The real estate lawyer: ‘Let the buyer beware’

As a recession blazes
through the real estate market like a wild uncontrollable fire, consumers are
stricken with fear and dilemma either fighting to keep their homes or trying to
find the means to purchase a home. Despite this fear, the horizon is still visible.
There are some movements in the real estate markets and consumers are realising
that the time to buy is now. The opportunity to buy can be seized and gently
massaged until the deal is closed.

For first time home
seekers, there are many options available today. There are some favourable
terms mortgages with local banks, lease to own options from developers and some
very reasonably priced homes which will attract minimum monthly mortgage
payments. For investors, there is a glut of apartments, condos and raw land on
the market, which of course results in the predictable price decline. In years
gone by, most of the older Caymanians who were sailing the seas for a
livelihood sent their hard earned dollars home to invest in land. Today, one
could easily say that those investments paid off to a certain extent. Over the
years, the value of those properties purchased increased and today families of
those seamen have a handsome value for such investments and the choice to
either, sell, develop or keep those same properties for future generations.

The Cayman Islands is
still the sought after destination. The islands boast a strategic geographical
location, sturdy infrastructure, practical and sensible laws, stable
government, a superb judiciary system and compared to the global playing field,
the Cayman Islands is still one of the safest destinations.

The Cayman Islands is
greatly coveted for its profitable financial industry, its splendid white sandy
beaches and the warmth of its people. No doubt, some will conclude that this is
where they want their children to grow up and where they want to retire.

As the economy now
stands, it is a buyer’s market and this low price buying opportunity is rare
and will be short lived.

 

Contract to Purchase
Property:

Should you desire to
own a home, a vacation spot, timeshare or obtain land for development in Grand
Cayman, the islands has many real estate agencies that can walk you through
options with no cost to you and work with your bankers, developers and
attorneys to ensure that you will find you the right property at the best price
available. The Cayman Islands Real Estate Brokers Association (CIREBA) is a
Cayman Islands corporate body that regulates real estate agents and has a basic
but well developed and often adequate Offer to Purchase contract which is often
used by realtors. However, a buyer should always get advice from an attorney at
the before signing the contract to prevent being a victim of the principle of
“Caveat Emptor”, the Latin for “let the buyer beware”.    

Good Title:

The Registered Land
Law provided the legal framework for the registration of real estate titles in
the Cayman Islands.  This allows for
common law proprietary interests to be registered in the Incumbrances Section.
Buyers  should be aware of registered
incumbrances such as leases, charges and easements on the property. The Cayman
Islands Land Registry provides for inspections of property registers and prior
to closing your attorney will file a Search and Stay to prevent any dealings
with the property until your transaction is completed and to ensure that you
the Buyer will obtain a good title.  

Strata Title:

In purchasing an
apartment of condominium that is stratified, you the Buyer should be well aware
of the rules of the Strata Corporation. It is sensible to get a real estate
attorney to review the Strata By-Laws and advise you on the binding ties of the
document such as the items represented by the Strata Fees and rules of the
By-Laws that may alter your enjoyment of your property.

Stamp Duty

The Stamp Duty Law
provides a breakdown of Cayman Islands stamp duty calculations. The statutory
rate of stamp duty depends on the location of the property. Buyers should also
be aware there are opportunities for first time Caymanian home buyers with
respect to payment of stamp duty. Buyers should ensure that saving
opportunities are explored by their attorneys.

Bank Mortgage:

Banks are in the
business to lend money for a return.  As
such, preparing security documents for closing is time sensitive. A real estate
attorney is equipped and can prepare these documents for closing quickly and
accurately to ensure that the bank obtains the best security to minimise their
risks. Upon closing of the transaction, the real estate attorney will ensure
that the appropriate documents are delivery to the Registry of Lands for
necessary registration.

In the same breath
that bankers are protected, Buyers must also be protected and be cognizant of
what they are signing over to the bank. Buyers should have the fullest
understanding of extent of the expectations of the bank and the strata
corporation and other bodies involved in the transaction. Too often Buyers will
say “I did not know that I had to pay these extra fees or I did not know that
there was a covenant or a right of way over the property”.  It is important that your real estate
attorney go that extra mile to ensure that you are fully aware of all angles of
your purchase.

Where a company is
buying  property, the security documents
especially Debentures must be explained to the directors of the company with
great care and diligence so that they understand the extent of the expectation
to which the bank is holding the company and all possible legal ramifications
to the company. 

To conclude now is
the time to buy and these islands provide the means to do so through our banks,
real estate agents and attorneys. The art of a solid real estate transaction is
finding that opportunity, grasping it with full awareness and clear
understanding. You will triumph with the best value for money.

It is after all, a
buyer’s market!

Sonia Bush,is a
Notary Public with Sonia Bush & Associates Attorneys-at-Law & Notary
Public. She will be providing her knowledge and insight into aspects of real
estate through a regular column in the Observer on Sunday

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