Free Legal Advice
Buying a property in the D.R is not complicated at all!
Please read the following guide lines to see how.
Transactions can be done in less than two weeks.
Providing title is clear and the buyer has the funds ready, a simple sales contract and valid passports will do.
Foreigners are allowed to own property in the D.R.
It is perfectly in accordance with Dominican Law for any foreigner to own land or property in their own name, even without being a resident of the country. In case you sell your property; there are no restrictions against transporting your money out of the country.
Offers, Good faiths sums, deposits and sales contracts.
Congratulations! Your offer has been accepted, what happens next? When a buyer needs to go back to their country; then it is customary to put down a good faith sum of usually us $ 1, 000 to show that you are committing to the purchase.
Next is a down payment in the amount of ten percent of the sales price. This payment is made in trust to the real estate agent.
This deposit will be placed into a bank account and this stays is in place until the vendor clears title and the final sales contract is signed. Deposits are usually paid in cash or via a bank transfer.
Once the deposit is in place, a promise of sale is drawn up which specifies a time period during which the buyer completes the payment and finalizes the sale.
The vendor commits itself to hold the property until the time period mentioned in the contract and cannot sell to anybody else in the meantime.
If the buyer does not complete the payment, the buyer will have lost the deposit paid. If the vendor cannot proceed to sell, than the deposit will be returned to the buyer.
Further payments can be made in cash or by a certified banker’s check, or bank transfer. Traveler checks or personal cheques are not always accepted as they can take 40 days for banks to clear.
Financing
Financing is possible but with extremely high interests rates and is usually not given by the vendor but by private institutions. In case you own property in your home country, it would be a better option to take out an extra home equity loan. Most pre construction sites finance for buyers. Terms vary but are usually flexible.
Due Diligence
When the deposit is made, the Real Estate company or the buyer’s lawyer will receive a copy of the title and start a title search to verify that the property does not have leins/mortgages or other restrictions and is clear to be sold. This research can take up to six weeks. Please don’t buy a property without a clear title or worse without one, unless your lawyer tells you otherwise.
Legal fees and lawyers.
If you buy through our company; than we recommend that your transaction be closed by our company lawyer: Mrs Argentina Brugal who is a qualified English translator and the former the Director of the Title office and the former Secretary of Tourism of the province of Puerto Plata. Legal fees at the moment are around US 700 for a promise of sale, a final sales contract and the issuing of a new title in the buyers name. The vendor can choose to come represented with his own lawyer but these costs should be paid by the vendor.
Transfer and property taxes.
The buyer pays the government transfer tax on the sale of the property which is at the moment approx three percent.
The vendor is responsible for having his property taxes paid up to date and to produce copy of the title, plans of the property and
a proper survey (deslinder) of the lot.
To this date, annual property taxes, only exist on very sumptuous homes (this is a one percent per year on properties worth more than Rd 5,000,000.00) but this could change in the near future. There is a minimal tax on empty lots.
As an unwritten rule most lawyers will draw up two sales contracts, one with a reduced sum for the buyer to pay a more modest tax amount, one with the correct sales amount.
The government however can send a surveyor to the property to verify if the suggested sales price is the real value of the property.
Utility bills.
The vendor is responsible for paying all the utility bills prior to closing, such as electricity, condo fees, water, cable, telephone, garbage collection. Upon closure these receipts need be presented.
Married
If a property is sold to you by a married person, Dominican law requires that both husband and wives sign the sales contract.
Condo fees.
It is important that you realize that when you purchase in a building with an association of owners, you are obliged by law to pay condo fees. This money is used to pay for building administration, community lights, maintenance of grounds and pool, security guards, necessary repairs etc. Under Dominican law, your property can be foreclosed on if you are behind on your payments, and you risk loosing the property. Every year there is an annual owners meeting where you can vote upon the most important issues.
Power of attorney
When vendors are unable to sign the transaction; they can pass a power of attorney to a trusted person or to their lawyer .The power of attorney has to be legalized and stamped by the Dominican consulate in their residing country and properly notarized. The property and title numbers on the POA need to correspond with the respective property.
When all is clear
When all the paperwork is done and the property is considered to be free and clear, you are ready to complete the purchase by paying the remainder of the sum and have the final sales contract drawn up, after which you receive the original title which is by then ready to be transferred to the name of the buyer, after having paid the transfer taxes to the Dominican Government.
-
This document is meant as a guideline and holds no guarantees for the future nor can Dominican Realty/ Multi Servicios Costambar s.a. be held responsible for any changes in laws by the Dominican Government, or private agreements between buyers and vendors.
