Understand this before booking Real Estate in the Dominican Republic

It is common practice for real estate developers in the Dominican Republic to require a reserve deposit to take a unit, condominium or lot, off the market. That happens particularly with pre-construction projects.

The typical amount required to reserve a unit will range between US$2,000 and US$15,000, which will be credited to your down payment if you decide to move forward with the purchase. The reserve deposit gives the buyer or their attorney time to do due diligence and get their financing in order.

The two mistakes I see foreigners make when booking a property are:

1. Not having a valid reservation contract.
2. Accept a non-refundable deposit.

First, you only need to send deposit funds to a developer or seller with a signed reservation agreement. There has to be something more than a payment receipt or a reservation slip. The booking agreement should set out the amount of time you have to complete your due diligence and the penalty (or percentage of the deposit you will lose) if you decide not to proceed.

Secondly, a non-refundable deposit is not legal. A penalty for keeping the property off the market, yes, is reasonable. However, losing your entire deposit is not acceptable. And, if you have a developer who requests a non-refundable deposit, you should not do business with them.

Let’s say you are interested in purchasing a pre-construction condo unit in Punta Cana, and the minimum reservation deposit amount is US$5,000. Before you send funds, a reputable developer will present you with a reservation agreement that says you have 45 days to complete your due diligence, and if you decide not to move forward with the purchase, your deposit will be refunded, minus a 20% penalty. .

In this case, you would lose US$1,000 of your deposit, not the full US$5,000.

Again, before you send any booking deposit to a developer, have a booking agreement in place with the number of days you have to complete your due diligence and the penalty percentage if you decide to back out of the deal.

And, if a developer is pushing for a non-refundable deposit, walk away from that deal.