SANTO DOMINGO.- Two legislative initiatives that would have taken the Dominican Republic a significant step towards strengthening the real estate sector in the country expired last year in the Chamber of Deputies due to a lack of consensus among legislators.
On one hand, there is the draft General Law on Real Estate Rentals and Evictions, whose latest version was submitted in August 2022 by the current president of the lower house, Alfredo Pacheco, and which expired on July 26 of last year due to disagreements in the special commission created to study it.
The piece, which has been under study for about 20 years, would repeal Law No. 4314, of October 22, 1955, and Law No. 17-88, of February 5, 1988, and Decree No. 4807. The first law cited and the presidential opinion date from the Trujillo era.
Among the project's objectives are reforming existing outdated regulations to stimulate national and foreign private investment in the development of real estate projects intended for rental, seeking to develop policies from the State that facilitate the supply of housing units and thereby lower rental costs.
The interest in the legislative piece was evident during the plenary session of the Chamber of Deputies on May 24, 2023, when that body declared the bill urgent, approved it in its first reading, and sent it back to committee for the purpose of holding public hearings.
Luis Henríquez Beato, a member of the PLD party who was part of the special commission that studied the bill for eight months, admitted in an interview with El Inmobiliario last September that the reason the initiative failed to become law is because disagreements persist.
“The tenant’s housing rights and the landlords’ property rights. The balance of these two rights is a source of great jealousy among legislators who defend one side or the other,” he asserted.
There are objections to the bill from various sectors, and some are suggesting it be strengthened. This has been expressed by members of the Association of Real Estate Agents and Companies (AEI), the Association of Housing Builders and Developers (Acroprovi), the Institutionalism and Justice Foundation (Finjus), and others.
Reyna Echenique, secretary of the Board of Directors of the AEI, stated that congressmen must provide the country with a new legal framework that takes into account and respects the property rights of owners and the usage rights of tenants.
On June 28, the special committee of the Chamber of Deputies that studied the bill received comments from about 20 sectors during public hearings.
Acoprovi, represented by its president Annerys Meléndez, lamented during that hearing that there is little real estate investment due to the lack of existing legal guarantees.
On stage, the bill's proponent, Alfredo Pacheco, president of the Chamber of Deputies, spoke along those lines, admitting: “Housing rentals in the Dominican Republic are currently a disaster.” He emphasized that his bill would establish a balance between the rights of landlords and tenants.
The Institutionalism and Justice Foundation (Finjus) understood that the bill should be improved because by establishing bureaucratic protocols it believes it would affect the productive sector and harm investment.
Meanwhile, the bill continues to languish amidst the disagreements of members of Congress, plunging the country into a lack of an instrument that responds to current market demands.
Law to regulate agents
The Association of Real Estate Agents and Companies (AEI) had hoped that 2023 would be the year in which the country would have the approval of the bill that regulates real estate services and the brokerage contract in the country, an instrument that keeps the Dominican Republic without a law, and contributes to putting the reputation of prestigious real estate firms at risk, as there is no control in the practice of real estate brokers.
“This time we met with the committee studying the project. It is almost certain that we will have a law this year. The legislators are focused on regulating the market due to tax issues and because it is the only loose link, and I believe we will achieve it,” Alberto Bogaert, president of the organization, told El Inmobiliarioin June 2023.
He emphasized that this would "put an end to the disorder in real estate transactions in the country.".
He explained that Acoprovi and the AEI exchanged the observations they have made on the legislative piece, "so that there has been consensus between both unions in the amendments formulated, seeking that it is a law that fits the reality and needs of the industry.".
“We have reviewed the bill and we are at a point of consensus that I believe we will achieve,” declared Bogaert, who considered that this legislative instrument will serve to bring order to the profession, by establishing the requirement to carry a license for those who wish to enter the career.
Received in the Chamber of Deputies
Upon receiving a delegation from the sector in May 2023, the president of the Justice Commission of the Chamber of Deputies, Alexis Jiménez, stated that in the next two weeks they would be crossing the critical path in the study of the project to achieve its approval in the shortest possible time.
Since 2021
The bill currently under consideration, which regulates real estate services and brokerage contracts in the country, was introduced on August 18, 2021, and was authored by the representative for the National District, Lourdes Serulle.
The purpose of this legislation is to protect the legal relationship between the proposer and the real estate broker or their agents, and the confidence of the real estate market, derived from the legal transaction that arises from the intermediation of real estate brokers or their agents.
It includes the regulatory, organizational and management regime of the real estate brokerage activity applicable to real estate intermediaries operating in the national territory, the requirements for its exercise, the rights and obligations of brokers and agents; as well as the brokerage contract; in addition to the quality control of such services.
Just like the rental bill needs to be reintroduced this year to the National Congress for study, discussion and approval.
Cover photo: AEI and Acoprovi Commission together with the Justice Commission of the Chamber of Deputies (External source).
