No Comments

Buying Procedures

 

THE PROCEDURES FOR PURCHASING PROPERTY

IN THE CAYMAN ISLANDS

(by Kass Coleman at RE/MAX Cayman Islands)

 

Once you make a written offer and complete it (as purchaser), we present it to the vendor. The vendor either accepts it as it is or can make a “counter offer”. Once the contract is agreed-upon and properly signed up, the property is then considered “pending”.  If there are conditions to the offer, it is shown as “pending with conditions” (shown as PEN/CON in the system).  We can explain more to you about this. You would then proceed to make the required deposit per Clause 3 “Manner of Payment”); work would begin on any of the conditions that were stated in the contract per Clause #5.

At this time, we would contact your attorney (for your benefit and peace of mind, we highly suggest that you use an attorney) to let them know the current situation regarding the contract.  If financing is involved, we will also contact them to see if they need assistance with valuations, sales history, etc on the subject property and keep in touch with all the involved parties to ensure a smooth closing.

After all the conditions have been satisfied and are in writing to the vendor, the deposit becomes non-refundable (but stays in the account in which it was placed, per Clause 4 of the contract) and a firm closing date is set.  A “Search and Stay” is placed on the property’s land title at a cost of CI$50 (US$60.98 and paid for by the purchaser.  The Search and Stay form ensures there are no outside interests in the property. Since Government guarantees all Land Titles (there is NO  Title insurance in Cayman), this is assurance that you are buying what is represented and that there are no encumbrances on the title.

At closing, the purchaser needs to have all funds available for the vendor and any other expenses – legal fees, utilities deposits, Strata (Association) fees, etc. The amount due to the vendor by the purchaser is detailed on Purchaser’s and Vendor’s Closing Statements, either prepared by your attorney or by our office. All parties involved (sales agents, attorneys, property managers) will work closely together to ensure that all aspects of the sale are handled promptly to ensure that there are no surprises on the day of closing. The sales commission is always paid for by the vendor and all items detailed on the closing statements are distributed at closing.  The fully signed Transfer of Land (title deed) documents and Stamp Duty check are delivered by hand to the Land Registry Department for processing.  About 2 weeks later, the purchaser’s name will appear as the new owner on the title and this information is a matter of public record.   Once this is done, we will provide you with a copy of the Land Register for your record.

Other than Stamp Duty, you will owe no other monies to the Government for the entire time you own your property.  Cayman has no capital gains tax, inheritance tax or any other form of direct taxation on property.  The purchasing party always pays the Stamp Duty. 

 

Approximate Closing Costs borne by the Purchaser in addition to the Purchase Price:

 

  • Search & Stay Registration CI$50 (US$60.98)

 

  • Purchase Agreement Registration CI$100 (US$121.95)

 

  • Stamp Duty is 7.5% of the Purchase Property less the value of chattels

 

  • Registration Fees (to get title in your name) CI$50 (US$60.98)

 

  • Legal Fees (if applicable)- usually 1-2% of the value of the transaction (or some firms offer a flat rate)

 

  • Banking Fees (if applicable) – usually 1% of the value of the loan (some banks charge less than that)

 

  • Utility Deposits – phone, lights, water and cable TV, say- CI$600 (US$730.00). (Fees vary depending on whether you will rent out or live in the property)