proceedings are necessary to dispose of the security.

28. Briefly outline key additional issues for lenders in relation to construction and development projects.

Typically, lending on construction or development projects will involve taking the real estate as security, and advancing funds in stages on the basis of surveyor reports. Developments are typically completed using a combination of financing and buyer deposits on pre-construction sales agreements, which may require additional monitoring of pre-sales and contractual deadlines.

Security documents will typically contain step-in rights by way of receivership provisions which allow a lender to take control of a project after default.


Other real estate financing techniques

29. Are other real estate finance techniques commonly used in your jurisdiction? For example, real estate securitisation and sale and leasebacks.

Real estate securitisation is only used in a limited number of resort developments. Sale and leaseback is not common, possibly in part due to the high level of tax (stamp duty) that would be payable on the transaction.


Real estate leases

Negotiation and execution of leases

30. Are contractual lease provisions regulated or freely negotiable? Which legislation applies?

Rents and lease terms are freely negotiable. However, certain covenants by the landlord and by the tenant are implied in a lease by sections 52 and 53 of the Registered Land Law (2004 Revision) unless otherwise expressly provided in the lease.

31. What are the formal legal requirements to execute a lease? Does the lease have to be executed by certain parties or as a deed? How do the formalities differ for a company, partnership and for individuals?

If the term of the lease is for more than two years, it must be executed in triplicate and the signatories to the lease must sign the lease before a notary public who must complete the certificate of identification on the reverse of the lease front sheet and affix his notarial seal. The notary public must also state the date his commission expires. If the parties are not known to the notary, then a witness must also appear before the notary and identify the signatories to the notary, or the notary must record details of identification inspected.

The formal requirements apply whether the parties are individuals or companies. As partnerships are not recognised as legal entities they must contract through their partners, being companies or individuals.

There are no particular formal legal requirements for the execution of a lease for a term of less than two years.


Rent payments

32. How are rent levels usually reviewed and are there restrictions on this? Is stamp duty and VAT (or equivalent) payable on rent? Is a rent security deposit required and does it have to be managed in a certain way?

There are currently no statutory restrictions on rent levels. Rent levels are typically reviewed in line with the consumer price index (CPI), by a fixed percentage or by market review. VAT is not payable in the Cayman Islands.

Security deposits are a matter of contract, governed by the terms agreed to by the parties.


Length of term and security of occupation

33. Is there a typical length of lease term and are there restrictions on it? Do tenants of business premises have security of occupation or rights to renew the lease at the end of the contractual lease term?

A lease term of five years is most common. There are no restrictions on the lease term although a lease of more than 30 years is treated as a conveyance for stamp duty purposes (see Question 18, Stamp duty).

Tenants of business premises do not have security of occupation, or rights to renew the lease at the end of the contractual lease term, unless those rights are expressly set out in the lease. However, where a tenant, having lawfully entered into occupation of any premises continues to occupy those premises with the consent of the landlord after the termination of the lease, the tenant will be deemed to be a tenant holding the premises on a periodic tenancy on the same conditions as those of the expired lease so far as those conditions are appropriate to a periodic tenancy.



34. What restrictions typically apply to the disposal of the lease by the tenant? Can the tenant assign or sublet the lease with the landlord's consent? Can tenants share their premises with companies in the same group? What is the effect of a legal reorganisation or transfer/sale of the tenant on the lease and on a guarantee of the lease?

The tenant can usually assign the lease or sublet the premises with the landlord's prior consent, which cannot usually be unreasonably withheld or delayed where criteria (such as ability to comply with the head lease) are met.

Sharing of premises with related companies is generally provided for in commercial leases. Landlord consent (not to be unreasonably withheld) is generally required to a change of ownership of a corporate tenant. Release of guarantees must be negotiated.

35. Does a landlord or tenant retain any liability under the lease after the lease is assigned?

If a landlord sells the leased premises, the landlord will generally have no residual liability under the lease.

A tenant may continue to have liability under a lease, depending on the terms of the lease and the landlord's willingness to accept a new tenant.


Repair and insurance

36. Who is usually responsible for keeping the leased premises in good repair and for insuring the leased premises? Are there provisions for the ownership of lease improvements?

The tenant is usually responsible for keeping the non-structural components of the leased premises in good and substantial repair, and the landlord is usually responsible for keeping the structure in good repair.

The landlord is usually responsible for insuring the leased premises, and the tenant usually contributes to the insurance costs through its rental payments or through the recovery by the landlord of common area maintenance.

Leasehold improvements generally revert to the landlord on termination unless specifically agreed otherwise.


Landlord's remedies and termination

37. What remedies are available to a landlord for a breach of the lease by the tenant? On what grounds can the landlord usually terminate the lease and what restrictions and procedures apply? What is the effect of the tenant's insolvency under general contract terms and insolvency legislation?

The landlord can generally terminate the lease if the tenant has breached a fundamental or essential term of the lease (these terms are usually specified in the lease). The landlord must first give the tenant written notice of the breach and allow the tenant an opportunity to remedy the breach within a reasonable time, failing which the landlord can terminate the lease. The tenant has a statutory right to apply to the court under the Registered Land Law (2004 Revision) for relief against forfeiture.

Lease terms usually allow a landlord to terminate the lease if the tenant becomes insolvent. A landlord also has a statutory right to terminate the lease if the tenant is adjudicated as bankrupt (in the case of an individual) or goes into liquidation (in the case of a company).

38. Can the tenant withhold rent payments in certain circumstances, for example for serious damage to the leased premises? Can the tenant terminate the lease in certain circumstances?

It is not uncommon for commercial leases to contain clauses for abatement of rent or part of it in the event of damage to premises that render the premises or part of them unusable. The landlord and the tenant may have termination rights in certain circumstances, following substantial damage to the premises (for example, where there is major damage following a hurricane and the landlord elects not to rebuild or reinstatement of the building is not possible).

