The real estate market and its contracts are evolving. How can the ideal balance between operational efficiency and legal certainty be achieved?
By Reyna Echenique
Special for El Inmobiliario
The evolution of the Dominican real estate sector presents us with an interesting challenge: the distinction between a promise to sell and a contract of adhesion. This distinction, far from being merely academic, has substantial practical implications for the healthy development of the market.
In reviewing hundreds of real estate contracts, I've observed how this distinction directly impacts both buyers and developers. The patterns are revealing: while some seek greater operational agility, others need flexibility in negotiations. This daily reality in real estate law practice highlights the need to find a balance.
The fundamental legal framework
Our Civil Code clearly establishes in its article 1589 that "a promise of sale is equivalent to a sale, provided both parties have mutually consented to the object and the price." This fundamental provision underscores the bilateral nature and binding character of the promise of sale.
On the other hand, Law 358-05 on Consumer Protection defines adhesion contracts as those whose clauses have been unilaterally established by the supplier, without the consumer being able to discuss or substantially modify their content.
ANATOMY OF REAL ESTATE CONTRACTS
─────────────────────────────────────────────────────
PROMISE OF SALE ADHESION CONTRACT
─────────────────────────────────────────────────────
✓ Bilateral negotiation × Predefined terms
✓ Agreed guarantees × Limited guarantees
✓ Agreed terms × Fixed terms
✓ Mutual modifications × Unilateral changes
─────────────────────────────────────────────────────
The practical distinction
The current market reveals an interesting trend in contract structure. On the one hand, adhesion contracts offer operational efficiency and uniformity in transactions. On the other hand, the traditional sales agreement allows for a flexibility that many consider necessary for investments of this magnitude.
Towards a balanced model
Dominican jurisprudence offers valuable guidance on this topic. The Supreme Court of Justice has established criteria that seek to balance buyer protection with the need for efficiency in real estate transactions.
The reality of the market
The Dominican real estate sector is showing an innovative trend: current contracts appear to combine elements of both legal frameworks. This natural evolution responds to the needs of both developers and buyers, seeking to balance efficiency and protection.
Opportunities for improvement
Modern developers understand that operational efficiency is not incompatible with adequate legal protection. In fact, a balanced contractual framework can enhance market confidence and facilitate transactions.
A shared path
Are we facing an opportunity to develop contractual instruments that satisfy the needs of all parties? How can we evolve towards contracts that combine the best of both legal frameworks?
The Dominican real estate market is mature enough to address this challenge. Collaboration between developers, buyers, and legal professionals can lead us toward contractual models that foster the sector's sustainable growth.
The author has over 18 years of experience as a lawyer specializing in real estate law and as a real estate consultant. She is the founder of Echenique Group, which focuses on providing preventative legal security to investors and buyers. This article is part of a series on legal security in real estate investments, where Reyna Echenique shares her expertise in the sector.
