DOMINICAN REPUBLIC Law and Practice Contributed by: Alfredo Guzmán Saladín, Fabio Guzmán Ariza and Julio Brea Guzmán, Guzmán Ariza
• certification attesting to the payment of prop - erty taxes. Mortgages and underlying credits can be trans - ferred without paying additional taxes. 3.4 Taxes or Fees Relating to the Granting and Enforcement of Security The Civil Code states that buyers pay all the fees, expenses and taxes required for convey - ances unless agreed otherwise by the parties. Each party covers their own attorney’s fees. 3.5 Legal Requirements Before an Entity Can Give Valid Security There are no mandatory legal rules or require - ments that must be complied with before an entity can give valid security over its real estate assets, except for those imposed on financial entities by the Financial and Monetary Code. 3.6 Formalities When a Borrower Is in Default The formalities that need to be complied with before enforcing security over real estate depend on the approach to be taken. In the case of the execution of a credit through a foreclosure based on an automatically enforce - able document such as a promissory note, the process takes approximately 18 months if there are no delays. However, in the case of an execution based on the breach of a contract, the process can take much longer. This is because, under the Dominican legal system, a judgment rendered by a court of first instance may be appealed to a Court of Appeals and the decision of the Court of Appeals may be further appealed to the Supreme Court. A suit going to the three jurisdictions may
take five years or longer to be resolved, depend - ing on the complexity of the matter. The remedies against a debtor in default are enforced through a specific judicial procedure at the first-instance court. It is a three-step pro - cedure, usually based on monetary default: • the creditor notifies a specific notice of pay - ment to the debtor; • if the notice expires without payment being fulfilled by the debtor, the creditor files an embargo at the Registry of Title to completely block any further registrations on the prop - erty; and • the creditor initiates the court procedure for the foreclosure, which ends in a public auc - tion sale of the foreclosed property. All the rules regarding the foreclosure are of pub - lic order. Foreclosure can only be judicial; non- judicial foreclosure is prohibited by law. Defaults other than monetary defaults are possible (unau - thorised distribution of dividends, unauthorised changes in the corporate structure, etc) if prop - erly established in the loan documents or mort - gage act and proved by the creditor. The usual time taken for an ordinary foreclosure is around six to 12 months. Financial institutions benefit from an expedited procedure that takes around three to six months. In any case, dila - tory procedures can be initiated by the debtor or by any other party with a registered right on the property. Law 189-11 introduced trusts and collateral agent structures for mortgage securities as an alternative to standard mortgage-foreclosure processes, providing better protection of col - lateral and including an expedited foreclosure
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