SANTO DOMINGO. -The special commission of the Chamber of Deputies appointed to study the draft General Law on Real Estate Rentals and Evictions continued yesterday to make progress in understanding the legislation, this time to learn the opinions of the sectors, raised during the public hearings held last week, where the institutions linked to the issue expressed their opinion on the proposal.
The draft bill authored by the Speaker of the House of Representatives, Alfredo Pacheco, was approved last June in its first reading in the House of Representatives and must be approved in its second reading in the Lower House, before moving on to the Senate of the Republic.
The purpose is to regulate the relationship between landlords and tenants when renting a home or commercial property, also seeking to modernize this instrument and adapt it to the needs of the current rental market in the Dominican Republic.
Deputy Amado Díaz, who chairs the committee, told El Inmobiliario that the committee would meet yesterday at 2:00 pm.
After concluding the public hearings last Thursday, July 3, where various actors were heard for two hours, Díaz stated that the meeting would be to analyze the proposals made by various sectors and from there deliver a final report on the project.
Among the positions expressed are those of Young Entrepreneurs (ANJE), the Dominican Association of Housing Builders and Promoters (Acoprovi), the Dominican College of Notaries, the Patria Libre movement, among others.
Similarly, last week the Institutionalism and Justice Foundation ( Finjus ) expressed its concern about some of the provisions contained in the project, considering that they could generate "adverse effects" if they are not corrected and clarified appropriately.
Yesterday, the Association of Real Estate Agents and Companies (AEI) also stated its position on the bill, highlighting 5 key points included in the legislative proposal that, in its opinion, should be reviewed:
1-Disproportionate criminal classification
prison sentences of three to five years on property owners who fail to fully exhaust legal eviction proceedings. According to the AEI (Association of Real Estate Professionals), this measure would infringe upon fundamental property rights and could discourage formal real estate investment, arguing that criminal penalties should not be applied to violations of civil procedures.
In that regard, he proposes keeping this aspect exclusively within the civil . “Violent acts or physical assaults are already automatically covered by general criminal law and its Penal Code,” he asserts.
2-Alteration of the contractual expenses regime
It emphasizes that automatically assigning legal expenses to the landlord contradicts Article 1593 of the Civil Code, pointing out that it would alter the principle that the party with the primary interest in the transaction bears the costs. In this regard, it suggests respecting the traditional practice where the tenant assumes these legal expenses.
3- Risk of setting a precedent in real estate sales and evasion of real estate services
whoever hires pays’ rule could set an unfavorable precedent in sales and negatively affect the bill for the regulation of real estate services and brokerage currently before Congress,” argues the AEI, maintaining that this measure could encourage buyers and tenants to contact owners/builders directly to avoid paying “commissions,” bypassing the role of the real estate agent or advisor.
It recommends defining the scope to avoid broad interpretations and protect professional real estate brokerage.
4-Omission regarding deposit interest
According to the AEI document , the draft bill does not include the interest generated by the security deposit in favor of tenants, which is a step backward compared to Law 4314 that did recognize these rights, so the entity believes that this express provision on interest on the deposit should be included.
5-Conceptual confusion: deposit vs. advance payment
According to the AEI, the bill does not clearly distinguish between a security deposit and an advance payment of the first rent, which " hinders" the standard "2+1" scheme (two monthly deposits + one prepayment), and therefore requests clarification that the limit of two monthly payments does not include the first month of rent.
The organization states that it supports the modernization of the rental system but considers it essential to make the indicated adjustments to guarantee the legal certainty required by the sector, avoid negative effects on real estate investment, maintain the balance between the rights of owners and tenants, and preserve the professional market practices that do work.
“It is essential to correct these aspects before final approval in order to achieve a law that truly contributes to the sustainable development of the Dominican real estate sector, benefiting both owners and tenants,” the statement concludes.
Finjus
Last week, the Institutionalism and Justice Foundation ( Finjus ) expressed its concern about some of the provisions contained in the project, considering that they could generate "adverse effects" if they are not corrected and clarified appropriately.
In a statement, the organization outlined a series of observations regarding the project . "We consider it essential substantive and procedural aspects contractual autonomy , legal certainty , and the operability of the judicial system," Finjus .
He highlighted several points that, in his opinion, should be reconsidered before their final approval.
