A Closer Look at Stratas


Strata schemes (or plans) are the registered plans of a strata title property and are quite common in the residential, commercial and industrial sectors. Stratas offer property owners the ability to share in the costs and upkeep of a development. However, there are times when strata fees become delinquent. CINCB can help you pursue unpaid strata debts. But first, let’s get up to speed on what a strata is, how stratas work, and what typically happens when strata debts go unpaid.

What is a Strata?

A strata is a scheme where a parcel of land is divided between various owners. Each owner holds their share of a unit in a separate, registered title. The strata enables owners to run their development between themselves in a shared capacity. Most condominium developments, apartments, and townhouses utilize stratas in Cayman, but they are not the only types of property to do so. There are developments on island that utilize stratas despite having individual, detached properties as part of their plan.

Stratas allow individuals to have ownership of part of the property, while sharing the costs and ownership of the remaining areas in the development, such as common driveways, gardens, pools, on-site gyms, or other amenities. They ensure that all costs and maintenance for shared areas are covered by all participants.

Typically, property owners in a strata development will choose an executive committee to oversee the strata and needs of the community. For example, a strata committee will handle things such as managing insurance for the property, maintaining common areas, setting rates, overseeing amenities and more. The strata committee also sets the rules, or bylaws, by which all property owners participate.

Strata bylaws enable the committee to insure strata buildings and cover replacement value and material premiums. They also govern the maintenance of common areas. Bylaws can also set aside specific funds for administrative expenses, management needs, and discharge of strata management. Stratas also have the ability to levy special assessments for one-off items of capital expenditure that may have been unforeseen. Finally, they set out the amount of strata fees by way of assessment based upon each proprietor’s unit participation, plus provide legal means to recover outstanding fees.

There are some key benefits to having a strata and participating in it. These include a price advantage over non-strata properties for purchasing and location. Stratas also provide a way for all proprietors to share costs on maintenance items, such as painting, groundskeeping, and more.

When you are the proprietor, you will be responsible for your strata fees to the strata plan. Typically this is based on the percentage of square footage of the development which you own.

How it Works in Cayman

Residential property in Cayman is often sold as part of a strata plan if it is in a condominium or apartment complex. Strata ownership is very common in Cayman. The following is an explanation of how it works.

Let’s say you buy a property as part of a strata development. You’ll receive the title of the home or unit that is situated on the property within the plan. You will also be given a share in the strata, including voting rights. Under the bylaws, a strata is obligated to ensure that the strata property is properly insured and maintained. Fees in Cayman can vary across the spectrum from as low as CI$200-300 up to amounts over CI$1000+ per month, depending on variables such as unit size, location, style of development, etc.

What Happens When Strata Fees Go Unpaid?

Unfortunately, not all proprietors pay their strata fees. This can negatively impact the Strata’s ability to cover obligations under the development bylaws, unfairly increasing the burden on neighbors. There are certain legal remedies and mechanisms for the collection of strata fees incorporated into the bylaws. These involve:

  • Strata Titles Registration Law
  • Strata Titles Registration Regulations
  • Registered Strata Bylaws
  • Registered Strata Plan

A strata, like any company, can pursue legal proceedings and remedies in order to recover unpaid strata fees. However, like any legal entity, it can also be subject to lawsuits. Rights are set out by the Strata Law for all parties.

If a proprietor is in breach of his or her obligation to pay assessments or otherwise in breach of his or her obligations, there are several steps a strata can take.

First, the strata corporation must send a demand letter themselves. If this method does not work, the strata can begin pursuing legal proceedings against the debtor. However, as an intermediate step, the strata can contact CINCB and have our professionals try to recover the debt as well.

As a last resort, a strata can pursue legal proceedings. Most legal actions are for unpaid strata fees, but these actions are not limited just to outstanding debts. They can also be used to resolve a variety of issues such as insurance disputes or the proper use of a common area. That said, legal actions can also be quite costly and time consuming.

Typical legal remedies include:

  • obtaining judgment and/or a receivership order;
  • conducting a judgment debtor examination to determine the debtor’s assets and ability to pay;
  • issuing an application for an attachment of earnings order to collect the debt from the proprietor’s employer if he or she is working; or.
  • obtaining a charging order to sell the property to satisfy the debt.

How CINCB Helps Your Business/Strata Pursue Unpaid Fees

CINCB can act as a first step to strata debt recovery from proprietors in order to avoid lengthy legal proceedings. Or, if you are already in the middle of the legal process, the strata can utilize our services and data to assess debtor assets, run credit reports to determine their ability to pay, and generate other documentation for use in the legal process to aid in a successful resolution and collection of the unpaid debt.

CINCB has been established since 2002 to provide debt collection and credit reporting services. CINCB serves over 260 creditors locally and internationally with a local team of highly experienced agents ready to serve you. Our expert staff has a variety of skills and methods to negotiate with proprietors in order to acquire uncollected strata debts. And we do it all in a more efficient, cost-effective way for a strata corporation. Find out how we can help your strata today! Services are delivered fully online at www.CINCB.ky.  Contact us today to find out more.


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