The Real Estate Transaction Process in the Dominican Republic:
Selecting a property: The process begins by identifying and choosing a property that meets the buyer’s preferences and needs. A trusted real estate agent can assist with this process by providing information about different properties and neighborhoods, as well as providing guidance on the local real estate market conditions.
Offer for Purchase Agreement: Once a property is chosen, the next step is to have the real estate agent draft an Offer for Purchase Agreement to present to the seller. This document outlines the terms and conditions of the sale, including the purchase price, payment terms, and any contingencies. It is a legally binding document and should be reviewed by a lawyer or notary public prior to submission.
Due Diligence: Depending on the parties, due diligence may begin prior to Offer for Purchase Agreement or after the Offer to Purchase Agreement and prior to deposit. The lawyer (solicitor) may proceed with the due diligence conditioning the purchase to the results of the due diligence to be done in a specified term. The Offer for Purchase Agreement may be adjusted depending on the findings of the due diligence.
Promise of Sale: If the seller agrees to the terms outlined in the Offer for Purchase Agreement, a binding Promise of Sale is prepared by a lawyer or notary public, who is required to have a law degree in the Dominican Republic. The Promise of Sale is a legally binding document that outlines the details of the transaction, including the full names and personal information of the parties, the legal description of the property, the purchase price and payment terms, a default clause, the date of delivery, any due diligence performed, and any representations made by the seller. It should be signed by both parties in the presence of a notary public.
Deed of Sale (“Contrato de Venta”): If the purchase is being made in cash, it may be more efficient to go straight from verbal negotiations to the signing of a Deed of Sale, instead of taking the preliminary step of signing a Promise of Sale. The Deed of Sale is also a formal document binding on both parties, and signed by them in the presence of a Notary Public, and is used to convey the property from the seller to the buyer.
Determination and Payment of Transfer and Registry Taxes: The authenticated Deed of Sale is taken to the nearest Internal Revenue Office where a request is made for the appraisal of the property. The Internal Revenue Office checks if the seller is in compliance with his tax obligations and selects an inspector to do the appraisal. The determination of the amount of taxes to be paid may take a few days or weeks, depending on the availability of the property inspector.
Filing at the Registry of Title: Once the property has been appraised and taxes paid, the Deed of Sale and the Certificate of Title of the seller are deposited, along with the documentation provided by Internal Revenue, at the Title Registry Office for the jurisdiction where the property is located.
Certificate of Title: At the Title Registry Office, the sale is recorded and a new Certificate of Title is issued in the name of the buyer. The property officially belongs to the buyer from the time the sale is recorded in the registry.
Throughout the entire process, it is important to work with a trusted real estate professional and a competent real estate lawyer.