DOMINICAN REPUBLIC Law and Practice Contributed by: Alfredo Guzmán Saladín, Fabio Guzmán Ariza and Julio Brea Guzmán, Guzmán Ariza
2.4 Real Estate Due Diligence The typical real estate due diligence overseen by the buyer’s attorney regarding title consists of the following: • 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 Rev - enue 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 occupy - ing the property; • investigating the property’s environmental status; and • ensuring that the seller, especially if a cor - poration, has the authority to sell and can convey clear title. Under the Torrens system (used for land registra - tion 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 fre - quently for various reasons – especially limited protection and costs – even though the indem - nity 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 registration, provided that the application is approved, not on the date the Reg - istry of Title issues the corresponding certificate.
required for conveyances, unless agreed other - wise by the parties. 2.3 Effecting Lawful and Proper Transfer of Title The legal requirements for recording convey - ances are the following: • deed of sale (sales contract), authenticated by a Dominican notary; • certificate of title, issued to the owner by the Registry of Title – a completely different docu - ment from the deed of sale, which serves as the only proof of ownership; • certification showing that the seller is up to date with its property taxes; • a receipt attesting to the payment of the real estate transfer taxes (currently 3% of the government-appraised value of the property) – the buyer is exempt from this tax in some cases (eg, first purchases in certain tourism projects and low-cost housing acquired with a bank loan); • a copy of the identity card or passport of the parties, or tax card if a legal entity – non-resi - dent foreigners need to provide an additional identity card from their country of origin in addition to their passports; and • a copy of evidence of the purchase price or mortgage payment through a non-cash method, for operations involving more than DOP1 million (about USD18,352). Registration rules are established by the General Director of the Registries of Title and are applica - ble nationwide. The Dominican Civil Code states that buyers pay all the fees, expenses and taxes required for conveyances, unless agreed other - wise by the parties.
229 CHAMBERS.COM
Powered by FlippingBook