The real estate market and its contracts are changing. How can we leverage these changes to maximize legal security for our clients' investments?
By Reyna Echenique
Special for El Inmobiliario
Following our previous article analyzing the dilemma between promises of sale and adhesion contracts in the real estate sector, we conclude this series on legal certainty by exploring how 2024 marks a turning point in our industry. The development contracts we handle daily, traditionally known as promises of sale—both bilateral and unilateral, according to Articles 1101, 1102, and 1589 of the Dominican Civil Code—are undergoing a fascinating transformation. As professionals in the sector, we know that these legal instruments, backed by decades of jurisprudence based on the principle that "a promise of sale constitutes a sale," are merging our traditional legal strength with innovations that meet the demands of our modern clients, without losing the contractual essence established by Article 1134 of the Civil Code.
In our daily practice, we observe how serious, responsible, honest, and ethical developers—those committed to the sector and not just trying to make something work—are adapting these legal instruments, maintaining a balance between the autonomy of will under Article 1134 of the Civil Code and the public policy provisions of Law 358-05 on Consumer Protection. This evolution reflects a more sophisticated market where we all seek greater transparency and legal certainty for our clients.
Contractual innovation
As advisors to the sector, we see that the modernization of our real estate contracts is based on solid legal principles while incorporating innovative elements:
- Express termination clauses, article 1183 of the Civil Code, allow us to clearly define the consequences of non-compliance
- Specific guarantees supported by Article 1625
- Suspensive conditions article 1168 that protect all parties during the development
- Mechanisms for consensual modification that we facilitate in accordance with article 1134
Trend 2024
Our market is evolving while respecting the traditional legal framework and adopting new practices:
- Implementation of Law 126-02 on Electronic Commerce to expedite our digital signatures
- Tracking systems that improve our communication with the customer
- Modification protocols that allow us to respect mutual consent
- Alternative dispute resolution mechanisms according to Law 489-08
A new balance
In our professional practice, modern contracts achieve a balance between efficiency and legal protection:
- Detailed technical specifications that help us prevent hidden defects, article 1641
- Schedules that constitute essential deadlines for our projects, article 1139
- Staged guarantees that strengthen our civil liability
- Modification processes that maintain contractual good faith, article 1134
Commitment to excellence
As professionals in the sector, it is important to recognize that our leading Dominican construction companies are spearheading this contractual evolution with exemplary commitment. The developers we work with, in addition to their professionalism, demonstrate that while maintaining the retention of title provisions stipulated in Article 1583 of the Civil Code as a legal safeguard, they implement flexible practices that balance investment protection with the rights of our buyers.
In our experience, these good practices include:
- Clear refund procedures in justified cases
- Flexibility in payment schedules to accommodate unforeseen situations for our clients
- Transparency in the necessary technical modifications
- Personalized support throughout the entire process
Experience shows that this balanced approach, far from harming business interests, strengthens the reputation of all involved and generates greater confidence in our market, attracting more investment and contributing to the growth of foreign investment. Developers who adopt these practices not only comply with the law but also set higher standards that raise the quality of our real estate sector as a whole.
A future eye
As an industry, we are moving towards greater sophistication while maintaining our fundamental legal safeguards. Technological integration strengthens our legal certainty, while automation allows us to be more efficient without compromising our clients' informed consent. As industry professionals, we have a unique opportunity to lead this transformation.
I invite my fellow lawyers and real estate professionals to share experiences and best practices that will strengthen our market. The contractual evolution we are experiencing is not a break with our legal tradition, but rather its natural adaptation to the modern needs of our real estate market. Together we are stronger and can raise the standards of our industry and build a more solid future for the Dominican real estate sector.
Author Reyna Echenique has over 18 years of experience as a lawyer specializing in real estate law and as a real estate consultant. Founder of Echenique Group and Secretary of the AEI Board of Directors, she focuses her work on providing preventative legal security to investors and buyers. This article concludes a series on legal security in real estate investments.
