The real operations in Dominican Republic are governed by the law of the land registry of 1947 and its modifications, established by the offices of the titles registry in the various areas of the country, having for mission of dispatching
the certificates of title to the owners of real properties which answer the corresponding criteria in their jurisdiction. The title deed (
Certificado de Titulo) constitutes the probatory document par excellence of the right of property.
To transfer a property from the seller to the purchaser in an operation of purchase and sale, the following is necessary:
- The purchaser and the seller must appear before a notary in order to subscribe a contract of purchase and sale which will contain the legal description of the real property to buy, the selling price and other conditions suitable for the sale.
- The contract of purchase and sale will have to be presented to the local administration of General Management of Internal Taxes (DGII), in order to pay the taxes corresponding to the transfer.
- The contract of purchase and sale as well as the the title deed (
Certificado de Titulo) of the seller will be deposited at the office of the land registry whose jurisdiction will depend on the sold real property, where the purchase and sale will be recorded.
- The office of the land registry will send the new title deed in favor of the purchaser and will cancel the title emitted before in favor of the seller.
The dispatching of the new title deed can last a few days even a few months according to the land registry office where the contract of purchase and sale will be registered. The office of land registry of the National District (Santo Domingo) is slower.
Before to carry out the purchase of your real estate property it is advised that the purchaser counts with the services of a lawyer notary specialist in real businesses to carry out the essential steps. Although it is possible to carry out the purchase without the services of a professional, it is not really advisable because risky.
To begin the steps, the seller will have to supply the following documents to the purchaser:
- Photocopy of the title deed of the real estate property.
- Photocopy of the measure or plan of the building.
- Photocopy of his/her
cédula of identityor his/her passport.
- Photocopy of the receipt of the General Management of the Internal Taxes (DGII) which justifies the last payment on the tax property (IVSS) or photocopies of the certificate of payment exemption of the mentioned tax.
- If the seller has a company:
- Photocopy of the constitutive file of the company, of the act which appoints the social civils servant in exercise and of the act which authorizes the sale.
- Certificate delivered by the DGII which attests that the company is up to date with the payment of its taxes.
- If the real estate property forms part of a condominium:
- Photocopy of the declaration of the condominium.
- Photocopy of the rules of the condominium.
- Photocopies of the plans of construction duly approved by the competent authorities.
- Certificate of the condominium revealing that the seller is up to date with the payment of the maintenance costs.
- Photocopy of the three last assemblies held by the condominium.
- If the real property is a house:
- Photocopies of plans of construction duly approved by the competent authorities
- Inventory of the existing furniture
- Copy of the last receipts for payment of electricity, water, telephone etc.
Once obtained the above mentioned documentation, the work of the lawyer notary consists in making sure that the real estate property which is on the title deed is free of rights of pre-emption of a third and that it is exactly the property which the customer wishes to acquire. For this purpose, he will have to take the following steps:
- Search to the land registery office : the lawyer notary will have to receive a certificate of the land registry which indicates if the property is free of mortage charges, by ensuring by himself after a search in the corresponding files.
- Surveyor (
Agrimensor) : it is essential to have the services of an independent surveyor who checks that the property to purchase is the same one as that which is reproduced on the plan presented by the seller, unless it is a matter of urbanizations (allotment) which were not approved beforehand. It was proved in some cases, that because of errors of measurement or fraudulent manoeuvres of the salesman, the property presented to the purchaser is not the same one as that contained in the titles deed. It is advised to carry out the checking of the plan even when they are limited lands (
deslindados) or sub-divided with the agreement of the general direction of measurements of the national land registry.
- Inspection of the buildings (
mejoras): it will be necessary to count with the services of a civil engineer or architect who will inspect the object of the sale (house or apartment) in order to confirm that the plans presented by the purchaser are correct and that the structures of the buildings are in good condition.
- License: the lawyer notary of the purchaser will have to confirm that the property object of the purchase could be used for desired purposes. Although the regulations of town planning in Dominican Republic are very defective, there exists a lot of legal restrictions which must be taken into account before carrying out the purchase. For example the law 305 of 1968, governing the maritime zone of 60 meters starting from the beach all along the coast of the country, which indeed established that all the Dominican beaches belong to the public domain ! It is formally forbidden to build in the maritime zone without a special license of the executive power. Moreover, in the tourist zones there are restrictions of constructions managed by DEFINPRO, a department of the Central Bank.
- Possession: the lawyer notary will have to check that the seller has the possession of the real estate property to buy and that there are not occupants or buildings (
mejoras) pertaining to thirds. It is necessary to take particular precautions in the case of properties which are not closed off in order to know in advance an unspecified complaint on behalf of third. If there are tenants or farmers on the real property, the purchaser will have to be informed that the Dominican law over protect these people and that consequently their eviction could be the result of a difficult and expensive task.
- Employees: the seller will have to pay the wages corresponding to the employees having relationship with the exploitation object of the purchase.
Many Dominican notaries do not take the precaution to take the steps and searches above mentioned limiting themselves in the majority of the cases to obtain the certificate of no guarantee to the land registry. Often the real estate agents and the salesman make pressure on the purchaser in order to precipitately conclude in spite of the warnings from their notary.
Expenses of transfer on the property
The expenses of transfer on the property from the seller to the purchaser come up to 5% of the selling price, approximately. These expenses include the tax of transfer (4,48%), the tax on the acts, various stamps and tips. The taxes and the stamps will have to be paid before the deposit of the sale contract to the land registery office.
Insurance of the title
In Dominican Republic, like in other countries of South America and Europe, the State is guaranteeing the validity of the title deeds which it emits, establishing funds of insurance which make it possible, in theory, to compensate those which without making negligence, are stripped of their property, by error in the execution of the law. Unfortunately, in Dominican Republic, the fund of insurance never collected the necessary funds so that this legal protection is effective. To mitigate this deficiency, private insurers emit policies insurance or guarantees of tittle deed.
Purchase of real estate properties by foreigners
Currently, there does not exist any restrictions on the purchase on behalf of foreigners of real property in DR. In the past, the N.2543 decree of 1945 and these modifications required from the foreigners to obtain the preliminary authorization of the executive power except few exceptions. This form was repealed by the N.21-98 decree of January 8, 1998 which establishes as single constraint, that the registry of the titles establishes with statistics purposes, a file of all the sales carried out with foreigners.
Real properties and law of inheritance
The foreigners can inherit with complete freedom of real properties in DR. On the other hand, if they are not resident in DR, the taxes of inheritance which they will have to pay will be increased by 50% compared to a foreigner residing in the country. Moreover, the inheritance of real properties located in DR is subject to the Dominican law, which establishes an obligatory hereditary reserve in aid of the person deceased. For example a foreigner with a child will have to reserve to his/her heir(ess) 50% of his real inheritance in DR without taking into account that the law of his/her nationality or that his/her will indicates the opposite.
To avoid the application of the Dominican law to the inheritance, the purchase of real properties in an indirect way via companies is recommended to the foreigners, so that their right of property does not apply to the real properties, but rather to the shares of the company owner of the building, which allow the application of a more flexible system.