The tenant can terminate the lease on common law contractual principles if the landlord is in breach of a fundamental or essential term of the lease. The tenant can also terminate the lease if there is an express right to break the lease. Express termination rights for a breach by the landlord are not usually specified in the lease.


Planning and development controls

39. In what circumstances can local or state authorities purchase business premises compulsorily? Is the purchase price market value?

The Cayman Islands government can compulsorily acquire any land. This is normally the result of establishing new public roads, but can also be done in other circumstances. Compensation is payable, and is generally at the property's market value.

40. What authorities regulate planning control and which legislation applies? Is there specific protection for special categories of buildings such as historic buildings?

The following pieces of legislation provide control mechanisms in connection with the development of land:

  • The Development and Planning Law (2011 Revision).

  • The Development and Planning Regulations (2006 Revision).

  • The Development Plan 1997.

The Development and Planning Law (2011 Revision) also establishes a Central Planning Authority for Grand Cayman and a Development Control Board for the Sister Islands (Cayman Brac and Little Cayman). These statutory authorities:

  • Review and consider applications to obtain planning permission for development.

  • Take enforcement actions where necessary.

41. What planning consents are required for building works and the use of a building?

Planning permission is required for any development of land or change of use. Development of land includes:

  • Carrying out building, engineering or other operations in, on, over or under any land.

  • Materially changing the use of any land or the use of any building on the land.

  • Sub-dividing land.

The following exclusions apply:

  • Where renovations, alterations or improvement works are being carried out on the interior of a dwelling house and do not materially affect the external appearance of the dwelling house.

  • Enlargements of a dwelling house within certain limits.

  • Carrying out certain works by government personnel.

42. What are the main authorisation and consultation procedures in relation to planning consents?

Initial consents

Applications are made to the Central Planning Authority for Grand Cayman and the Development Control Board for the Sister Islands (Cayman Brac and Little Cayman).

An initial decision typically takes between two to three months.

Third party rights and appeals

If third parties receive notice of a development application, they have the right to object or make representations.

On receipt of an application for planning permission, the Central Planning Authority or the Development Control Board can hold an inquiry, to consider whether there are issues of substantial importance relevant to the determination of the application which may require further evaluation.

There is a right of appeal, but this is restricted to the person who applied for the planning permission and to individuals residing or owning land within a radius of 1,500 feet from the boundaries of the land to which the application relates.



43. Are there proposals to reform real estate law and are they likely to come into force and, if so, when?

The Law Reform Commission has submitted for comments the Strata Titles Bill 2014, which is intended to overhaul and replace the Strata Titles Registration Law 2013. The draft bill is much more comprehensive than the existing strata titles legislation. It proposes more regulation of strata ownership but also provides more options for strata developments.


Online resources

Cayman Islands government


Description. This is the website of the Cayman Islands government. Information pertaining to the real estate legislation, case law and rules in the Cayman Islands can be found here.

Cayman Islands Lands and Survey Department


Description. This is the website of the Cayman Islands Lands and Survey Department. Information pertaining to the real estate legislation, case law and rules in the Cayman Islands can be found here.

Cayman Islands Planning Department


Description. This website provides information on planning matters.

Cayman Islands Chamber of Commerce


Description. This is the website of the Chamber of Commerce, which provides information on commerce in the Cayman Islands and other general information.

Contributor profiles

Norman Klein


T +1 345 814 2050
F +1 345 949 4901

Professional qualifications. Cayman Islands, 1994; Canada, 1992

Areas of practice. Property development; property finance; and property transactions.

Recent transactions

  • Acting on behalf of the owner and developer of The Ritz-Carlton Grand Cayman from conception to completion and in relation to the ongoing development of the project, as well as the sale of residences.
  • Advising on title structure for a new town being developed by Dart Realty including commercial, residential, hotel/tourism, industrial and marine components.
  • Acting for a Class A bank in relation to the financing of a new shopping plaza on Seven Mile Beach.
  • Acting for a Class A bank with respect to the acquisition of a loan portfolio of an overseas affiliate.
  • Acting for a Seven Mile Beach strata corporation with respect to the redevelopment and financing of new beachfront.
  • Acting for the purchaser of Point Sand, a culturally significant beach landmark in Little Cayman.
  • Acting for the most significant developer in the Cayman Islands with respect to an agreement with the Cayman Islands government and the National Roads Authority for the development of major highway infrastructure.

Donald Miller


T +1 345 814 2701
F +1 345 949 4901

Professional qualifications. Cayman Islands, 2002; Canada, 1994

Areas of practice. Property development; property finance; and property transactions.

Recent transactions

  • Acting for the lender in refinancing a major listed Caribbean utility company.
  • Acting for the new owner of the Ritz-Carlton Grand Cayman Resort in revising purchase and rental agreements, restrictive covenants and management consultant contracts.
  • Acting for the purchaser of the largest hotel/resort on Cayman Brac.
  • Acting for a strata corporation taking steps to collapse the strata plan and dispose of the remaining common property.
  • Acting for the lender to the owner of a Seven Mile Beach resort advising on default remedies, and preparing forbearance agreements.

{ "siteName" : "PLC", "objType" : "PLC_Doc_C", "objID" : "1247393744231", "objName" : "Commercial real estate in the Cayman Islands overview", "userID" : "2", "objUrl" : "", "pageType" : "Resource", "academicUserID" : "", "contentAccessed" : "true", "analyticsPermCookie" : "2-57a08db8:1503c06ddee:-4f98", "analyticsSessionCookie" : "2-57a08db8:1503c06ddee:-4f97", "statisticSensorPath" : "" }