CAYMAN ISLANDS Law and Practice Contributed by: Adam Johnson, Appleby
whereby a parcel can be subdivided into several three- dimensional parcels (which can include airspace). A contractual licence can allow for the occupation or use of real property. However, this is a personal right and does not create a registerable interest. 2.2 Laws Applicable to Transfer of Title All transfers of title of real estate are primarily gov - erned by the Registered Land Act (Revised). While not specifically related to the transfer of title, the carrying on of business from real estate within the Cayman Islands requires certain local licences, some of which are specific to property type. 2.3 Effecting Lawful and Proper Transfer of Title Transfers of real estate must be registered at the Cay - man Islands Land Registry. Broadly speaking, the land register is definitive and is supported by a government-backed indemnity (although it can be rectified to deal with matters such as error and fraud). Title insurance is available only on the larger commercial transactions, but it is expensive and rarely used. Unless the contrary is expressed in the register, a par - cel of registered land is also subject to such of the fol - lowing overriding interests as may for the time being subsist and affect the same, without their being noted on the register: • rights of way, rights of water and any easement or profit subsisting at the time of first registration; • natural rights of light, air, water and support; • rights of compulsory acquisition, resumption, entry, search, user or limitation of user conferred by any law; • leases or agreements for leases for a term not exceeding two years, and periodic tenancies; • any unpaid moneys that are expressly declared by any law to be a charge upon the land; • rights acquired or in the process of being acquired by virtue of any law (ie, adverse possession and prescriptive rights); • the rights of a person in actual occupation of land or in receipt of the rents and profits thereof (save
where inquiry is made of such person and the rights are not disclosed); and • electric supply lines, telephone and telegraph lines or poles, pipelines, aqueducts, canals, weirs and dams erected, constructed or laid in pursuance or by virtue of any power conferred by any law. 2.4 Real Estate Due Diligence As there is no commonly accepted market stand - ard of due diligence when acquiring real estate, the purchaser is responsible for determining the level of investigation that would be appropriate on a case-by- case basis. The purchaser’s attorney should do the following at the very least: • review the title documents, including a copy of the land register for the subject parcel, a copy of any connected or superior interests (ie, the strata com - mon property or the landlord’s title), a copy of the registry map and a copy of all instruments noted on title; • review the lease and any other ancillary docu - ments, if the property is leasehold; • review any leases to which the property is subject; • raise any relevant enquiries with the seller (about the state and condition of the property, any dis - putes, compliance with laws, overriding interests, services, etc); • consider whether any additional enquiries should be raised with public or other bodies (depend - ing on the nature of the transaction), such as the Lands and Survey Department, the Department of Environment or the Department of Planning; and • consider recommending a physical inspection or survey of the property by the purchaser and a professional. Although uncommon, real property can be sold by way of transfer of the entity or structure through which it is held. In such cases, due diligence is usually the same, with some additional due diligence on the rel - evant entity or structure. If the purchase of property is financed by third-party debt, the lender will typically require specific due dili -
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