ALTECO INMOBILIARIA RD

The Dominican Republic real estate market has taken a historic step toward modernization. The entry into force of Law No. 85-25 on Real Estate Rentals and Evictions repeals the previous obsolete regulations, introducing a legal framework that seeks to balance the rights of owners and tenants, streamline legal processes, and bring transparency to financial transactions.

For our community and clients at ALTECO INMOBILIARIA, we have prepared a direct breakdown of the four fundamental pillars that will impact your upcoming lease agreements.

1. Regulated Security Deposits: An End to Excessive Fees

The new legislation establishes clear rules for the initial payment when renting a property intended for housing, commercial use, or non-profit entities:

• Strict Limit: A maximum cap of two months of security deposit is set for the rent.
• No More Forced Advances: The owner cannot demand advance payments that exceed one single monthly rent, unless there is a voluntary and express agreement between both parties.

2. Real Estate Commission: Who Pays?

One of the most discussed and important changes is found in Article 7 of the law, which redefines the traditional real estate brokerage payment structure:

• Owner's Responsibility: The law establishes that the payment of the brokerage commission is the responsibility of whoever hires the service. It is automatically presumed that any publication or rental offer of the property was ordered by the owner, thereby releasing the tenant from this financial burden.
• Shared Legal Expenses: The same article clarifies that notary fees and expenses for drafting the lease agreement will be split equally: 50% paid by the owner and 50% paid by the tenant.

3. Caps on Rent Increases and Foreign Currency

Price controls and transactions in foreign currencies are now regulated under specific conditions for commercial transparency:

• Annual Increase Cap: If a residential contract does not stipulate an annual increase percentage, the law sets a maximum cap of a 10% annual increment.
• Payments in Dollars: If you agreed to the rental price in a foreign currency (such as US dollars), the tenant retains the optional right to pay the equivalent in Dominican pesos, calculated using the official exchange rate of the Central Bank on the exact day of the payment.

4. Fast-Track Evictions and Law Exclusions

The regulation aims to protect real estate investments by providing greater legal security to landlords, substantially accelerating the timelines to resolve disputes over non-payment or contract violations. Additionally, it strictly prohibits subleasing without written authorization.

It is important to note that short-term or vacation rentals (such as home-sharing platforms like Airbnb) are **excluded** from this law, as well as properties located within free zones.