The AEI went from having 55 companies in 2020, to having 230 affiliated companies today, impacting between 3,500 and 3,800 real estate agents .
SANTO DOMINGO – Cases of alleged irregularities in the Dominican real estate sector have dominated the national agenda in recent times, with the amounts involved in alleged scams growing ever larger, while government policies regarding the growth of the real estate market in the Dominican Republic remain perpetually dormant.
The construction sector represents one of the most dynamic markets in the country and a major contributor to the Gross Domestic Product (GDP), registering significant growth in the production of real estate projects throughout the country over the last three years.
In addition to the above, there is the growth of tourism, which last year reached more than 11 million visitors to the country, which has also generated the construction of hotel complexes, buildings intended for short rental, villas, among various buildings and amenities; added to the arrival of large foreign capital motivated by the economic and political stability that the Dominican Republic presents.
Given this scenario, the real estate sector has experienced extraordinary growth, as evidenced by the figures from the Association of Real Estate Agents and Companies (AEI). In 2020, the organization had only 55 member companies, a number that has now risen to 230, encompassing between 3,500 and 3,800 brokers.
In the case of independent real estate agents, five years ago there were only 245 members of the Association, a figure that has now increased to 1,385.
Getting in is not a problem
The real estate sector is one of the easiest to enter due to the lack of regulatory mechanisms. One of the main concerns of its leaders and managers remains the lack of training and the abundance of unqualified "real estate agents" who enter the market driven solely by a desire for advancement, some lured by the high commissions involved in property sales.
This situation places this sector in a highly vulnerable position with respect to business owners, agents, and investors, as it is a space where there are many "hooked" individuals who improvise companies to engage in the trade and overnight appear developing construction projects and selling properties without the proper preparation, knowing that for human beings, buying a home represents the most longed-for and sacred dream.
The role of government
In response to the outbreak of the IndisArq case, revealed by Nuria Investigación in October 2023 regarding non-compliance and irregularities in housing projects , the Vice President of the Republic, Raquel Peña, announced the formation of a technical committee to address cases of real estate fraud.
She said that, on the instructions of President Luis Abinader, the Dominican government would not allow these criminal acts to occur. “We are not going to continue permitting this type of wrongdoing,” the vice president emphasized, though her statements were quickly forgotten.
Expedite laws and increase punishment
For more than 20 years, the AEI and its representatives have made various attempts to achieve the approval of a law that regulates real estate activity in the country, with unsuccessful attempts.
Currently, a bill to regulate real estate brokerage is being considered. According to the Special Commission that studied it last year, the bill is ready for consideration based on the favorable report submitted; it is expected to be considered in the legislature that begins on February 27.
“The committee issued its positive report on the bill in question during the first week of December. It is now up to the coordinating committee to place it on the agenda,” declared Representative Braulio Espinal, who chaired the committee, last December.
Adding to the lack of a law regulating these agents is the weakness of existing legislation regarding penalties for fraud. The current Dominican Republic Penal Code, in Article 405, establishes a penalty of six months to two years of correctional imprisonment and a fine of twenty to two hundred pesos for fraud.
New laws promise
Article 55 of the law that would regulate Real Estate Intermediation in the country and which is currently being studied by the Justice Committee of the Chamber of Deputies, states that real estate crimes that have "aggravating circumstances" will be punished with up to 10 years in prison and up to 100 minimum wages, taking as a reference what is paid in the public sector.
Likewise, the bill on the prosecution and judicialization of criminal organizations, which the Executive Branch submitted to the National Congress last December, establishes in section VI "on the crimes of mass fraud" that those who, using assumed names and qualities or employing fraudulent practices, by action or omission, with the intent to profit, use deception or fraudulent maneuvers to attract assets from a plurality of people, with the promise of providing them with a pecuniary benefit, incur the crime of mass fraud.".
The law, whose purpose, it says, is to establish effective rules for the detection, prosecution, judicialization and punishment of acts of organized crime typified therein, states that those guilty of mass fraud will be punished with sentences of 3 to 10 years in prison and a fine of one hundred to 3 thousand minimum wages.
Guilds in action
In April of last year, the Dominican Association of Housing Builders and Developers (ACOPROVI) signed an agreement with five of the main entities in the country's construction and real estate sector, with the aim of strengthening the industry and providing more security to buyers and investors.
The objective was to promote best practices in the construction and real estate sector, such as issuing information, parameters, legal mandates and educational actions to prevent real estate scams.
The organizations involved said that going forward they will jointly inform and guide on this matter, so that Dominicans have a reliable source of information to evaluate and choose their real estate solution providers
The following also signed: the Association of Housing Promoters and Builders of Cibao (APROCOVICI), the Association of Real Estate Agents and Companies (AEI), the Association of Builders and Developers of La Altagracia (ADECLA), the Dominican Association of Short Rents (ADORECO), and the Dominican Chamber of Construction (CADOCON).
Cases continue to rise
In January of last year, the Public Prosecutor's Office launched "Operation Nest," whose investigation revealed that the companies INDISARQ, CRD Equipos Pesados, Grupo Wirmar, and Auto Xpers AFM were created by a network to execute a fraudulent scheme to the detriment of more than 300 victims.
According to a press release from the Attorney General's Office, the real estate projects offered by the network were located in Santo Domingo East. In the case, Judge Rigoberto Sena of the Permanent Attention Office of the National District ordered 18 months of pretrial detention for Emmanuel Rivera Ledesma, the main suspect in the alleged network. He is currently serving his sentence at the Najayo-Hombres Correctional and Rehabilitation Center (CCR). The suspects allegedly defrauded more than 300 people of an amount that, according to the prosecution's file, exceeds RD$700 million.
US$18 million in properties at prices well below market value
On February 7, the Public Prosecutor's Office launched Operation "Cheetah," bringing to light a new real estate fraud scandal. The file requesting coercive measures places the figure at more than US$18 million, involving the alleged fraud that would have affected more than 120 people, through the firm Novasco Real Estate SRL.
Four people have been arrested in connection with the events: Loany Lismeiry Ortiz Nova, Marisol Nova Nolasco, Rocío del Alba Rodríguez de Moya, and Yves Alexandre Giroux. The Public Prosecutor's Office has requested 18 months of pretrial detention for them. The hearing to determine the pretrial measures will be held tomorrow, Tuesday the 18th, in La Romana.
