Cayman Islands Strata Corporations - Community Democracies

Clappison (and another) v Proprietors Strata Plan 381 and others

In a potential hammer blow to developer's seeking to retain ultimate ongoing control over the management and decisions of strata corporations registered against their developments, unit owners of Castaways' Cove in Grand Cayman's East End have won a landmark case that strata corporations are to "be run upon democratic lines".

Cayman has a long history of developers reserving themselves powers of absolute control over the management of the Strata Corporation until the earlier of the sale of all of the strata units or the expiry of a pre-determined period (typically no less than five years). Notwithstanding this well-established strata by-law formulation, it has been found that certain by-laws should be struck down as being ultra vires the powers and duties of the Strata Corporation because of inconsistency with the Strata Titles Registration Law (Revised) ("STRL").