Purchasing pre construction real estate property in the Dominican Republic may be one of the most challenging processes, at times complex, while full of both opportunities and potential risks for buyers.

Real estate developers, promoters and sales agents will provide plenty of marketing plethora and promotional materials into what might be the investment of a lifetime, followed by a rapid succession of events requiring confirmation of availability and pricing of a desired Dominican real estate property unit and reserving the unit by way of signing a reservation and a reservation fee of a few thousands.

Aggressive sales tactics by sales agents to secure said reservation fee payment can throw prospective purchasers of Dominican real estate property off balance and place them at a risk and disadvantage of not knowing everything they should know about a property’s legal status and seller’s contractual terms and conditions.

Not retaining a lawyer to review the transaction, and cases like the one discovered in 2024 where a fake developer was offering Dominican investors from New York properties it did not construct or that were sold to multiple purchasers, is one of the reasons why the New York Attorney General issued an alert recommending prospective purchasers to always retain qualified legal counsel.

Some promoter companies and their sales agents can go as far as recommending to a prospective buyer that everyone must use their lawyer, that buyer will be hiring and paying for developer’s lawyer and that it is not permitted for the buyer to retain its own lawyer for the due diligence and contract review phases.

Your Dominican Counsel®

The advantages of retaining a legal professional with the skill and experience necessary to dissect a DR pre-construction real estate purchase transaction from an early stage are enormous when compared to a late arriving purchaser that already signed real estate purchase commitment documents, case in which the DR real estate purchase transaction examination is similar to a forensic investigation.

The discoveries of a due diligence process over Dominican pre construction real estate property will also provide good information to a prospective real estate property purchaser on the situation of the title, ownership, litigations, annotations, improvements, liens and mortgages, which can serve as an item of pre-negotiation and identification of risks to be considered in the pre-construction purchase agreement.

Prospective investors with a clear business or investment mindset of what they are looking for and the risks involved, reach out to independent DR Real Estate experts like us to inquire and ask for legal representation. These are the cases where purchasers are able to obtain the best overall assistance.

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ABOUT THE AUTHOR: Dr. Felipe Isa Castillo is a Partner, Head of International Business, Foreign Investment & Real Estate at ACLAW, a law Firm in the Dominican Republic. He specializes in international business, foreign investment and real estate law (International Legal Studies LLM in Georgetown University Law Center & Masters in International Business in Universidad Pompeu Fabra in Spain) with more than 20 years of experience in International Business and Trade, Foreign Investment, Free Trade Zones and Cross Border Real Estate practice. Dr. Felipe Castillo is also a Certified Bankruptcy Conciliator and Liquidator and Legal Interpreter.

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Copyright 2024 Arthur & Castillo | Dominican Law

Disclaimer: This publication is not intended to provide legal advice or suggest a guaranteed outcome as individual situations will differ and the law may have changed since publication. For specific technical or legal advice on the information provided and related topics, please contact the author.