Reforms needed for landlord/tenant legislation

Following the devastating effects of Hurricane Ivan in September 2004 and claims of oppressive and unfair treatment to tenants by their landlords following damage to leased housing, the Law Reform Commission conducted a review of the existing law regulating the relationship of landlord and tenant in the Cayman Islands in July 2008.

EE-for-rent-sign-on-tree-(Read-Only)Chaired by the distinguished Mr. Langston Sibblies (now a QC), the Commission recommended an overhaul of the law and tabled the Residential Tenancies Bill, which sought to address long-standing areas of inequity in residential tenancies, including discrimination of tenants with children; the need to create an obligation on landlords to insure their tenanted units or buildings; and the inclusion of implied terms.

Despite the considerable attention to detail and scholarship in the submission of the report, I have one criticism. The Commission concluded that the existing law in Cayman on commercial tenancies was satisfactory and did not require revision.

The report, in fact, states: “The Commission is of the opinion that the law regulating commercial tenancies does not require reform. The common law rules governing the relationship between landlords and tenants of commercial property operated satisfactorily in the unprecedented situation which existed in the aftermath of Hurricane Ivan.”

The Valuation Office of the Lands and Survey Department, who was consulted, strongly disagreed with this conclusion at the time and saw this as a missed opportunity to comprehensively revise all tenancies: The factors they cited in support of their position were:

There is no distinction between commercial and residential tenancies within the Registered

Land Law, Stamp Duty Law or the existing Landlord and Tenants Law

Some commercial leases do not grant basic tenant rights such as the right to quiet enjoyment

The lack of formal leases. Leases for many commercial premises in the Islands have been renewed orally, affecting the issue of stamp duty

There were similar experiences of price gouging in the commercial market as in the residential market.

The Valuation Office was right in 2008 but it is even more imperative today for government to review the law on commercial leases, considering that tenants are increasingly at the mercy of powerful corporate landlords where tenants have very little say in how a contract is negotiated because the balance of power is not remotely balanced. Ironically, in many cases, this landlord is turning out to be the government themselves.

Mr. Stephen Hall-Jones in his submission on Nov. 24, 2005, was of the opinion that Part V, Division 2 of the Registered Land Law (2004 Revision) and the Landlord and Tenant Law (1998 Revision) should be repealed and where appropriate incorporated into a new compendium law dealing with leasehold property and other housing law matters. He also noted that the Landlord and Tenant Law mainly deals with “distrait” and related topics rather than any wider matters of the law of leaseholds. The law of distrait involves seizing tenant property to settle arrears in rent (a remedy now abolished in many jurisdictions worldwide).

As far as I am aware, no significant changes have been made since the Commission published its report in 2008, and although a Residential Tenancies Law (2009 Revision) was drafted following the Commission’s recommendation, it is not yet in force some seven years later.

The Valuation Office in supporting the need for reform at that time stated: “The existing law is archaic, has no relevance in modern-day society and deals with little more than the landlord’s right of distress in the event of forfeiture or default by the tenant.”

True then, true now. This is 2016 and many of the territories whose laws the Commission examined when they conducted their review, including the U.K., have found it necessary over the years to make significant changes to their landlord and tenant law, including those affecting commercial tenancies.

Considering that the Valuation Office objected to the Commission’s conclusion that a reform of commercial tenancies was not necessary and considering that the law on residential tenancies is not yet in force, I am now calling on the Ministry of Planning, Lands, Agriculture, Housing and Infrastructure to lead the way forward in a comprehensive drive to modernize the entire law and introduce legislation that addressees much needed reforms for both commercial and residential leases.

Robert Hamaty

Chairman of the RWT Tenants Association Limitied and the ORA Tenants Association Limited