Articles - Buying a Condo in the Cayman Islands

All you ever wanted to know about buying a condominium, but were afraid to ask ..

Congratulations – you’ve saved up your money and decided to buy your dream condominium in beautiful Grand Cayman. Having previously purchased a home in the Cayman Islands or in another jurisdiction, you’re quite comfortable with the buying process. Nonetheless, you have learned through experience that it is best to work with a real estate agent, banker and attorney from the outset to get professional advice before you sign on the dotted line.

So, what are the basic “legalities” you should understand before buying a condominium ?

Scott Elliott, a real estate agent at RE/MAX Cayman Islands, explains that in the Cayman Islands condominiums or “stratas” are managed and operated by a strata corporation, which is a creature of statute. All strata corporations are required by law to do the following:

insure the building (but not the contents) at minimum against fire, earthquake and hurricane and such other risks as the owners of the units unanimously agree; and
keep the “common property” (meaning everything outside of the condo units themselves eg: roofs, stairways, walkways, parking areas, swimming pools, etc.) properly repaired and maintained.

As you might expect given these obligations, the law further provides that the strata corporation in turn has the power to:

establish a fund for administrative expenses sufficient to manage and administer the strata property and discharge its duties; and
determine the amount of fees to be charged to each condo owner.

But who owns and operates the strata corporation ? You do ! - along with all of the other owners in your complex. As a condo unit owner you automatically become a part owner of the common property as well. By way of example, if there are ten condos of equal size in the building and you own one of them, you effectively own 1/10 of the common property. The use and enjoyment of the condos and the common property will be regulated by certain rules known as “by-laws” which may be those set out by statute or (more typically) agreed by the owners themselves and registered at the Land Registry office. The strata corporation is run in a similar way to any other corporation in that an “Executive Committee” will be elected by the owners to manage the affairs of the strata, much the same way as shareholders of a company will elect a Board of Directors to manage the company’s business.

As part of the due diligence prior to completing your purchase, your attorney will request from the strata corporation what is known as a “6(4) certificate”. This name refers to a section of the Strata Titles Registration Law which requires that a strata corporation provide a statement to the owner or anyone authorized by the owner (eg: a contracting purchaser) certifying the amount of contribution required from each condo owner, when such amount is payable (eg: monthly, quarterly, semi annually) and whether any arrears of payment exist. Your attorney should also inquire if any special assessments or fees are planned on top of the usual contributions, whether a reserve fund exists and if so, how much money is in the fund. A reserve fund is a fund which some strata corporations have established to cover rainy day contingencies, such as major structural repairs or replacements, a sudden increase in insurance premiums, and so forth.

Armed with this brief lesson, you are now better prepared to venture into the market place to find your dream condo. Good luck !