SANTO DOMINGO – Looking at the recent trends in the Dominican real estate market, rentals have become one of the most sensitive aspects of the sector. The growth of tourism, pressure on urban housing, and sustained interest from local and foreign investors have increased the demand for residential and commercial properties, especially in strategic areas of the country.
This scenario, marked by an increasingly dynamic market, led the Dominican State to update the legal framework regulating leases. Thus was born Law 85-25 on Real Estate Leases, legislation that seeks to formalize a historically informal relationship and defines rules on how and when the price of rent can be adjusted.
10% as a supplementary limit
One of the key points of Law 85-25 is that rent increases cannot be left to the landlord's discretion when the contract does not specify how adjustments will be made. In such cases, the law sets a cap of 10% of the current rent, a measure designed by the legislature to prevent arbitrary or abusive increases upon renewal.
This adjustment can only be applied upon renewal of the contract, never during its term. While the agreement is active, the agreed price must be maintained, which introduces greater predictability for both parties.
In practical terms, a rent of RD$30,000 could only increase to RD$33,000 if the contract does not include another mechanism for increasing the rent.
When the contract does define the increases
The law also recognizes the autonomy of the parties' will. This means that landlords and tenants can agree on different conditions within the contract, even percentages higher than 10%, as long as they are clearly established in writing.
Rather than imposing a single percentage, the regulations encourage the drafting of precise contracts that anticipate how adjustments will be handled and reduce the margins of conflict.
Key differences with commercial leases
One aspect that often causes confusion is that this supplementary limit primarily applies to housing. In commercial contracts, if no increases are stipulated, the law does not set an automatic cap, which allows for greater contractual negotiation and can lead to different interpretations when applying the article.
A market pressured by housing demand
The debate on rent increases cannot be separated from the economic context. The dynamism of tourism, urban expansion, and the development of new real estate hubs have increased the pressure on the housing supply, raising the pressure to adjust prices.
This scenario reinforces the need for clear rules that provide stability without hindering market profitability.
What landlords and tenants need to know in 2026
For owners, the law means more rigorous planning: drafting well-structured contracts, defining readjustment mechanisms from the outset, and understanding that if these are not stipulated, the legal limit of 10% will be activated.
For tenants, understanding that this percentage only applies when the contract is silent — and that it applies at the time of renewal — becomes a key reference to anticipate rent variations and verify compliance with what was agreed.
In short
Law 85-25 on Real Estate Rentals establishes specific criteria for rent increases in the Dominican Republic:
• If the contract does not include an adjustment clause, the increase cannot exceed 10%, as this serves as a supplementary limit.
• The increase can only be applied upon renewal of the contract, never during its term.
• Arbitrary increases are not permitted when there is no previously agreed-upon mechanism.
• If the contract does stipulate adjustments, even exceeding 10%, the agreement between the parties will prevail.
• The regulations promote clear contracts to avoid future disputes.
• In commercial, the law does not establish an automatic cap if no increases are stipulated.
Beyond the legal aspects, Law 85-25 introduces a significant change in how rental agreements are structured. Rent adjustments are no longer based on informal practices but are now integrated into a framework where contractual provisions play a leading role in an expanding real estate market.
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