DOMINICAN REPUBLIC Law and Practice Contributed by: Fabio Guzmán Ariza, Julio Brea Guzmán, Alfredo Guzmán Saladín and César Calderón, Guzmán Ariza
tive procedure. Also, evictions cannot occur unless a judicial eviction process is undertaken, regardless of what has been contractually agreed. Key lease provisions include: • a lease term; • tacit renewal clauses; • ownership of betterments (improvements) made by the tenant during the lease; • default clauses and waiver of certain tenant- friendly statutory provisions that are not a matter of public order; • a clear distinction between minor and major repairs and which party will be responsible for covering these; and • specific use of the property during the lease term (type of business or family residency). 6.4 Typical Terms of a Lease There is no typical lease term or restrictions on such a term. Tenants of business premises do not have secu - rity of occupation or rights to renew the lease. The law clearly assigns minor maintenance repairs to tenants, while major structural repairs are covered by landlords; all of which can be modified contractu - ally between the parties. The rent is commonly paid monthly; however, the parties are free to agree oth - erwise. 6.5 Rent Variation Leases commonly provide for periodic rent increases. 6.6 Determination of New Rent There is no legal rent level protection. Rent can be increased as long as it has been agreed contractually, otherwise it is not permitted. 6.7 Payment of VAT Rent payments to individuals, but not to companies, are subject to a 10% withholding at source. All rents are subject to 18% VAT. 6.8 Costs Payable by a Tenant at the Start of a Lease At the start of the lease agreement, the tenant pays a security deposit, usually equivalent to two months’
rent, to guarantee the fulfilment of its obligations. This amount is to be returned by the landlord once the property is received at the end or termination of the lease. The landlord has the obligation to deposit this money, with a copy of the lease agreement and other docu - mentation, at the Agricultural Bank. Legal fees and other applicable fees are usually paid by each party. 6.9 Payment of Maintenance and Repair The expenses of maintenance and repairs of common areas, especially in commercial buildings and shop - ping centres, are paid by each of the tenants and are usually established as part of the agreed rent. For residential spaces, the costs arising from main - tenance of common areas are covered by each ten - ant, by payment of a maintenance fee, usually on a monthly basis, either to the building administrator or to the landlord, if agreed as part of the rent. 6.10 Payment of Utilities and Telecommunications Utilities such as electricity, cable TV, water and tel - ecommunications are solely covered by the tenant. Expenses related to common areas of a condomini - um are usually covered proportionally and distributed between tenants as part of the monthly maintenance fee. 6.11 Payment of Property Taxes Landlords are responsible for the payment of their real estate taxes. The same applies for homeowners asso - ciation’s fees, as applicable. 6.12 Insurance Issues There is no legal obligation to obtain insurance for real estate subject to lease; this will depend on the terms and conditions agreed between the parties. Rental insurance is not commonly used. 6.13 Restrictions on the Use of Real Estate The parties can agree on the uses of the rented prop - erty. There is no regulation and/or law that imposes further restrictions. On occasions, municipal regula - tions can restrict the use of real estate property for
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