Taken from Hoy
SANTO DOMINGO.- The Dominican Association of Trust Companies (Asofidom) advocates for making pre-purchase commitments through trusts mandatory by law for all types of real estate projects, in order to ensure transparency and prevent real estate scams.
Lynette Castillo, president of the Asofidom Administrative Council; Christian Molina, executive director and Andrés Rivas, vice president of the Council, said that although Law 189-11 on the Development of the Mortgage Market and the Trust establishes that only low-cost housing projects should be developed through trusts, medium and high-cost projects executed under that figure are growing.
However, they argue that if the law requires all real estate projects to be done through a trust, it would be protecting buyers from potential scams.
But also, if the project is ultimately not carried out for any other reason, the buyers could recover the money they have already paid in the pre-sale, because those funds will be deposited in an account managed by a trust, the representatives said, according to the Hoy publication.
They cited the example of Colombia, a country where the trust acts as a third party to protect the interests of all parties involved, ensuring the proper execution of a real estate project. Those involved in this case are the construction company, the landowner, the buyers, and the bank financing the project.
Asofidom executives emphasized that the trust guarantees that the money paid by future buyers will be used exclusively for the projects, thus offering greater security.
"This is because the trust company conducts an evaluation of the builder to determine their solvency, ensure the project has all the necessary permits and financing, and that there is a sales plan in place to bring the project to a successful conclusion. Otherwise, the money already paid would be returned to the buyers without any problems," they explained.
They indicated that at the close of 2022, RD$150 billion of the RD$300 billion managed by the trustees corresponded to real estate trusts.
Of those RD$150 billion, 60% were for low-cost housing, thanks to the benefits and security offered by Law 189-11 to buyers.
While 40% of that amount corresponds to housing projects that are not low cost, they attribute this to the fact that builders and buyers are learning the added value that the trust represents.
