By: Reyna Echenique
Special for El Inmobiliario
Before delving into the fascinating world of real estate in the Dominican Republic, it's important to clarify that this article focuses primarily on the purchase and sale of existing properties, or the popular "resales." If you're considering buying a property off-plan or under construction, some of these tips will be helpful, but keep in mind that this process has its own specific characteristics, which we'll address in a future article.
Now, let's talk about those houses, apartments, and plots of land that already have their own story…
Have you ever heard that real estate horror story where someone bought their dream home only to discover it was mortgaged to the rafters? Or the one where a seller lost the perfect buyer because their title deed had a typo? Well, brace yourself, because in the Dominican Republic's real estate market, these stories are more common than you think. But don't worry, we're here to prevent you from becoming the star of the next real estate trailer.
And if you think that's bad, wait until you hear what happened to Juan La Romana. He bought a beautiful beachfront villa, everything seemed perfect… until he discovered that the name on the title certificate belonged to someone who had died years before. Surprise! It turns out he was the third "owner" in a chain of sales that were never legally registered.
Or let's talk about Maria, who thought she'd made the deal of a lifetime in Santo Domingo Este. She signed the contract, paid, and when she went to register her new property… boom! She found out she was the fourth in a line of buyers, all with contracts in hand, but none officially registered.
And let's not forget Pedro, who, three years after buying his dream apartment, decided to sell it. Guess what? His marital status on the title certificate was wrong. A simple mistake turned into months of headaches and thousands of pesos in legal expenses.
Sounds like a thriller, right? But don't worry, we're not here to scare you, but to equip you with the knowledge you need to give your real estate story a happy ending. We're going to reveal the secrets that will turn you into an expert navigator of the turbulent waters of the Dominican real estate market.
1. The title certificate: your lifeline in the sea of properties
In the Dominican Republic, a degree certificate is like a life preserver at sea. If it's in good condition, it keeps you afloat. If it has holes… well, you can imagine, you'd better know how to swim.
Buyer tips:
- Request a "Legal Status Certificate" from the Title Registry. It's like requesting the medical records of your future home. But wait, there's something even better: the "Priority Reservation Certificate." It's like a snapshot of the property's legal status. It tells you who the current owner is, if there are any legal issues (like mortgages or liens), and best of all, it "freezes" that information for 15 business days. Why is this great? Imagine you're about to buy a house. You request this certificate, and it tells you that everything is in order. During those 15 days, no one can register anything new about that property without your knowledge. It's like putting the property on pause while you complete your transaction. It's your insurance against last-minute surprises!
- Verify that the seller is indeed the owner. And no, a faded photocopy of the title isn't enough. They should show you the original, and it must be the same person listed on the title.
- Look for “liens,” “encumbrances,” “litigation,” or “preliminary notices.” These are like hidden debts on the property. You wouldn’t want to inherit someone else’s debts or litigation, would you?
Tips for sellers:
- Review your title as if you were going to submit it to a spelling bee.
- Is your name spelled correctly? Is your marital status up to date? Are all the digits on your ID number in the correct order?
- If there are any mistakes, correct them before putting up the "For Sale" sign or giving it to a real estate agent. Remember Peter and his costly lesson about typos.
2. The chain of ownership: more tangled than a soap opera
This is where Juan and María's stories become relevant. It's not enough for the seller to have a piece of paper that says he's the owner.
- Investigate the property's history like a detective. How many times has it been sold? Are all those transfers properly recorded?
- If there's a chain of unregistered "sales contracts," it sets off all the alarm bells. There are taxes to pay, and even surcharges. It's like playing telephone, but with your money on the line.
- Consult with a lawyer specializing in real estate law. Yes, it's an extra expense, but it's much cheaper than buying a property that's not registered or ending up in a legal battle.
3. Demarcation : when fences are more important than the garden.
Demarcation is like marking your territory, but legally. Law 108-05 considers it essential, and rightly so.
- If the property isn't surveyed, consider having it surveyed. It's like tailoring a suit to your land.
- Properly defining property boundaries prevents arguments with neighbors and future headaches when you want or decide to sell. Trust me, you don't want to discover your jacuzzi is in your neighbor's yard.
4. Investigate like you're Sherlock Holmes
Before signing any document, put on your detective hat:
- Are the taxes up to date? Nobody wants to inherit someone else's debts, not even those owed to the government. Verify that the Property Tax (IPI) is paid. It's like buying a car and discovering it has years of unpaid registration fees; that's not the kind of inheritance you want.
