1.1 Main Sources of Law
For the first 100 years or so from becoming independent in 1844, the Dominican Republic had a legal system based on French law, specifically on the Napoleonic Codes – civil, civil procedure, commercial, criminal and criminal procedure – under a constitution based on the US model, with three branches of government: a strong presidency, a legislature and a judiciary with the power to strike down acts of the other branches found to be unconstitutional.
Since the first half of the 20th century, however, there has been a move away from the French model, with the adoption of many statutes and codes inspired by other legal systems. Examples include:
- the Land Registry Law of 1920, founded on the Torrens system of Australian origin;
- the Labour Code of the 1950s and 1992, modelled on South American codes;
- the new Code of Criminal Procedure of 2002, based on the same adversarial principles that govern US criminal litigation;
- the new arbitration statute of 2008, taken from the model arbitration code prepared by the United Nations; and
- the new bankruptcy and insolvency statute of 2015, influenced greatly by US bankruptcy law.
The Constitution of the Dominican Republic lays out the fundamental framework for the organisation and the operation of the Dominican government and its institutions, and recognises an impressive list of civil rights for all individuals, Dominicans and non-Dominicans, including an equal protection clause for non-Dominican citizens and investors. Article 25 of the Constitution expressly states that foreign nationals are entitled to the same rights and duties in the Dominican Republic as Dominican nationals, except, understandably, for the right to take part in political activities. Article 221 of the Constitution sets forth that the government will ensure equal treatment under the law for local and foreign investments.
Individuals and entities, domestic and foreign, have a quick and inexpensive remedy for the protection of their constitutionally protected rights: the writ of amparo, which is granted by all courts and is subject to an appeal to the Constitutional Court
Cases in Dominican courts are decided by judges, not by juries. Judges rule based on the texts of the Constitution and existing statutes, the precedents of the Constitutional Court (which are binding) and the precedents of other courts (which are not binding). They do not rule in equity, as in some common law countries, but the principle of good faith is recognised by statutory law and grants the courts some discretion. Punitive damages are not awarded in injury cases – just compensatory damages.
Regarding evidence, parol evidence is admissible in criminal, labour and commercial matters, and, under certain circumstances, in civil and real estate matters.
Finally, real estate laws are national in scope and application.
1.2 Main Market Trends and Deals
The main trends in the real estate market in the Dominican Republic continue to be the development of important projects in the tourism sector, as well as new projects for the cruise sector after the success story of the Amber Cove project in Puerto Plata.
Many well-known international developers have continued with multiple projects, some of which are already operational, in the areas of Punta Cana, Bani, Miches, Puerta Plata, Santo Domingo and the southwest provinces of Pedernales, Barahona and Peravia – Bani.
Of note in the past 12 months can be mentioned Club Med's Miches Playa Esmeralda hotel, a five-star, 400-room hotel just built in a 93-acre beachfront property in Miches, Dominican Republic, the first major hospitality project in the Miches area, destined to become the next Punta Cana in terms of tourism development in the Dominican Republic. The firm assisted Club Med in the acquisition, permits and tax exemption matters under the country's Tourism Incentive Tax Law (CONFOTUR).
1.3 Impact of Disruptive Technologies
Disruptive technologies have transformed every step of the real estate value chain, providing massive opportunities for the industry. The technologies with the highest rate of adoption include augmented reality (AR), drones and artificial intelligence (AI), along with instant communication channels and social media, big data and the 5G network.
So far, the fastest adoption has been in AR and drones for surveying properties and neighbourhoods and for providing virtual tours, and, obviously, due to the fast-paced nature of the business, instant communication tools and social media.
There is still room for improvement in the way big data is being used by the industry, but this will likely change as AI-powered customer relationship management and listings become more prevalent.
There are a lot of expectations of the 5G network, to which the President has given high priority, which will influence real estate development, from the way existing structures are used, to the way new ones will be integrated to the internet of things. Smart buildings have been the standard for new constructions in the country for some time now.
The outlook is that as blockchain technology becomes more mainstream, it will permeate to the industry, for it has been touted as a far more secure and transparent way to conduct transactions.
1.4 Proposals for Reform
On the legislative front, the much-anticipated new statute on real estate evictions, Law 396- 2019, has been in force since October 2019. This law regulates a formerly relaxed practice in real estate evictions and at the same time brings added security to the protection of real estate rights against unlawful eviction processes.
2. SALE AND PURCHASE
2.1 Categories of Property Rights
Dominican real estate law recognises the following interests in real estate:
- absolute ownership;
- condominium regimes; and
- privileges and mortgages.
It does not recognise co-operative ownership arrangements or other occupancy interests.
2.2 Laws Applicable to Transfer of Title
Registration rules are established by the General Director of the Registries of Title and are applicable nationwide. The Dominican Civil Code states that buyers pay all the fees, expenses and taxes required for conveyances, unless agreed otherwise by the parties.
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Originally published by Chamber and partners Global Practice Guide to Real Estate 2022: Law & Practice.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.