DOMINICAN REPUBLIC Law and Practice Contributed by: Marielle Garrigó, Urania Paulino, Eduardo Pellerano and Ricardo Pellerano Nadal, Pellerano Nadal Law & Consulting
Movable Assets With the entry into force in 2023 of Law No 45-20 on Movable Collateral, chattel pledge agree- ments are now registered before the Movable Collateral Electronic System ( Sistema Electróni - co de Garantías Mobiliarias ) managed by the Ministry of Industry, Commerce and SMEs. In cases where material contracts or shares have been pledged, notification via a bailiff’s act to all parties is required for the former and notification to the corresponding Chamber of Commerce is required for the latter. Real Estate Mortgages For the registration of mortgages, the debtor or the guarantor must be the owner of the prop- erty. For properties to be registered before the corresponding deed records, a contract whose signatures have been legalised by a notary pub- lic is sufficient. The parties need to be identified, the property, a description of the secured obliga- tion, the amount to be secured by the collateral and other general data must also be included. Any mortgage over a real estate property that is held by a married person needs to be executed by the couple. For both types of securities, the agreements As of 2023, the registration of movable assets must be registered before the Movable Collat- eral Electronic System ( Sistema Electrónico de Garantías Mobiliarias ) managed by the Ministry of Industry, Commerce and SMEs. See 5.2 Form Requirements for the information required in the contracts for registration. must be drafted in Spanish. 5.3 Registration Process
• mortgages over any properties held to secure the financing; and • the sponsor’s agreement. Real estate mortgages over properties are the preferred securities for local and international lenders as, once registered before the corre- sponding deed registries, they have obtained a priority ranked security that has been perfected. Real estate mortgages are governed by the gen- eral provisions set forth in the Dominican Civil Code and by the Real Property Registration Law No 108–05 of 2005. Moreover, it is common practice that internation- al lenders engage local banks to act as collateral agents to guarantee and enforce their rights in the event of default. 5.2 Form Requirements As indicated in 5.1 Types of Security Commonly Used , securities in transactions of this nature vary by transactions. In terms of form, each one, depending on the type of security, must meet certain requirements for its registration, propri- ety, perfection and subsequent execution. In view of these requirements, both the chattel pledges and mortgage contracts over real estate require certain minimum information to be regis- tered. Some of the requirements to constitute a non-possessory chattel pledge are: • the identification of the parties; • the consent between the parties; • the identification of the good or goods given as collateral; • the value of the good or goods given as col- lateral; • the amount of credit and interest to be received based on the credit; and • the loan maturity date.
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