DOMINICAN REPUBLIC Law and Practice Contributed by: Fabio Guzmán Ariza, Julio Brea Guzmán, Alfredo Guzmán Saladín and César Calderón, Guzmán Ariza
nationwide. The Dominican Civil Code states that buy - ers pay all the fees, expenses and taxes required for conveyances, unless agreed otherwise by the parties. 2.4 Real Estate Due Diligence The typical real estate due diligence overseen by the buyer’s attorney regarding title consists of the follow - ing: • obtaining a certification from the Registry of Title stating the legal status of the property; • obtaining a certified report from an independ - ent surveyor confirming that the official survey coincides with the property and that there are no overlapping surveys; • obtaining a certificate from the Internal Revenue stating that the property tax, if any, has been paid; • confirming that the property to be purchased may be used for the purposes sought by the buyer; • investigating whether a third party is occupying the property; • investigating the property’s environmental status; and • ensuring that the seller, especially if a corporation, has the authority to sell and can convey clear title. Under the Torrens system (used for land registration as noted in 1.1 Main Sources of Law ), there is no need to conduct a chain-of-title search. Title insurance is available but is not used frequently for various rea - sons – especially limited protection and costs – even though the indemnity fund set forth by the Real Estate Registration Law does not function properly. The Real Estate Registration Law establishes that whoever registers first has priority over those who register after. Registration is deemed to be complete on the date the application is submitted for registra - tion, provided that the application is approved, not on the date the Registry of Title issues the corresponding certificate. Priority among different interested parties can be contractually reordered. 2.5 Typical Representations and Warranties The Dominican Civil Code establishes that the seller has two main obligations: (i) the delivery of the thing that is the object of the sale; and (ii) guaranteeing the object of the sale.
The first obligation is fairly straightforward, as the seller fulfils its obligation with the delivery of the keys or the delivery of the title that protects the ownership of the real estate property. As for guaranteeing the object of the sale, this involves (i) the peaceful possession of the object, and (ii) ensur - ing the absence if redhibitory (ie, hidden) defects. Although there are several statutes of limitation pre - scribed by law, the parties are also free to determine the period of enforceability of these obligations. The typical cap is between 60 and 90 days, which gives the buyer enough time to carry out the cor - responding procedures to transfer ownership of the property into their name. The sale contract must state the agreed period and the release in favour of the sell - er upon its expiration. Warranties typically specify that: • the property is registered to the seller and is of the dimensions mentioned in the title; • there are no overlapping parcels; • there are no liens, mortgages or third-party regis - tered rights; • the conveyance will not be affected by any tax liabilities; • the seller will have to provide any documentation and sign any additional sets of documents required for the final conveyance of the title to take place; and • all liabilities, including utility bills and contractors’ fees, will be paid up to the date of closing. The warranties are provided both in relation to the property and to the shares of the holding entity being purchased, if that is the case. 2.6 Important Areas of Law for Investors Any investor who wishes to participate in the real estate market of the Dominican Republic should con - sider the impact on their investments of tax law, real estate law, environmental legislation and administra - tive law for licences, planning and the registration of the title of ownership before making a purchase.
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