What you should consider when buying a property - legal aspects

When purchasing a Real Estate Property in the Dominican Republic, you should ask for professional help to avoid risks, such as: i) The existence of liens and/or encumbrances (mortgages, oppositions to transfer, etc.) registered in the Title Deed in favor of others; ii) Hidden Heirs- an heir emerges and claims an interest in the purchased property; iii) improperly executed documents that might prevent the closing of the transaction; iv) Failure in tax obligations that may preclude the transfer of property acquired on behalf of the bona fide purchaser.

Indeed, in order to minimize these risks is recommended that before the closing date the parties proceed to review and approve the documents of the transaction.

Both, the buyer and the seller must sign a purchase and sale agreement before a notary public, which shall contain the legal description of the property, as indicated on the Certificate of Title, the purchase price and the specific conditions of the transaction.

Along with the sales contract, the seller must provide to the purchaser the Original Certificate of Title (Duplicate of Owner) of the property and the corresponding evidence that the property is free of any legal matter (mortgages, litigation, etc.) that could prevent the transfer of the same to the purchaser.

Also, the seller must provide the purchaser with an original certification issued by the Tax Office Administration, known as Certification of Real Estate Property Tax (in Spanish “Certificación del Impuesto a la Propiedad Inmobiliaria“), indicating that the subject property is exempt of taxes or instead it is up to date in the payment thereof.

For the purpose of transfer of Real Estate to the buyer, the Registry of Deeds for the place where the property is located, in addition to the aforementioned documents will require a copy of the identification documents of the dominican parties (passports and/or Identification Cards). If any foreign parties, it will be requested an additional identification (Driver's License).
If you are buying a property through a company, you must provide the following documents:
• Resolution of the Board, authorizing the purchase of property and designating the person authorized by the company to sign on its behalf the documents of the transaction, duly registered by the corresponding Chamber of Commerce; and
• Copy of the current Mercantile Registry and Incorporation of National Taxpayers Registry (RNC) of the company.
The transfer tax for Real Estate Properties, in the actuality is equivalent to three percent (3%) of the purchase price of the property and must be paid by the buyer to the Tax Office Administration, before the registration of documents in the Registry of Deeds, where, after forty-five (45) days, approximately, will be issued the corresponding Certificate of Title (Duplicate of Owner) in favor of the Purchaser.

While the acquisition of Real Estate Property may seem simple, it is also true that each transaction has its peculiarities depending on the negotiation and interest of each party. In this sense, avoid using "models" of contracts, remember that a contract used for a similar transaction, not necessarily cover your interests and minimize the risks to ensure your transaction. Seek competent legal counsel, information, try to perform a secure transaction through legally and transparent processes that allow you to enjoy your investment from the first moment.

Lic. Saymi Lahoz
Punta Cana
T. 809 959 0412
slahoz@dhozconsulting.com
www.dhozconsulting.com