Review of the Draft Bill on the General Law of Real Estate Rentals and Evictions

Brief Historical Overview:

Legislation regarding real estate rentals is old and scattered, containing obsolete aspects that are no longer applicable. The first document establishing the right to dignified housing is our Constitution. The first legislation regulating this matter was Decree No. 2213, dated April 17, 1884, which adopted the French Civil Code translated into Spanish, including certain provisions of the Dominican Republic’s Civil Procedure Code. After this modification, no updates were proposed on rental matters until the Trujillo government, introduced the most significant changes through Law No. 4314, dated October 22, 1955. This law was the first to establish the leasing and eviction process for real estate. It was later amended by Law No. 17-88, dated February 5, 1988, which sought to regulate the provision and return of tenants’ deposits given to landlords.

Review of the Current Draft Bill on the General Law of Rentals

Since there have been no significant legislative changes in this area, our Chamber of Deputies has approved, in the first reading, a new proposal for a law aimed at regulating legal relationships originating from the rental of real estate to standardize practices in this matter. The new law will apply to:

• Residential use.
• Non-residential uses (commercial, industrial, artisanal, professional, technical, welfare, cultural, educational, recreational, or public activities and services, among others).

This draft law seeks to cover written and verbal contracts for real estate rentals, regardless of the property’s location. However, it excludes the following:

• Urban and suburban undeveloped land.
• Rural estates.
• Registered guesthouses and lodging establishments.
• Temporary occupancy of spaces or stalls in markets, fairs, or during festivities.
• State-owned properties rented or leased.

The draft introduces several innovations modernizing agreements in this area, such as:

1. Consent from all property co-owners will be required to rent indivisible properties, although a representative may be appointed for agreement signing and payment collection.
2. Fixed parameters for a valid contract will be established, including party details, property address, inventory of rented furnishings (if applicable), notarized signatures, and a specific mention of the intended use.
3. Rent will be freely agreed upon by the parties.
4. Implicit acceptance of rent payment in foreign currency and mandatory issuance of payment receipts.
5. Advance rent payments of more than one month will not be allowed.
6. Rent adjustments will be subject to mutual agreement.
7. Grounds for contract termination include:
   a) Expiration of the term.
   b) Property destruction.
   c) Default by the landlord or tenant.
   d) Use of the property for illegal activities.
8. For the first time, early unilateral termination of the contract by either party will be allowed.
9. Even if a tenant vacates the rented property, they remain contractually obligated until the contract’s expiration.
10. The Agricultural Bank will be replaced by the Reserve Bank for deposit management.
11. Landlords are prohibited from:
    • Requiring conditions such as “no children,” foreign nationality, or other forms of discrimination.
    • Using discriminatory language in rental advertisements.
12. If the property is sold during the rental period, the new owner must respect the existing contract terms until its expiration.
13. Subletting or changing the property’s intended use without explicit written authorization will lead to contract termination.
14. Justice of the Peace courts will maintain jurisdiction over eviction cases. Appeals requiring double the penalty amount deposited with the Reserve Bank may delay the execution of eviction rulings.

Final Considerations:

The proposed law primarily updates standard rental practices without introducing significant new measures beyond prohibitions. However, several critical issues remain unaddressed, including:

a) The impact and regulation of short-term rentals via platforms (e.g., Booking, Airbnb) and their negative effects on the tourism and real estate markets.
b) The rise in rental prices and dollarization, makes housing unaffordable for the average citizen.
c) The lack of regulation on property purchases and excessive rentals by non-resident foreigners.
d) Outdated laws regarding private property invasion.
e) The need to define and regulate properties suitable for housing versus economic activities.
f) Failure to enforce Law No. 38-62 (1966), which empowers the General Directorate of National Cadastre to set minimum rental prices based on property size, maintain a registry of state-approved residential properties, and clarify ownership rights.

We support the law’s modernization through this innovative project but acknowledge that critical issues were left unaddressed. We recommend involving stakeholders, such as the construction sector and citizen representatives, during the review process to evaluate and address potential improvements.