Buy in Dominican Republic

The real estate operations in the Dominican Republic are prevailed, regulated and protected by the Law No 108-05 of Real estate Registry. Effective from the 4 of April of 2007, and its Regulations of Application. The property of a building is acquired by means of the inscription in the Registry of corresponding Titles of an act of transaction, legalized before Notary, who fulfills the legal requirements. Once registered the act, the Recorder of Titles will issue to name of the buyer a Certificate of Title that its right of property verifies on the building.

Preliminary aspects to make a safe real estate purchase:

As much in Dominican Republic as in any country of the world. He is recommendable before making the purchase of real estate, that the buyer asks for the services of a serious Real estate agency, professional and responsible. That it guards and it guarantees, faithfully his interests. The real estate agency will be in charge to make the legal diligences and verifications pertinent and necessary to assure the rights its client, before and after the company/signature of Transaction.

The Promise of Transaction:

Most of the real estate operations in the Dominican Republic a Sale Promise of or Option of Purchase begin with the subscription of, in whose virtue the buying one gives a deposit, advances or reserves to the salesman. And the salesman commits itself to sell his property to the buyer, under the terms contemplated in the Promise or Option. The contract is subscribed by the parts in the presence of a Notary, who legalizes the companies. The Promise or Option must contain a detailed description of all the excellent aspects of the negotiation, such as the description of the property, the sale price, the mode of payment, the guarantees, the causes of resolution, etc. Then its function is to regulate the transaction from its beginnings until the payment of the price is completed and the Contract of Transaction subscribes that will serve to transfer the property to the buyer. A Promise of written up affluent Transaction will have to contain the following information and minimum mentions:

a) Complete and general names of the parts. If the salesman is married, the company/signature of its spouse will be required.

b) Cadastral description of the immovable object of the sale.

c) Sale price and mode of payment.

d) Resolving clause in case of payment breach, if it has been agreed.

e) Date of delivery of the building.

f) List of the legal verifications that must be carried out respect to the state of the building and agreement of the payments to the positive result of these verifications.

g) Obligation of the salesman to sign the Contract of Transaction when receiving the totality of the payment of sale price.

The Contract of Transaction:

Like the Promise or Option, the Contract of Transaction subscribes before a Notary who legalizes the companies of the parts. It has by purpose the crossing of the right of property of the salesman to the buyer and is equivalent to the used public writing in Spain and Europe. Quite often it is recommendable fiscally, to make the purchase to name of a Dominican society instead of in a personal view.

Determination and payment of the taxes of transference and registry:

The Contract of Transaction must be deposited in the Local Administration of the Main directorate of Internal Taxes, to ask for the appraisal of the bought building. The Local Administration of the Main directorate of Internal Taxes verifies if the salesman is up-to-date in the fulfillment of his fiscal obligations, and comisiona to an inspector so that he appraises the building and he determines the amount of the taxes to pay. This procedure can delay several days or weeks mainly, depending on the work accumulation of the assigned inspector to make the appraisal or of the distance between the location of the offices of the Local Administration and the place where is the building.

Inscription of the transaction in the Registry of Titles:

Obtained the appraisal of the property and paid the taxes of transference, the Contract of Transaction and the Certificate of Title of the sold property they will be due to deposit, jointly with the documentation provided by the Local Administration of the Main directorate of Internal Taxes, in the Registry of Titles corresponding to the jurisdiction where is the bought building. In the practice, the inscription subject to is varied formalisms than they demand that in most of the cases the Real estate agency it must be personar in the Registry of Titles to hasten the same one, which represents a difference marked with other countries like Spain, where the inscription of the public writing can personally be made still by mail or fax, sending soon the original one by mail or, in any Registry of Property of the country.

Expedition of the Certificate of Title:

Once registered the transaction in the corresponding Registry of Titles, a new Certificate of Title to name of the buyer is sent and the Certificate emitted to the salesman is cancelled previously . It is important to emphasize that the right of property of the buyer exists from the precise moment in that the transaction registers. The expedition of the new Certificate of Title can take from days to several months, depending on the office of in question Registry of Titles. Or the capacity of management and streamlining of the real estate agency.

Necessary verifications

In order to initiate the necessary verifications, the salesman must provide to the buyer or his legal adviser, the following documents:

Photocopy of the Certificate of Title of the building.
Photocopy of the mensura or the plane of the building. By virtue of the new Law of Real estate Registry, sales of buildings that have not been defined, that is to say, that they do not have a unique cadastral designation and a plane of individual mensura properly approved, they could not be registered in the Registry of Titles, safe in the following cases: (1) Transactions conducted before the 4 of April of 2007, which could be registered during a period of grace of two years that finish the 4 of April of 2009; and (2) Transactions of complete properties without defining, do not allow sales of portions of these properties by an only time. Second crossings are not allowed without definings.

Photocopy of the Identity card of the salesman or his Passport and the one of its spouse if it is married.
Photocopy of the receipt of the Direction General of Impuestos Internos (DGII) in which the last payment consists of tax on the property (the IPI) or photocopy of the exemption certificate of the payment of this tax, like it copies of the certification of the DGII in which he consists that the salesman is to the day in his obligations public prosecutors.

