Property Registry Law No. 108-05 and its Regulations
Due to its history, the Dominican Republic follows a civil law system predominantly based on the French Codes drafted during the reign of Napoleon in France. Consequently, Dominican statutory law is primarily codified in the Civil, Commercial, Civil Procedure and Penal Codes, sometimes referred to as the Napoleon Codes. In light of the connection to the French legal system, Dominican judges are generally influenced by French case law and their interpretation of the Napoleon Codes. Nonetheless, some more recent statutes have departed from the French legal system influence (for example the Criminal Procedure Code).
However, the Dominican real estate property system is based on the Torrens System, which originated in Australia (common law). In this system, recorded real estate property rights are binding and enforceable against all third parties once said rights have been recorded, and provides that the person who records first has priority. Therefore, the Dominican real estate property system can be assimilated to a record-notice jurisdiction. Dominican courts do not rule in equity. The Dominican legal system acknowledges the possibility of obtaining either mandatory or prohibitive injunctions as equitable remedies to prevent unlawful actions or for the execution of certain types of contracts and obligations. An example of this remedy applicable for real estate property matters would be the possibility of obtaining provisional measures before the land court, aimed at preventing an eventual damage or eliminating any illegal or excessive disturbance. Parole or oral evidence is admissible.
What are the legal requirements for recording conveyance documents?
Conveyance documents must be filed at the title registrar office that has jurisdiction over the property. In order to record a conveyance, the following documents are required:
- Conveyance document, which must be drafted in accordance with Dominican Real Estate Law (Law No. 108-05);
- Original title certificate, in order for it to be cancelled and substituted by a new title certificate to be issued in favors of new owner by the Title Registrar Office;
- Evidence of tax payments related to the real estate property;
- Payment of real estate transfer taxes (3 per cent of the price set forth in the agreement or the appraisal made by Dominican tax authorities, whichever one is higher) – these fees are paid by the purchaser, unless agreed otherwise; and
- Copy of the identity card or passport of the parties, or taxpayer card, if a legal entity.
What other factors should a foreign investor take into account in considering an investment in your jurisdiction?
In accordance with article 3 of the Dominican Civil Code, real estate properties, even if owned by foreigners are subject to Dominican law. Likewise, foreign nationals do not have any restrictions in the acquisition or leasing of real estate property. Any entity that does business in Dominican territory, including owning real estate property, whether foreign or Dominican, must register in the Mercantile Registry that is kept by the local chamber of commerce and production in the place the company has its main domicile and will have to register in the National Taxpayers Registry. Likewise, the individual or entity must pay applicable annual taxes on the real estate property, and, in accordance with its operations in the country, file the appropriate income and other tax returns as may be applicable.