CAYMAN ISLANDS Law and Practice Contributed by: Norman Klein and Adam Johnson, Appleby
7. Construction 7.1 Common Structures Used to Price Construction Projects Due to the relatively small size of the jurisdic - tion, significant construction projects are few in number at any one time. There is no commonly accepted market standard of contract, so par - ties 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 typically 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 contractor’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 Construction Projects . 7.3 Management of Construction Risk See 7.1 Common Structures Used to Price Construction Projects . 7.4 Management of Schedule-Related Risk See 7.1 Common Structures Used to Price Construction Projects . 7.5 Additional Forms of Security to Guarantee a Contractor’s Performance See 7.1 Common Structures Used to Price Construction Projects .
7.6 Liens or Encumbrances in the Event of Non-Payment See 7.1 Common Structures Used to Price Construction Projects . 7.7 Requirements Before Use or Inhabitation Certificates of fitness for occupancy must be obtained from the Central Planning Authority (or the Development Control Board in relation to property in the sister islands) before any new buildings are occupied. Ad valorem stamp duty is payable on the fol - lowing (subject to certain exceptions that are at the discretion of the Minister of Finance) on the following: • a conveyance or transfer of any immovable property (freehold or leasehold), typically at a rate of 7.5% of the purchase price or of the market value, whichever is higher, although concessions or reduced rates may be avail - able in specific circumstances (such as first- time Caymanian purchasers and purchasers of units in lower value newbuild homes); and • a grant of a lease of any immovable property: (a) if the term exceeds 30 years, 7.5% of the full market value of the leasehold interest in the real property; or (b) if the term is 30 years or less: (i) where any premium or other valuable 8. Tax 8.1 VAT and Sales Tax consideration other than or in addi - tion to rent is provided, 7.5% of the amount of the premium; and (ii) where the consideration or any part of the consideration is rent: (i) 5% of the aggregate rent if the term is less
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