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Real Estate due Diligence in Cayman Islands

Updated on Monday 06th January 2020

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Real Estate due Diligence in Cayman Islands.jpgReal estate due diligence in the Cayman Islands is a common practice and it represents an investigation of the property, prior to signing the final purchase documents. The buyer is advised to perform this step in order to ensure that the property has its proper title documents, to have a clear image of the property’s current state as well as determine if any leases are taken on the property. 
 
The due diligence checklist will depend on the type of property that is being purchased as well as its use. In some cases, investors may wish to work with a professional who specializes in offering these particular types of services.
 
Apart from being interested in Cayman Islands company formation, foreign investors are also attracted by the evolving and diverse real estate market. Many properties are selling quickly especially those that are located along Seven Mile Beach, the top location on the Island and also one of the areas with the most expensive housing. 
 
Owning residential or commercial real estate in the Cayman Islands is simple for foreign investors who are also enjoying the ability to own land. Investments are convenient particularly because there are no property taxes and no restrictions on ownership. In addition to these favorable conditions, the British Overseas territory also offers beautiful beaches and scenery and it is an attractive holiday destination. 
 

The real estate due diligence checklist in the Cayman Islands

 
Some of the most common items that are verified during due diligence include the following
 
  1. Title: the copy of the land register map extract for the property in question;
  2. Lease matters: information on whether or not there are any leases on the property and, if so, what are their terms.
  3. Financial information: can include utility bills, expenses, bills for past improvements to the property.
  4. Litigation: whether or not the property in question is subject to any open claims.
  5. Physical inspection: an assessment of the physical situation compared to the built plans, the current status of the property. 
 
Please remember that this checklist is not an exhaustive one and some buildings may be subject to more thorough inspections, such as obtaining information about engineering reports or environmental reports (for commercial property, when applicable). 
 
The Cayman Land Info portal operates under the Lands and Survey Department and offers a set of useful features to users. Access to services such as cadastral information or land registry and terrain or planning information is subject to an annual yearly fee. 
 
Real estate investors can use the available online tools as well as work with a professional who offers complete real estate due diligence services in the Cayman Islands.
 
Those who are interested in setting up a Cayman Islands company and then purchase property can reach out to one of our agents. 
 

The property market in the Cayman Islands

 
The Cayman Islands are attractive to investors who wish to set up a business that is subject to tax neutrality. This is why many entrepreneurs choose to open a Cayman Islands exempted company. however, the beautiful islands are also a top destination to invest in real estate because of the good weather, proximity to the United States, the mature and diverse real estate market and the fact that English is the official language. 
 
According to an independent review of the property market in the Cayman Islands performed by Charterland, the situation was as follows:
 
  • - 1,857: the total real estate transfers registered with the Land Registry in 2018;
  • - 1,702: the real estate transfers registered in 2017; there is a 9% increase in 2018;
  • - 800 million CI $: the value of total sales in 2018, the highest value for sales in one year according to the source;
  • - 679 CI $: the value of real estate sales in 2017, meaning that the increase in 2018 had a 17.8% value.
 
The increase in the volume of property sales has contributed to an increase in the average property value.
 
Investors who are interested in purchasing land via a legal entity incorporated in this jurisdiction should know that the Cayman Islands exempted company may now own land without prior special approvals. One of our agents can provide more details on this matter. 
 
The Cayman Islands has a relatively small property market, however, it does contain a number of sub-markets that perform well. Some of these categories may include condominiums, houses, land and the commercial market.
 
When purchasing a property in any of the areas of interest, it is recommended to perform a real estate due diligence.
 
For more information about this process, as well as ongoing assistance for Cayman Islands incorporation, please do not hesitate to contact our agents.
 

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