Editorial for 12 August: Protecting Cayman’s image

Although the Cayman Islands financial
services industry has seen increasing regulation over the past few decades, one
investment vehicle here remains virtually unregulated.

Buyers of Cayman Islands real estate
basically proceed under the principle of caveat emptor – let the buyer beware.
Using a local attorney can minimise the risk of making a bad real estate
purchase, but many buyers don’t use attorneys.

The Cayman Islands Real Estate Broker’s
Association does self-regulate its members, but a company does not have to
belong to CIREBA to sell real estate here. In addition, just because a
developer offers property for sale through a CIREBA member does not mean it
will get developed as promoted.

Dating back to the 1970s, there have been
examples of Cayman Islands land developments being sold sight unseen in foreign
countries where false promotions have been made. Two Canadians were convicted
of fraud in the late 1970s in relation to such a scheme involving a land
development in Prospect.

Our front-page story today discusses two
companies that are selling land as an investment to overseas investors,
sometimes sight unseen.  While we in no
way are implying either of these companies is doing anything illegal – in fact,
all indications are that they are completely within the limits of the laws – we
suggest the Cayman Islands would be better served by regulating these kinds of
activities.

Cayman has already had its share of black
eyes from real estate deals gone sour and cases where the law doesn’t
adequately protect purchasers, such as with time share purchases. Just ask
anyone who owned a week at Indies Suites what they think of the Cayman Islands
now.

In the US in the 1960s, unscrupulous people
sold swampland in Florida – sight unseen – by using photographs and words to
imply it was worth a lot more that it really was.  Many people lost their savings in these
purchases, harming Florida’s reputation. 
Cayman can’t afford more hits to its reputation, so perhaps it’s time to
regulate certain types of real estate investment promotion here.

 

 

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