Buying the Loan, Not the Property: Registering an Assignment of Credit in the Dominican Republic

There is a second market beneath the Dominican property market: the market for the debts secured by it. Banks sell loan portfolios, investors buy distressed credits at a discount, private lenders exit positions, and estates liquidate the mortgage credits a deceased lender left behind. In every one of those transactions, what changes hands is not a property but a credit, together with the mortgage or privilege that makes it worth buying.

The law of the operation has two layers, and the second is the one purchasers neglect. Between the parties, the assignment is a contract governed by the Civil Code, with its own requirements for binding the debtor. But the security, the inscribed mortgage that gives the credit its teeth, lives at the Title Registry, and for the assignee to hold it opposably against third parties, the assignment must be registered there. An assignee who pays for a secured credit and skips the registration owns, in the eyes of the registry, nothing visible: the inscription still names the assignor, and everyone from the debtor’s other creditors to a subsequent purchaser of the same credit can act accordingly.

The registration procedure fixes the mismatch: the assignment is filed, the Registrar annotates the change of creditor, and the security formally follows the credit to its new owner, who can then enforce, discharge or re-assign it in their own name.

Portfolio buyers should scale the lesson: a hundred credits means a hundred inscriptions to update, and the discount that made the portfolio attractive often reflects exactly this kind of pending homework.

The framework is the Civil Code’s assignment rules together with Law 108-05. Arthur & Castillo handles secured-credit assignments end to end, due diligence on the underlying inscriptions, debtor notification, and registration of the assignee’s position. If you are buying Dominican debt, make sure you are also buying its security.

Do you want more information about our services for Registering an Assignment of Credit in the Dominican Republic? Contact Us.

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

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