DOMINICAN REPUBLIC Law and Practice Contributed by: Alfredo Guzmán Saladín, Fabio Guzmán Ariza and Julio Brea Guzmán, Guzmán Ariza
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 con - tractually, otherwise it is not permitted. 6.7 Payment of VAT Rent payments to individuals, but not to compa - nies, 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 documentation, 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 build - ings and shopping 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 maintenance of common areas are covered by each tenant, 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 telecommunications are solely covered by the tenant. Expenses related to common areas of a condominium are usually covered proportionally and distributed between tenants as part of the
monthly maintenance fee. 6.11 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. 6.12 Restrictions on the Use of Real Estate The parties can agree on the uses of the rent - ed property. There is no regulation and/or law that imposes further restrictions. On occasions, municipal regulations can restrict the use of real estate property for exclusively housing purpos - es, depending on the zone in which the property is located. 6.13 Tenant’s Ability to Alter and Improve Real Estate Lease contracts usually include provisions allowing tenants to waive their rights to claim any ownership to property betterments and that they will all remain attached to the property and their ownership transferred to the landlord on termination of the lease. 6.14 Specific Regulations In general, Dominican law does not distinguish between commercial and residential properties; the same rules apply for both. However, proper - ties held by commercial entities are taxed differ - ently from those owned by individuals.
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