CAYMAN ISLANDS Law and Practice Contributed by: Adam Johnson, Appleby
7. Construction 7.1 Common Structures Used to Price Construction Projects Due to the relatively small size of the jurisdiction, sig - nificant construction projects are few in number at any one time. There is no commonly accepted market standard of contract, so parties are free to agree terms as they see fit, with the format and complexity of the contract often being driven by the sophistication of the parties and the type of project. However, most larger construction contracts will typi - cally follow a US style (such as the American Institute of Architects), a UK style (such as the joint contracts tribunal), a combination of the two, or even the con - tractor’s (or developer’s) own standard terms. 7.2 Assigning Responsibility for the Design and Construction of a Project See 7.1 Common Structures Used to Price Con- struction Projects . 7.3 Management of Construction Risk See 7.1 Common Structures Used to Price Con- struction Projects . 7.4 Management of Schedule-Related Risk See 7.1 Common Structures Used to Price Con- struction Projects . 7.5 Additional Forms of Security to Guarantee a Contractor’s Performance See 7.1 Common Structures Used to Price Con- struction Projects . 7.6 Liens or Encumbrances in the Event of Non-Payment See 7.1 Common Structures Used to Price Con- struction Projects . 7.7 Requirements Before Use or Inhabitation Certificates of fitness for occupancy must be obtained from the Central Planning Authority (or the Develop - ment Control Board in relation to property in the sister islands) before any new buildings are occupied.
6.20 Registration Requirements All leases attract stamp duty (see 6.7 Payment of VAT ) but only leases exceeding a term of two years (wheth - er as an initial term, through extension or renewal options or where expressed to be for the life of one of the parties) require registration (shorter leases are overriding interests). Registerable leases require a front sheet in prescribed form but otherwise the parties are free to negotiate the form and content of the bulk of the terms. Leases of part of a registered freehold must be accompanied by a plan. Registration expenses are minimal. 6.21 Forced Eviction It is common for a lease to contain forfeiture clauses that allow the landlord to evict the tenant. However, the tenant has a statutory right to apply to the court for relief against forfeiture, so the timeframe for the forfeiture process can vary. 6.22 Termination by a Third Party The Cayman Islands government can compulsorily acquire any land. This is usually done for the purposes of establishing new public roads but can also be done in other circumstances. Compensation is payable, typically at the market val - ue of the interest acquired. 6.23 Remedies/Damages for Breach A landlord may sue for damages for breach of con - tract so as to compensate it for loss arising from the breach. Typically, a prudent landlord would hold a security deposit equal to between one and three months’ rent, and the lease would provide that this may be forfeited in the event of breach. If the landlord used the security deposit to remedy a breach but did not terminate the lease, a well drafted lease would oblige the tenant to top-up the security deposit.
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