The real estate sales agreement in the Dominican Republic, final contract.

What Is a Real Estate Sales Contract in the Dominican Republic?

A real estate sales contract in the Dominican Republic is the final legal document that transfers ownership of a property from the seller to the buyer and allows the property to be registered in the buyer’s name.

When you have already agreed on the price, the form of payment and the delivery of the property and whether or not they have signed a previous contract, or what is also known as a promise of sale contract, you must sign the final sale contract or what is the same the sale contract.

In the event that you do not have the resources for a full payment or the property cannot be delivered, because it is under construction, then a promise of sale or pre-contract agreement would be made, so as not to abound much here , that will be in another post, let’s go back to the sale contract, it is a document that has the purpose of transferring the right of ownership over the property sold from the owner to the buyer, that is, it is the legal document that allows registering a property in the buyer’s name and excluding it from the seller’s assets . In other words, this contract is the one that will allow you to transfer the ownership of your assets in case of sale or place the property in your name in case of purchase.

Payment Terms and the Tripartite Contract

The sale contract can also be subject to payment terms, so that the total price of the real estate is not paid immediately. For this there are several modalities and the Dominican legislation provides for the registration of privileges, of which I will talk later about what are the Registration Privileges

In the event that the purchase of the property is through a mortgage, it is replaced by a contract called “Tripartito ̈ referring to the 3 parties involved in the transaction and must bear the signature of the seller, buyer and the financial institution or person who I will lend you the money to buy the property.

Registering the Sale and Paying Transfer Taxes

Once the payments have been agreed and / or settled and the contract of sale has been signed, it must be deposited with the Local Administration of the General Directorate of Internal Taxes, in order to request the appraisal of the property purchased and determine the amount of taxes to pay for the tax. transfer to place the property in the name of the buyer.

Promise of Sale vs. Final Sale Contract

The most common is that in the Dominican Republic, two contracts are signed: the promise of sale or conditional sale and the final sale, either to agree to installment payments, get information and documentation of the property involved or for availability delivery of the same.

Before You Sign: Verify the Seller’s Tax Status

Remember, before acquiring a property or signing a contract, consult your real estate advisor and your trusted lawyer, ask them for the previous verifications required in real estate operations, and most importantly, and do not sign a sale contract without first checking that the seller of the property is up to date in the fulfillment of its tax obligations such as the IPI, you can check in my previous post about the IPI if you are curious.

Before reaching this final step, most buyers first sign the purchase agreement (precontract) and, if financing is needed, arrange the mortgage loan in the Dominican Republic.

What is the difference between the promise of sale and the final sale contract?

The promise of sale (precontract) commits both parties to a future sale, while the final sale contract, or real estate sales contract, is the document that actually transfers ownership once payment terms are met.

What is a Tripartite Contract in a Dominican Republic property sale?

A Tripartite Contract is used when the purchase is financed through a mortgage. It bears the signatures of the seller, the buyer, and the bank or financial institution providing the loan.

Where is a real estate sales contract registered in the Dominican Republic?

Once signed, the contract must be deposited with the Local Administration of the General Directorate of Internal Taxes (DGII) to request the property appraisal and determine the transfer tax owed.

What taxes are paid when signing a real estate sales contract?

The main cost is the property transfer tax, calculated on the appraised value determined by the DGII; your real estate agent and attorney can help you estimate this before signing.

Do I need a lawyer to sign a real estate sales contract in the Dominican Republic?

You can check a seller’s IPI (annual property tax) status directly on the DGII website before signing, since unpaid property tax can delay or block the transfer of ownership.