Due diligence is the most critical phase of any real estate transaction in the Dominican Republic. It is the legal process through which the buyer confirms that the property can be legally transferred, that the seller has the right to sell, and that no hidden risks exist that could affect ownership or value.
Unlike some jurisdictions where due diligence is limited to a title search, Dominican due diligence is broader and more substantive. It involves a comprehensive legal, tax, and factual review of the property and the parties involved.
From a legal perspective, due diligence begins with a detailed review of the Title Certificate and the property’s registration history. This includes confirming the registered owner, reviewing any existing mortgages or liens, verifying annotations, and ensuring that the property boundaries correspond to what is being sold. Any discrepancy at this level can have serious consequences if not addressed before closing.
Beyond title, due diligence also includes tax verification. Outstanding property taxes, unpaid IPI, municipal taxes, or condominium fees can follow the property and become the buyer’s responsibility if not detected early. In projects claiming CONFOTUR benefits, due diligence must also confirm that the specific unit is covered by an approved resolution and that the exemptions remain in force.
If the seller is a company, corporate due diligence becomes essential. This includes verifying the company’s legal existence, authority to sell, corporate approvals, and compliance with Dominican corporate and tax law. Many disputes arise when buyers overlook corporate defects that later invalidate or complicate ownership.
In practice, due diligence is not merely a checklist; it is a risk-management exercise designed to protect the buyer’s investment. Proper due diligence allows informed decision-making, negotiation of protections, or withdrawal from a transaction before funds are irrevocably committed.
