In the last two decades, the real estate scene in the Dominican Republic has seen great advance in terms of legal security and protection of rights, which has prompted the development of thousands of new constructions of all kinds, both in the cities and touristic areas of the country. The strengthening of the real estate legal system has attracted many local and international investors that have experienced peace of mind with their investment, and also have enjoyed high ROI over the years, especially those that purchased properties in touristic locations, given the high number of travelers that look to rent properties in these areas during their vacation time in the country.

 

Part of what makes this legal system robust is what we know as Real Estate Due Diligence. This is a necessary legal process prior to buying a real estate property in any location in the Dominican Republic. The objective of this procedure is to ensure that every detail in the transaction related to the property and the owners is totally transparent and the buyer is able to make a fully informed decision.

The legal base for this procedure is the LAW 108-05 ON REAL ESTATE REGISTRATION, created to provide a solid jurisdictional framework that fully protects the users of the system in any transaction involving real estate assets in Dominican soil.  

The buyer, with the help of their real estate agent, should start this process in order to verify several key aspects of the property, be it in a pre-construction project or an existing and/or resale unit.

Below is a breakdown of the three main - but not limited to- points of the process of due diligence that need to be verified with the help of a local real estate agent, in order to buy real estate in Dominican Republic safely.

1- Verification of authenticity of the title of the property.

Mainly, this process will help validate the legitimacy of the title of property by confirming that the information shown in it matches that of the records in the Title Registry. This part of the process also confirms that the property description contained in the title matches what is shown in the property itself, including that the boundaries of the property are exactly as described in the document. It also confirms whether the name of the person and/or company selling the property is the one that actually owns it and they have the right of ownership of the property.

 

 

2- Verification of legal status of the property.

  Along with the one before, this point verifies the legal status of the property in terms of pending taxes, mortgages, dues or liens that the property may have, all of which should be discussed prior to the purchase. In cases of pre-construction projects, this verification must certify that the land where the project is being developed has already been fully transferred to the developer. There have been cases where a company starts to develop a project before this process is finished, trusting that it will be completed later. The problem with this practice is, among other things, that the buyer will not have a title issued for the unit they bought until this process is completed. This is where the buyer may run with a higher risk of jeopardizing their investment.

 

3- Verification of due norms and permits (pre-construction projects)

One of the best ways to invest in real estate in Dominican Republic is buying in the pre-construction phase, mainly because your property will have gained value by the time it is finished, and also because the developers usually allow you to pay in installments over a certain period of time during the construction of the project, without interest. In order to safely buy in a pre-construction project, you need to verify that the developer already has all the permits necessary to start the construction. Buying in a pre-construction project that doesn’t have all the necessary permits at hand may jeopardize the investment, should the development come to a halt if one of these permits missing.

 

As we mentioned in the beginning of this article, today there is a solid legal system in the Dominican Republic that protects every real estate investor looking to enjoy living near our warm beaches or our beautiful mountains, or simply wants to strategically allocate resources in real estate to generate high Return On Investment. It’s just a matter of doing the due diligence, following the proper steps, finding responsible real estate agents that help achieve this goal, and the sky is the limit when it comes to real estate investments in Dominican Republic.