If the salesman is a society:

Photocopy of the file constituent of the society, the Title deed of the society in the Mercantile Registry, to the day, and of the act that the sale authorizes.

Certification sent by the DGII, in which it consists that the company is up-to-date with the payment of its taxes.

If the building is part of a condominium:

Photocopy of the declaration of condominium.

Photocopy of the regulation of condominium.

Photocopy of the planes of construction, properly approved by the corresponding authorities.

Certification of the condominium pointing out that the salesman is up-to-date with the payment of the quotas of maintenance.

Photocopy of the three last ones assemblies celebrated by the condominium.

If the building is an individual house:

Photocopy of the planes of construction, properly approved by the corresponding authorities.

Inventory of the effects existing furniture.

Copies of last receipts of provisions: water, light, telephone, etc.

After obtained the documentation before indicated, the work of DominicanCasa Realty, consists of verifying that the building that appears in the Certificate of Title is frees of all right of third and of which it is exactly the building that wishes to buy its client.

To those aims, we will take the following steps:

Investigation in the Registry of Titles: DominicanCasa Realty asked for a certification of the Registry of Title in which the legal state of the property consists.

Verification by a surveyor: Our surveyor (expert topographer) verified that the building to buy he is he himself who appears in the plane presented/displayed by the salesman, unless one is verified urbanizations previously. Cases have occurred in that, for reasons of errors in the mensura or by fraudulent maneuvers of salesman, the property presented/displayed to the buyer is not the same one that consists in the Certificate of Title. He is advisable to make the verification of plane even though is defined or subdivided lands with cadastral approval of the Main directorate of Mensuras.

Permissions: DominicanCasa Realty it confirmed that the property purchase object will be able to be used to the aims wished. Although the city-planning ordering in the Dominican Republic is very deficient, many legal restrictions exist that must be taken in account before carrying out the purchase. For example, Law 305 of the 1968 it establishes a marine zone of 60 meters, from the high water, along of all the coast of the country, that in effect makes happen to the public dominion all the Dominican beaches. Constructions are not allowed within marine zone without a special authorization of the Executive authority. In addition, in the tourist zones there are administered restrictions of construction by the Secretariat of State of Tourism.

Possession: DominicanCasa Realty it verifies by you, that the salesman is in possession of building a to buy and that does not exist occupants or improvements pertaining to third. We will take special well-taken care of in the case of properties that are not surrounded and that is outside well-known urbanizations. to exist renters, renters or colonos in the building, we will communicate it of immediate to the buyer. Since the Dominican law sobreprotects to these people and who consequently, to evacuate them could turn out to be a task arduous and expensive.

Employees: The salesman will have to pay the labor benefits corresponding to the related employees with the operation of the property purchase object.

Services: Also, we will verify that the salesman does not have pending debts by concept of services of water, light, telephone or other services.

Expenses and honoraria to transfer the property:

The expenses for the crossing of the property of the salesman to the buyer ascend approximately to the 3,1% of the value of market of the building, detachhed of the following way:

3% by concept of the tax on real estate transferences (Law #288-04).

0,1% slight expenses by concept of diverse seals, such as certification of check or heel, seals officials, etc.

It is possible to stand out that the taxes calculate on the value of market of the transferred building (Article 20 of the Law #288-04), by means of appraisal conducted by the governmental authorities, and not on the price stipulated in the Contract of Transaction like in many countries.

As far as the professional honoraria of the Notaries in Rep. Dominican, the standard tariff is of 1% of the price of the purchase, which includes the writing of the Promise of Sale and the Contract of Transaction, as well as its legalization.

Taxes on the property:

The buildings titled to personal name that have a value superior to the five million weights (100.000€) Are subject to the annual payment of 1% of on any excess on that sum, by concept of the Tax on the Real estate Property (the IPI), except for the following exceptions:

Rural properties.

Buildings whose proprietors have 65 or more years of age, when these have been owners of those buildings by more than 15 years and they do not have any other property to his name.

Purchase of buildings by foreigners:

Some to the purchase from foreigners of buildings does not exist at the present time restriction in the Dominican Republic. Previously, the Decree No 2543 of 1945 and their modifications demanded of the foreigner to obtain the previous authorization of the Executive authority except for counted exceptions. This norm was countermanded by means of the Decree No 21-98 of the 8 of January of 1998 that it established like only requirement that the Registry of Title maintains a record, for statistical aims, of all the done sales to foreigners.

The buildings and the successory right:

The foreigners can freely inherit real estate in the Dominican Republic. Nevertheless, if they are not resident in the Dominican Republic, the successory taxes that must pay see increased in a 50% one hundred over which a resident would pay. In addition, the succession of been real estate in the Dominican Republic is subject to the Dominican law, which establishes an obligatory hereditary reserve in benefit of the children of the passed away person. For example, a foreigner with a son must reserve to his heir the fifty percent to him of his real estate patrimony in Dominican Republic without mattering that the law of its nationality or its testament establishes the opposite.