One of the best parts of buying property in Cayman is the title system whereby on one piece of paper – The Land Register – you can see if there are any liens or encumbrances on title, writes JC Calhoun, three-time past president of the Cayman islands Real Estate Brokers Association and a board member since its inception, and president of the Coldwell Banker Master Franchise for the Caribbean and Atlantic Islands.
That certainly makes transferring property easier here than elsewhere. However, not widely known is the fact that there are two encumbrances which do not show on the Land Register: Public Open Space and Land for Public Purposes. In either case if a property which you purchased was so designated, you could not develop it. There have been cases where this was discovered after the purchase, and we can assure you – that is messy!
The current solution is two-fold: First you need to check with the Planning Department to find out if the subject property is zoned POS or has a POS overlay whereby it has been targeted for government acquisition. Secondly, you must go on the Land Registry online system (if you have access, and most do not) and switch on the LPP button for the Block in which you are purchasing. If it is LPP, the subject panel will appear green.
But the fact is that the public should not have to go to all this trouble – especially when our title system is so highly touted. This is not something new. Planning and Lands & Survey and the government Legal Department have all known about this problem for years and due to “departmental difficulties” have not been able to sort it out. Years ago this happened to a customer of ours who threatened to sue. We were able to sort it out for him eventually but it was costly and all parties could have sued the government right then and there.
There is no reason whatsoever that these two encumbrances cannot be shown on title in some manner. We understand the new Director of Planning Haroon Pandohie, has taken up the challenge to get this done and we hope the Lands & Survey Department is more willing to assist than previously so this can be resolved before someone takes an unnecessary loss and Government is sued over it.
We also understand government is now looking seriously at private sector recommendations to allow Developers to pay a fee in lieu of LPP when they subdivide. For explanation purposes, LPP is the percentage of land required by Planning to be set aside by a subdivision developer which is earmarked and projected for public use within a development.
It remains in the name of the developer but it is rarely improved so the residents can make use of it. More often than not it becomes a dumping ground for gardeners of neighboring parcels as no one takes responsibility for it. The developer is long gone and the residents are reluctant to pay for its continuing up-keep since they do not own it. As a result LPP parcels are generally a white elephant.
Further, as a much needed government revenue generator, it has also recently been suggested that for a payment equal to a percentage of its current value, the government could remove the LPP designation to allow LPP parcels to be developed or sold.
To encourage this and solve an existing problem, going forward the owners of LPP parcels should be required to pay for the continuing upkeep of those LPP parcels in the case when a sale or development does not occur. The only downside might be if the owners who bought the neighboring parcels had counted on that land not being developed. In fact, in many cases it is the neighbor who is paying for upkeep, and it could be the neighbor who is given first opportunity to purchase the land.
If you think this is a good idea – or not – you should speak to your district MLA, but when talking to them don’t forget to encourage them to use their government clout to get all encumbrances on title – where they should be!