Where do we leave the guarantee that investment risks are being well managed?
SANTO DOMINGO– Lawyer Paola Romero, president of the Certezza Group, believes that the Dominican State should begin to regulate real estate sales, as it regulates other investment markets, after arguing that real estate investments are advancing in the country without due diligence on the properties and the parties involved.
“Real estate agents are becoming more and more tenacious in sales, developers are increasingly aware of the profitability of off-plan projects, and construction companies are increasingly happy because pre-sales allow them to meet their current commitments in the construction process, and all of that is very good,” she explained when consulted by El Inmobiliario.
He added: But where do we leave the guarantee that investment risks are being well managed?
The legal professional stated that the problem with legal security in the Dominican Republic is that real estate investments are advancing rapidly without considering due diligence on the properties and the parties involved, which would ensure transparency and legality in the transactions.
He opined that legal certainty is based on clarity to guarantee confidence in a business transaction by efficiently managing the risks involved.
Romero understands that ensuring legal certainty for the parties involved is the job of the buyer and seller, who must carry out the due diligence that corresponds to them.
Romero was consulted regarding the case that has come to public attention, which points to a mafia network, whose case is being investigated by the judicial authorities, which they accuse of trying to deprive the shareholders of the Costa Dorada company in Baní, Peravia province, of their rights.
Business leaders consulted about the incident drew attention to the need to strengthen legal security in the country, given that it could negatively impact the investment climate in the Dominican Republic.
For Romero, this is not a failure of legal certainty, "since both the chamber of commerce and the General Directorate of Internal Taxes (DGII) acted apparently on the basis of legal documentation that was provided for the corporate transformation and whose falsity is being debated in the courts.".
Regarding the ruling, he said he agreed that the court's interpretation of the shareholders' status was erroneous because they could not act as shareholders of a company whose shares, although illegitimate, were not registered in their names. "Therefore, filing a personal complaint was the appropriate course of action, and that is what was done.".
He added that the case in question does not demonstrate a simple "real estate scam," whose constituent elements are far removed from a criminal network as complex as the one that unfolded in this case. "Here we are talking about actions of a commercial company that also holds real estate assets," he emphasized.
The case
Falsification of signatures of deceased persons and notaries, use of names and identity cards of people to place them as supposed shareholders, creation of fictitious corporate history, among other violations, involve the fraud against the company Costa Dorada, whose property covers more than 6 million 300 thousand square meters in the beach area in the community of Sabana Buey, Peravia province.
To put their plan into action, the criminal network allegedly prepared more than a hundred false documents, including stock sales contracts, minutes of meetings, financial statements, sworn statements and other corporate documents that alter the company's corporate history.
The Mayol and Serrano families, legitimate owners of the Costa Dorada company, stated that more than 5 years have passed since they filed the complaints and they are still fighting for the courts to recognize their rights.
According to the plaintiffs, those involved went so far as to register the entire share capital of the company in their own name with the Mercantile Registry and the General Directorate of Internal Taxes (DGII), thereby depriving the legitimate partners of their shares.
