How to Complete a Real Estate Transaction in the Dominican Republic

Purchasing property in the Dominican Republic is a straightforward process when following the correct legal steps. Below is a comprehensive guide to ensure a smooth transaction.

1. Selecting the Right Property

Before making a purchase, it is essential to:

  • Identify the type of property (apartment, villa, land, or commercial space).
  • Consider the location and its potential for investment or personal use.
  • Conduct market research and visit properties in person or virtually.

2. Making an Offer (Offer Process)

Once a buyer has found a suitable property, the next step is to submit a formal Offer (Offre de Compra) together with the real estate agent. This offer should outline:

  • The proposed purchase price.
  • Payment terms and conditions.
  • Any contingencies or special agreements between the buyer and seller.

The offer is then sent to the seller for review. If both parties agree on the price and conditions, the offer is signed, and the buyer must deposit an initial amount (typically 10-20% of the purchase price) into the notary’s escrow account to initiate the sales process.

3. Signing the Preliminary Sale Agreement (Contrato de Promesa de Venta)

Once the offer has been accepted and the deposit made, the next step is the Preliminary Sale Agreement (Promise of Sale Contract). This legally binding document includes:

  • The full details of the transaction.
  • The property description.
  • The agreed-upon payment structure.
  • The deadline for completing the transaction.
  • Any penalties for non-compliance.

This agreement ensures that both parties are legally committed to the sale and sets the foundation for the final transfer.

4. Completing Due Diligence and Legal Checks

To protect your investment, due diligence is crucial. This includes:

  • Hiring a reputable local attorney.
  • Verifying the title deed (Certificado de Título) to confirm ownership.
  • Ensuring there are no encumbrances, outstanding taxes, or legal issues.
  • Checking the cadastral survey (Deslinde) to confirm property boundaries.

5. Payment of Fees and Taxes

The buyer is responsible for various costs, including:

  • Property Transfer Tax: 3% of the assessed property value.
  • Legal Fees: Typically around 1% of the purchase price.
  • Notary Fees: Required for signing official documents.
  • Registration Fees: Costs associated with registering the new title.

6. Signing the Final Sale Contract and Property Transfer

After all conditions are met, the Final Purchase Agreement (Contrato de Compraventa) is signed before a notary. This step includes:

  • The payment of the remaining balance by the buyer.
  • The transfer of property ownership.
  • The seller receiving the full payment for the sale.
  • The buyer obtaining all necessary documentation for the lawyer to begin the process of registering the property under the new owner’s name.

7. Receiving the New Title and Property Registration

The final step includes:

  • The buyer receiving the new property title in their name.
  • The registration of the property at the Dominican Real Estate Registry.
  • The transfer of utility services and tax obligations to the new owner.

8. Property Ownership Options

Buyers can choose to acquire real estate as:

  • An individual (personal name ownership).
  • A legal entity (corporation or company), which can have tax benefits and legal advantages.

Final Considerations

  • Foreign buyers do not need residency to own property.
  • Working with licensed professionals (real estate agents, lawyers, and notaries) ensures compliance with local laws.
  • Understanding the three main stages (Offer, Preliminary Contract, and Final Sale Contract) helps streamline the purchase process and secure a successful transaction.

By following these steps, buyers can confidently navigate the property acquisition process while protecting their investment.