What Are the Pitfalls of Buying Property in the Dominican Republic?
The process of purchasing real estate property in your country might differ from buying property in the Dominican Republic. The Dominican Republic is one of the most visited countries in the Caribbean region, thanks to its beautiful beaches, national parks, and famous outdoor activities like hiking and golfing.
The country’s property is in high demand because many people want to invest and benefit from the fast-growing economy. However, the high demand has also led to an increase in fraud. Always avoid purchasing unallocated land to be safer when buying real estate here. You should also verify the property’s legal status and check the seller’s marital status.
Some of these verifications require you to have a lawyer, so set aside some funds to hire one. You should also do your due diligence on the land, like checking the growth or development of your property. This helps you know if future growth is probable.
Some Pitfalls of Buying Property in Dominican Republic
Whether you want a vacation home or investment property, Dominican Republic is one of the most ideal places to purchase property worldwide. However, the high demand has led to an increase in fraud cases. Some red flags to avoid when purchasing real estate in this country are;
Failing to Check the Legal Status of the Property
Identifying your next home or investment property can be exciting, and most investors want to be done with the payment before another buyer overtakes them. However, even in your excitement, always start by checking the legal status of the property.
You do not want to spend years in court waiting for investigations to be done on your new piece of land. Therefore, ensure you hire a lawyer to help you scrutinize the house or piece of land before committing to buy.
The lawyer will help you to verify the original title deeds and the building approvals. You should also check and ensure that the documents of sale have a stamp and are registered. Other important documents to review are transfer deeds and share certificates.
When scrutinizing the property, your lawyer will also help you check for any opposition, mortgage arrears, seizures, and warning notes. Some sellers do not disclose these conditions to the buyer because they can affect the disposition of the property.
Verifying these documents requires you to pay a fee of RD$1000, which is equivalent to $18. These documents are available in the office of the Registry of Titles in the Complementary Registry.
You can get the certification of the legal status of the property at the Title Registry Office, where the property is, or check the Real Estate Jurisdiction platform. Ensure you get a lawyer to check the details more easily.
Failing to Check the Growth and Development of the Property
Whether buying a retirement home or an investment property, you must be sure of the area’s potential growth. Therefore, besides liking the house structure, check the property’s location.
Check the nearby amenities. Ensure your house is close to grocery stores, entertainment joints, schools, and roads or public transportation. While these amenities might seem unimportant, they increase your home’s value.
Check if there is the potential for future commercial developments around the area. These could be offices, rental centers, and industries. They can cause an improvement in the value of property in the area, which is advantageous.
To check the potential development of the property you are buying, you can investigate how long the projects around have been available and the amount of growth done within that period.
The potential for developing a particular place can be investigated on the area’s website. Check how old the website is and people’s reviews about the location. You can also talk to the neighbors or the seller about the area’s growth.
Checking the status of the land is essential when buying real estate property. Always ensure you are not buying unallocated land because these should not be sold. Unallocated land is retained for public ownership and is kept for environmental purposes like building national reserves and conserving forests.
Therefore, sellers of unallocated land are mostly fraudsters, and you could fall victim if you don’t know how to check. Check the copies of ownership documents. They come in different colors and sizes with different meanings.
For example, a delimited property has a blue title. Such land has limits as to how you can use it. If you want unconfined land, check if the title is pink. The large green titles might look suspicious, but they are valid. However, you should have it replaced with a modern title once you take it to the Registry of Titles.
Failure to Know the Marital Status of the Seller
As invasive as it may sound, knowing the property seller’s marital status is essential before committing to buy land. Marital status ensures properties and homes are appropriately transferred to the new owner.
Spousal rights give both parties in the marriage ownership of the property, so they must both sign the paperwork during a sale. If one spouse is not involved in the selling process of the property, they can sue the partner.
The title deed of the land or property might read one name, but if the seller is married, the partner has a right of ownership. You should check their status at the Central Electoral Board, which administers Dominican citizens’ registry and marital status.
Also, note that if the seller has a partner with whom they have lived for more than five years, the law recognizes them as a wife or husband. It is, therefore, essential to ensure both parties sign the act of sale.
Process of Canadian Buying Property in Dominican Republic
Buying property in the Dominican Republic is straightforward for residents and foreigners. There are no restrictions like special licenses for buying homes and properties for sale. However, investing real estate in a foreign state is always different.
Once you identify the property to buy, hire a lawyer to conduct a title search. This ensures there are no legal issues with the land, which is important because there have been cases of people selling properties that are not theirs.
The title search also helps determine if the property has mortgages or liens. Ensure you also check if the taxes of the property have been paid. If the land is legally clean, proceed with the purchase by agreeing on the price.
You will agree with the seller on the buying price, and this can be affected by any unpaid taxes. Other costs include the notary fee, documentation stamp, and real estate agent fee.
You should then agree on the amount of deposit to pay. If you are a foreigner, you will incur a foreign exchange fee, depending on your payment mode. You can pay using bank transfers, e-transfers, cheques, or money orders.
However, you can evade hefty exchange fees by exchanging your currency at Knightsbridge FX. Besides offering lower rates, the transfer process is straightforward, and you don’t pay other hidden fees.
Like investing in other countries, you should be careful when buying property in the Dominican Republic. The area is in high demand due to the beautiful tourist attractive features, which has increased the crime rate. Always check that the land you are buying is not unallocated, verify the seller’s marital status, and check the legal status of the property and the potential for development of the area.