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Before
purchasing property, it is highly advised that
buyers retain a real estate attorney to do the
due diligence. Although possible, it would be
too risky for the buyer to do it on his own. To
start the due diligence, the seller should
provide the buyer's attorney with the following
documents:
1.
Copy of the Certificate of Title to the
property.
2. Copy of the survey to the
property of plot plan.
3. Copy of his identification
card ("Cedula") or Passport.
4. Copy of the receipt showing
the last property tax payment (IVSS) or
copy of
the certificate stating the property is exempted from the
IVSS tax.
5. If the seller is a
corporation: a. Copy of the corporate
documentation,
including bylaws and resolution authorizing the sale. b.
Certification from the
Internal Revenue Office showing the corporation is current
with its income tax
filings.
6. If the property is part of a
condominium: a. Copy of the condominium
declaration. b. Copy of the condominium regulations. c. Copy
of the approval
construction plans. d. Certification from the condominium
showing the seller is
current with his condo dues. e. Copies of the minutes of the
last three
condominium meetings.
7. If the property is a house: a.
Copy of the approved construction plans.
b.
Inventory of furniture, etc. c. Copies of the utilities
contracts and receipts
showing the seller his current with his payments.
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Once the documentation listed above is obtained,
the attorney should every item on the following
checklist before the closing:
1.
Title Search: A certification should be
obtained from the Title Registry Office
regarding the status of the property, whether any liens or
encumbrances
affect it. The buyer should insist that his attorney confirm
the results of the
Registrar's search personally by investigating himself the
appropriate files at
the Title registry (see Buying Property in the Dominican
Republic: Title
Searches).
2. Survey: An independent
surveyor should always verify that the
property to be
sold coincides with the one shown on the survey presented by
the seller
unless the property is located in a previously verified
subdivision. Cases have
occurred in which a buyer acquires title over a property some
distance away
from the one he believes to be buying due to careless work by
a previous
surveyor or to fraud by the seller. The survey should be
checked even when
the seller provides a government-approved survey.
3. Inspection of Improvements: A
qualified builder or architect should
examine
any improvements to be sold (house, condo) to confirm that
the plans
presented are correct and that the improvements are in good
condition.
4. Permits: The buyer's attorney
should confirm that the property to be
purchased may be used for the purposes sought by the buyer.
Although in
the Dominican Republic there is no zoning law as such, many
existing legal
restrictions should be taken into account before purchasing.
For example, Law
305 of 1968 establishes a 60-meter "maritime zone" along the
whole
Dominican coastline, measured from the high tide mark inland,
which in effect
converts all beaches into public property. No building is
allowed within the
maritime zone without a special permit from the Executive.
Also, in tourist
zones, there are building restrictions administered by
DEFINPRO, a department
of the Central Bank.
5. Possession: The attorney
should verify that the seller is in
possession of the
property. It should be ensured that no squatter's rights of
any kind exist.
Special precautions should be taken with unfenced properties
outside known
subdivisions. Fencing them before closing is advisable. If
there are tenants on
the property, the buyer should be informed that Dominican law
is protective
of a tenant's rights and that evicting a recalcitrant tenant
is time-consuming
and expensive.
6. Employees: The seller should
pay any employees working on the
property their
legal severance up to the time of the closing, otherwise the
buyer may find
himself liable for the payment later.
Many attorneys
in the Dominican Republic do not perform the
required due diligence on real estate
transactions. Usually, the entire due diligence
is limited to obtaining a certification from the
Title Registry Office. Sometimes, the real
estate agent and the seller pressure the buyer
into a hurried closing despite the advice of his
legal counsel.
PREVIOUS|NEXT
Purchasing Real
Estate
Introduction
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Due Diligence
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Taxes & Expenses
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Title Insurance
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Purchase by Foreigners
Inheritance by Foreigners
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Legal Disclaimer|
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