CAYMAN ISLANDS Law and Practice Contributed by: Norman Klein and Adam Johnson, Appleby
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 registered legal charge, any float - ing charge or any unsecured debt, in respect of the proceeds of realising such asset. It is possi - ble for lenders to subordinate debt contractually, There is currently no statute that has the effect of shifting 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 although this is not common. 3.8 Lenders’ Liability Under Environmental Laws 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 liquida - tor. With respect to security over real estate, the Registered Land Act (2018 Revision) 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 statutory 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 (2018 Revi -
sion), 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 . 4. Planning and Zoning 4.1 Legislative and Governmental Controls Applicable to Strategic Planning and Zoning The following legislation regulates planning and zoning 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 sub - ordinate legislation. Any development of land requires a grant of planning permission. “Development” encom - passes the carrying out of building, engineer - ing 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 subdivi - sion of land. However, it is subject to a number of exclusions, including any works for maintenance, improve - ment or other alteration that only affect the inte - rior of a building or do not materially affect the external appearance of the building.
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