Rental Law Bill: A Groundbreaking Shift in the Dominican Real Estate Framework

Introduction

In recent years, the rental of residential and commercial properties has become a key element in the urban development of the Dominican Republic. However, this widespread practice continues to be governed by regulations that date back more than five (5) decades, creating a growing disconnect between the law and the realities of today’s real estate market. In response to this situation, on August 19, 2024, a bill was submitted to the National Congress that promises to significantly transform the rental landscape in the Dominican Republic. This initiative aims to update and modernize a legal framework that has long been outdated, affecting both landlords and tenants.

At Alburquerque Abogados, we understand the importance of this bill and aim to explain it clearly and accessibly, highlighting its key points, the potential impact on the real estate market, and how it promotes a balance between the rights of the parties and the broader social interest.

Purpose and Justification of the Bill

The main objective of the law is to establish a modern regulatory framework governing the relationships between landlords and tenants, ensuring greater legal certainty, contractual clarity, and effective conflict resolution mechanisms. The bill seeks to:

• Establish clear rules regarding the rights and obligations of both parties.

• Encourage investment in residential and commercial rentals.

• Streamline legal processes related to rentals through specialized courts.

• Promote transparency and reduce unnecessary conflicts.

The proposal responds to the current context of urbanization, housing shortages, and the growing demand for residential and commercial spaces—all within a fragmented and outdated legal system that hinders trust and investment.

Scope and Exclusions

This law will apply to all rental contracts for real estate intended for residential, commercial, or other lawful purposes. However, it explicitly excludes certain cases regulated by specific or distinct regulations, such as:

• Rural farms and land

• Officially registered lodging establishments

• Free zones and temporary commercial spaces (fairs, markets)

• Rentals for periods shorter than thirty (30) days

• State-owned properties and parking spaces

These exclusions ensure that the law focuses on traditional leasing without interfering with other special regimes.

Formalization of Rental Agreements

Rental contracts must be in writing and include basic information such as the identity of the parties, a description of the property, rental price, payment terms, duration, and the purpose of the lease. It also allows the inclusion of compliance insurance or special agreements, such as real estate leasing. This formalization reduces ambiguity, protects both parties, and facilitates dispute resolution.

Rent, Guarantees, and Deposits

The parties may freely agree on the rental price, provided that the amount, payment location, and method are clearly stated. Tenants have the right to receive a payment receipt unless otherwise agreed. The rent may be adjusted annually, with a maximum increase of ten (10%) percent of the previous amount, based on inflation data from the Central Bank. Landlords may require up to three (3) months’ rent as a deposit, either in cash (to be deposited in the Agricultural Bank) or in the form of a surety. The contract and deposit must be registered to ensure traceability and legal certainty. In case of disputes, the specialized Justice of the Peace Court will resolve the matter.

Grounds for Termination and Subrogation

A lease may be terminated upon expiration, improper use of the property, destruction of the property, or serious breach of contract. If neither party expresses the intent to end the lease at its expiration, the agreement is automatically extended under the same conditions. In the event of the tenant’s death, the contract may continue with direct relatives or cohabitants, provided they demonstrate the ability to pay, thereby ensuring family stability and legal continuity without requiring a new agreement.

Obligations of the Parties

Landlord’s Obligations:

Landlords must deliver the property in proper and habitable condition, carry out necessary structural repairs, and ensure access to basic services. Discriminatory conditions based on ethnicity, religion, sexual orientation, nationality, or other human rights-protected categories are strictly prohibited.

Tenant’s Obligations:

Tenants are required to maintain the property, make minor repairs, respect the agreed-upon use of the property, refrain from making modifications without permission, and return the property in good condition at the end of the contract. Subleasing is prohibited without the landlord’s written consent.

Eviction Procedures and Special Jurisdiction

Eviction procedures will include a mandatory preliminary conciliation stage before a judicial officer. If no agreement is reached, the case may proceed before a specialized Justice of the Peace Court for rental and eviction matters.

This court will handle disputes related to non-payment, contract termination, contractual violations, and deposit-related issues. A maximum term of thirty (30) business days is established for issuing a ruling, and the use of public force is permitted to enforce judicial decisions.

Rulings, Appeals, and Role of Judicial Police

Eviction rulings will be immediately enforceable. In the event of an appeal, execution will only be suspended if a financial guarantee equivalent to the claimed amount is deposited.

Additionally, the Central Directorate of Judicial Protection Police is established to protect judges, parties, and property during the enforcement of eviction rulings, seizures, or other measures. This reinforces the enforcement of the law within a framework of legality, safety, and order.

Conclusion

The proposed Rental Law represents a major step forward in modernizing the legal framework governing real estate in the Dominican Republic. This legislative initiative not only aims to put an end to outdated and fragmented regulations that have long generated insecurity and informality in landlord-tenant relations, but also seeks to establish a coherent, functional legal structure aligned with the constitutional principles of fairness, legality, and decent access to housing.

Passing this law would substantially strengthen legal certainty in leasing operations, by promoting clear rules, efficient procedures, and accessible, rights-based dispute resolution mechanisms. By introducing new obligations for both parties, limiting arbitrary increases, formalizing written contracts, and guaranteeing more orderly and specialized judicial processes, it creates a more favorable environment for both property owners looking to invest and individuals seeking a place to live or start a business.

At Alburquerque Abogados, we welcome this legislative proposal with optimism and reaffirm our commitment to guide our clients—landlords and tenants alike—through a clear understanding and proper implementation of its provisions. We will closely follow its progress in the National Congress and stand ready to provide expert legal assistance throughout any contractual, judicial, or administrative process this new law may involve.