CAYMAN ISLANDS Law and Practice Contributed by: Norman Klein and Adam Johnson, Appleby
2.4 Real Estate Due Diligence As there is no commonly accepted market standard of due diligence when acquiring real estate, the purchaser is responsible for deter - mining 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 common property or the land - lord’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 disputes, compliance with laws, overrid - ing interests, services, etc); • consider whether any additional enquiries should be raised with public or other bodies (depending on the nature of the transaction), such as the Lands and Survey Department, the Department of Environment or the Depart - ment 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 dili - gence is usually the same, with some additional due diligence on the relevant entity or structure. If the purchase of property is financed by third- party debt, the lender will typically require spe -
Unless the contrary is expressed in the register, a parcel of registered land is also subject to such of the following overriding interests as may for the time being subsist and affect the same, with - out their being noted on the register: • rights of way, rights of water and any ease - ment or profit subsisting at the time of first registration; • natural rights of light, air, water and support; • rights of compulsory acquisition, resump - tion, 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 pos - session 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 con - ferred by any law. In 2020, temporary measures were introduced in light of reduced in-person availability for docu - ment signing and notarisation caused by the COVID-19 pandemic. While those measures have since been rolled back, the Cayman Islands Land Registry has redoubled its efforts to imple - ment a secure e-conveyancing system to reduce the reliance on physical documentation.
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