By Joan Feliz Valoys
Special for El Inmobiliario
In previous articles, I have discussed the complex situation faced by property owners in the Dominican Republic due to the outdated Rental and Eviction Law. Despite efforts to reform it, this legislation, in effect for over six decades, continues to grant extensive powers to tenants, leaving landlords at a disadvantage and discouraging investment in long-term rental properties.
Outdated legislation and its consequences
Law 4314, enacted in 1955, and Decree 4807 of 1959 constitute the legal framework that regulates rentals in the country. These regulations, designed in a very different socioeconomic context than today, establish eviction procedures that can last for months or even years, representing a significant burden for landlords who depend on rental income. This situation has led many to consider renting a property an act of faith, given the uncertainty and associated risks.
According to data from the Dominican Judicial Observatory, legislation regarding the rental of real estate is scattered and contains obsolete aspects that are not applicable in the current time, which generates legal uncertainty for the parties involved.
Impact on real estate investment
The perception of legal uncertainty and the lack of effective protection for landlords have had a direct impact on the real estate market. Many domestic and foreign investors are reluctant to allocate capital to properties for long-term rental, preferring other options such as short-term rentals or outright sales. This trend reduces the supply of rental housing, affecting both landlords and tenants seeking accommodation.
A study published in the journal Saber y Justicia highlights that rental housing in the Dominican market is usually of higher quality than untitled owner-occupied housing, which demonstrates the importance of promoting a balanced and attractive rental market for investors.
Reform proposals: Progress and challenges
Aware of these problems, Dominican authorities have proposed a new General Law on Real Estate Rentals and Evictions, currently under discussion in the National Congress. This initiative seeks to modernize and balance the relationship between tenants and landlords. Among its key proposals are:
Deposits and legal expenses: It is established that only two deposits may be required as a guarantee, and the legal expenses arising from the rental agreement will be shared equally between both parties.
Eviction procedures: It is proposed to expedite eviction processes for delinquent tenants, allowing the recovery of the property within a maximum period of two months.
Regulation of digital platforms: The aim is to regulate rentals through platforms such as Airbnb, promoting a balanced coexistence with the traditional tourism model.
However, despite these advances, the lack of a regulatory body to oversee and ensure compliance with the new law remains a significant concern. Without an entity responsible for monitoring and mediating disputes, there is a risk that the proposed provisions will not be implemented effectively, perpetuating current problems.
Conclusion: A debate that has yet to find a solution
The Dominican Republic's Rental and Eviction Law remains a subject of much debate. Despite reform proposals and efforts to find a more balanced legal framework, no concrete changes have yet been implemented that truly benefit landlords, who continue to be the most vulnerable in this market.
This stagnation has led many investors to shy away from the fixed-term rental market, exacerbating the shortage of available rental housing and limiting options for tenants. Progress on the new law is an important step, but without proper implementation and an effective regulator, it is difficult to foresee any real improvement in the short term.
In short, the path to meaningful reform of the Rental Law remains long and fraught with obstacles. Meanwhile, property owners continue to face an uncertain environment, and the rental real estate market continues to lose its appeal for investors.