- Are all the utilities paid? Ask for proof of disconnection or transfer of the contract. Imagine moving into your new home only to discover that the previous owner owes six months of electricity, or that the water has been cut off for weeks because the previous owner didn't pay. It's like arriving at a restaurant and being told you have to pay the previous customer's bill. That's not the kind of surprise you want in your new property.
If it's an apartment, investigate the condominium's situation:
- Are you up to date with your obligations?
- Are there any outstanding extraordinary fees?
- How is the building's reserve fund?
- Are there any planned renovation projects that might result in extra fees?
Remember, buying an apartment also means buying a share of the common areas, with all their benefits and drawbacks. You don't want to move in and find your first gift is an extra fee to fix the elevator that's been out of order for months or the water pump that's stopped working.
If it's a house, check:
- The state of the boundaries. Are they clear and respected?
- Are there any conflicts with the neighbors regarding property boundaries?
- Are all structures (such as fences or annexes) within the correct limits?
For land:
- Make sure the boundaries are clearly defined and marked.
- Check if there are any usage restrictions that might affect your future plans.
- Investigate the history of the land. Have there been any attempted invasions or squatters?
In tourist areas or near the beach:
- Verify that the property complies with specific local regulations.
- Make sure there are no issues with environmental law, especially for beachfront properties.
Remember, in the Dominican real estate market, information is power. It's better to ask questions now than to be naive and regret it later.
5. The contract: where even the smallest comma matters.
This is where Law 108-05 comes into play. This law is like the umpire in Major League Baseball: it sets the rules of the game.
- Describe the property as if you were talking to a blind person. Every detail counts.
- The price and payment method must be clearer than the water on Cayo Levantado.
- Make sure a good real estate lawyer drafts the contract. They're like the master of ceremonies for your purchase.
- Establish who is responsible for what. It's like a prenuptial agreement, but for your home.
6. The grand finale: closing and registration
This is like the wedding ceremony of your transaction:
- Pay the transfer taxes. The state always wants its share ofel inmobiliarioprofits.
- Register everything with the Title Registry, and don't hide the contract under your mattress. If it's not registered, it's as if it never happened. You don't want your purchase to be the best-kept secret in the Dominican Republic, do you?
A golden tip : think of others
Here's a secret that few share: in a sale, everyone wins if everyone looks out for each other.
For sellers:
- Be transparent about the legal status of your property. Honesty is not only the best policy, it also prevents future headaches.
- If there's anything that needs correcting on your title, do it before putting the property up for sale. It's like fixing your car before selling it.
For buyers:
- Be patient if the seller is correcting something on your title. Sometimes, bureaucracy is slower than traffic on Lincoln on a Friday afternoon.
- Ask all the questions you can think of. There are no silly questions when it comes to investing your savings.
For real estate agents:
- Be the bridge of knowledge. Your role goes beyond showing properties; you are the expert trusted by both buyers and sellers.
- Do your own research. Before listing a property in your inventory, verify its legal status. It's better to uncover problems before your client does.
- Stay up-to-date. Laws and regulations change; staying current makes you invaluable to your clients.
- Cultivate a network of professionals. Keep trusted lawyers, appraisers, and other experts on hand. Sometimes, knowing who to call is just as important as knowing what to do.
- Educate your customers. Don't assume they know everything. Explain the processes, risks, and opportunities. An informed customer is a satisfied, returning customer.
- Always be ethical. Your reputation is your most valuable asset in this business. Trust takes years to build and seconds to lose.
Remember, in the real estate market, success is not measured solely in sales, but in successful transactions and long-term satisfied customers.
The moral of the story
Ignorance is not bliss, it's risk. Invest time in understanding the process, surround yourself with professionals (a good real estate lawyer is worth their weight in gold), and remember: in the Dominican Republic, a property bought or sold well is synonymous with long-term peace of mind.
So you know, before you sign on the dotted line, whether you're buying, selling, or advising, your goal should always be to conduct safe, transparent, and successful transactions.
The best investment is always in your own education and preparation.
Good luck with your next real estate transaction!
The author is: Real Estate Lawyer, specialist in tourism real estate investments, CEO and founder of Echenique Group, Secretary of the Board of Directors AEI, Certified Speaker, author and ethical reference in Real Estate.
