CAYMAN ISLANDS Law and Practice Contributed by: Adam Johnson, Appleby
4. Planning and Zoning 4.1 Planning and Zoning Framework The following legislation regulates planning and zon - ing in real estate: • the Development and Planning Act (2021 Revision); • the Development and Planning Regulations (as revised); • the Development Plan 1997 (currently under review); • the Building Code Regulations (as revised); and • the National Conservation Act, 2013 and subordi - nate legislation. Any development of land requires a grant of planning permission. “Development” encompasses the carry - ing out of building, engineering or other operations in, on, over or under any land, the making of any material change in the use of any building or other land, or the subdivision of land. However, it is subject to a number of exclusions, including any works for maintenance, improvement or other alteration that only affect the interior of a build - ing or do not materially affect the external appearance of the building. Planning permission may be refused or granted unconditionally, or it can be subject to such condi - tions as the relevant authority deems fit. The Central Planning Authority for Grand Cayman and the Development Control Board for the sister islands are responsible for reviewing and considering applica - tions to obtain planning permission. The Director of Planning is empowered to take enforcement action where necessary. A record of all grants of planning permission, modifica - tions, revocations and conditions attached to planning permission relating to Grand Cayman is maintained by the Central Planning Authority; a record of those relating to the sister islands, Cayman Brac and Little Cayman, is kept by the Development Control Board. Planning permission is required for any proposed development or a material change in use of any build -
The priority of legal charges is determined by registra - tion at the Cayman Islands Land Registry. 3.7 Subordinating Existing Debt to Newly Created Debt Generally, the debt secured by a legal charge properly stamped and registered at the Cayman Islands Land Registry will rank in priority to any subsequently reg - istered legal charge, any floating charge or any unse - cured debt, in respect of the proceeds of realising such asset. It is possible for lenders to subordinate debt contractually, although this is not common. 3.8 Lenders’ Liability Under Environmental Laws There is currently no statute that has the effect of shift - ing any environmental liability on to a lender, although a lender can be exposed to potential liability once it takes possession of the premises after a default by the borrower. 3.9 Effects of a Borrower Becoming Insolvent Security interests created by a borrower in favour of the lender will not be rendered void if the borrower becomes insolvent. However, security may be set aside – for example, where it constitutes a preference or a transaction at an undervalue. Notwithstanding that a winding-up order has been made, a creditor who has security over the whole or part of the assets of a company may enforce their security without the leave of the court and without reference to the liquidator. With respect to security over real estate, the Registered Land Act (Revised) provides a statutory power of sale by public auction, power to lease and power to appoint receivers. Com - monly, a legal charge will vary and extend the statu - tory provisions to give the lender wider powers. To the extent the powers contained in the legal charge vary or are in addition to those created by the Registered Land Act (Revised), they may not be acted on without an order of the court. 3.10 Taxes on Loans See 3.4 Taxes or Fees Relating to the Granting and Enforcement of Security .
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