Dodgy builders off the hook

As development of the Cayman Islands continues its forward march, a law that could have a major impact on the construction sector is languishing,

Although it has been passed, the Builders Law, 2007, and its accompanying regulations gazetted on 4 August, 2008, are not yet in force.

‘Although the previous government promised its implementation repeatedly, this was never done,’ said Rayal Bodden, vice president of the Cayman Contractors’ Association.

In September 2008, the Caymanian Compass reported the Builders Law was anticipated to come into force in January 2009. However, the date of its coming to effect has not yet been announced.

Mr. Bodden is extremely disappointed.

‘This was a terrible disservice to the people of Cayman, as this was a consumer protection law of proven national importance,’ he said.

Under the new law, companies and individuals carrying out construction would be licensed by a new Builders Board as either building contractors, civil contractors, general contractors, residential contractors and or subtrade contractors.

It’s the only business license contractors would require, the proposed annual fees range from $1,000 for subtrades up to $5,000 for general contractors.

To obtain a licence, contractors would need to demonstrate, with supporting documentation and references, that they are qualified to carry on construction in the Cayman Islands, and that they have a sufficient number of qualified people under their control to carry out the work of the company licensed as individuals under the Builders Law.

In addition, contractors would need to similarly demonstrate the companies are Caymanian controlled with at least 60 per cent Caymanian beneficial ownership, and that a minimum of 60 per cent of the directors are Caymanian. A foreign owned company would have to have been operating in the Cayman Islands under a Local Companies (Control) Law licence for more than 20 years.

Corporations carrying on construction without a licence would be liable to a maximum $10,000 fine in addition to a $2,500 fine each day that the offence continues.

Directors and managers would be liable to a maximum $2,500 fine in addition to a $250 fine each day that the offence continues.

The new regulations set the minimum amount of the mandatory public liability insurance to $1 million for all contractors with the exception of the subtrade contractors, who must be insured to at least $500,000.

Planning Director Kenneth Ebanks said it is difficult to say when the new law might come into force, if at all.

Mr Ebanks said that in 2008 the Department had been in the process of recruiting staff to carry out the administrative work the Law would require. However, in the midst of the recruitment the government issued a hiring moratorium which stalled the process.

Then, while the Department was going through the process of trying to gain approval to recruit the staff, the 2009 election came along.

‘The Planning Department has a new chief officer and minister, and I anticipate the responsibility for the new law should be transferred to the new ministry,’ he said.

‘Its fate is uncertain. It may be left to die, it may be repealed, or it may be amended. These are all things that are up in the air.’

So whether or not the Law will go ahead or be abandoned altogether is up to the new ministry.

Mr. Ebanks said that while the law and regulations exist, they are useless without the mechanisms to enforce them, which are administrative staff and the appointment of a board.

Mr. Ebanks says the previous government was in the process of appointing the Builders Board members.

‘Initially the administrative staff were to be housed in planning, and the Builders Board would be operating under planning,’ he said.

‘Now that planning is in a new ministry, I suspect it will be transferred over there.’

Central Planning Authority Board Chair Larry Thompson is anxious to see the Law in place as he believes it crucial that all contractors are registered.

‘If there is a dispute between consumers and builders then the board would mediate the problem,’ he said.

‘And if you have a rogue builder the board can pull that person’s license.’

But he is worried the process of getting the law up and running will stall.

‘It is needed, it needs to get off the ground,’ he said, ‘and that means the board needs to be appointed.’

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