Beware of Traps in Your Real Estate Purchase Contract in the Dominican Republic
When buying real estate in the Dominican Republic, the most critical step is reviewing the purchase contract. Many buyers, especially foreigners, attempt the “Do It Yourself” route to save money, but this can lead to agreeing to unfavorable terms and clauses. To avoid potential problems, it is highly recommended to hire a reputable Dominican Republic real estate attorney to assist you throughout the process.
Here are five crucial details in the purchase contract that buyers and their attorneys should pay close attention to:
1. The language of the contract:
Ensure that the purchase contract is provided in both Spanish and English if you’re an English-speaking buyer. You must fully understand the terms you are agreeing to.
2. Force majeure:
This clause typically covers events beyond anyone’s control, such as natural disasters. However, some developers might include unrelated incidents like late permits or subcontractor issues under force majeure. Your lawyer should have these irrelevant stipulations removed.
3. Developer Penalties:
If construction is delayed, negotiate the terms of the penalty with the developer. This should cover your projected losses, especially if you planned to use the property for short-term rentals.
4. One-year warranty:
Under Dominican law, there is a one-year warranty on new construction. Ensure that the contract reflects this, as some developers might attempt to limit it to 3 to 6 months. Your attorney should safeguard your rights in case of any problems within the first year.
5. Agreed unit size vs. delivered:
In cases of pre-construction purchases, the contract might include a clause stating that the price remains the same even if the delivered unit size differs from the agreed size. Be cautious of this clause as it could lead to significant losses.
By carefully reviewing these details and seeking legal guidance, you can protect your interests and make a well-informed decision when investing in Dominican Republic real estate.
Attorney Jose Gerardo serves as the Executive Director of Punta Cana Attorneys, a law firm specializing in Dominican Republic Immigration and Nationality law.
