It suggests modifying Law 108-05 on Real Estate Registration to incorporate new elements that strengthen legal security.
SANTO DOMINGO– The purchase and sale of off-plan and under-construction properties represents a significant segment of the Dominican real estate market. However, the lack of an adequate provisional and preventative registration system has resulted in numerous cases of fraud and multiple sales of the same property, undermining confidence in the sector and causing millions of dollars in losses for buyers.
This is the opinion of real estate lawyer Reyna Echenique, who asserts that the Dominican registry system, which she describes as robust in many aspects and with advances towards security, lacks specific preventive mechanisms for off-plan and construction sales.
In that regard, he advises that Law 108-05 on Real Estate Registration be amended to incorporate elements such as the Dubaii model, which ensures that real estate investments are carried out with legal guarantees.
The real estate consultant also proposes the start of a gradual legal reform process, the development of pilot projects in specific areas, the establishment of technical collaboration with Dubai, and the creation of training and awareness programs.
Reyna Echenique. (EXTERNAL SOURCE).
Echenique explained that in her capacity as Secretary of the board of directors of the Association of Real Estate Agents and Companies (AEI), she formulated a proposal to modify Law 108-05 on Real Estate Registration that identifies three essential pillars of the Dubai model that would close the existing legal gaps in the Dominican nation.
The first recommendation is the condominium's establishment off-plan, which also involves the requirementof a prior license that guarantees the viability of the project and facilitates the safe marketing of future units.
“The second element is what allows for the payment of transfer taxes from the initial stage with the preliminary contract, demonstrating the formal commitment of the buyer and the project, in addition to generating early revenue for the State. Forcases with a CONFOTUR preliminary contract, a provisional exemption certification is required,” the specialist told El Inmobiliario .
The third aspect would consist of the implementation of a provisional registration system for contracts on plans and construction for theimmediate protection of the buyer's rights and the effective prevention of multiple sales.
“These measures proposed by the AEI directly address the vulnerable points of the current system, such as closing legal loopholesand eliminating ambiguities that are exploited by unscrupulous developers and that tarnish the reputation of those who are doing things right,” he emphasizes.
"It also alludes to thecomplete traceability that would allow tracking from conception to delivery of the project andearly protection, ensuring the buyer's rights on plans and under construction from the very beginning," said the CEO of Echenique Real Estate.
According to Echenique, these measures would have an impact on foreign investment. “Adopting Dubai’s provisional and preventative registration system, along with modernizing Law 16-95 on Foreign Investment, would position the Dominican Republic as a preferred destination for international real estate investment,” he stated.
He specified that this strengthening of the legal framework would have positive repercussions such as greater confidence from foreign investors in the Dominican real estate market , a reduction in the perceived risk in off-plan investments , and alignment with international standards of legal security.
It also highlights its differentiationfrom other Caribbean markets, itspositioning as a real estate investment hub , andits attraction to top-tier international developers.
In the case of buyers, Reyna Echenique mentions the benefits of legal security from the beginning of the purchase, protection against multiple sales, and investment guarantee.
For the real estate market, it would generate greaterconfidence in off-plan purchases, areduction in litigation, and arevitalization of the sector; while for the State, it would represent betterfiscal control, areduction in legal cases for real estate fraud, and amodernization of the registration system.
“The implementation of a preventative registration system based on the Dubai model, supported by concrete proposals from the AEI, represents a historic opportunity to transform the Dominican real estate market. Collaborative work between the private sector and the authorities has identified precise solutions that would virtually eliminate real estate scams involving off-plan properties,” concludes the real estate law specialist.
