Santo Domingo.– A new draft law aimed at regulating real estate rentals and evictions has been approved in its first reading by the Chamber of Deputies. The proposed legislation introduces several key provisions, including shared legal costs for rental contracts and a limit of two security deposits.
The Dominican Republic has long lacked comprehensive regulations governing rental agreements, often leaving tenants responsible for various legal expenses, including a third deposit to cover potential contract-related costs.
The new bill seeks to address this imbalance by stipulating in Article 7 that “legal costs associated with rental contracts shall be shared equally between the landlord and the tenant.” Additionally, the bill specifies that brokerage fees will be borne by the party who engages the services of a real estate agent.
Another common practice in the Dominican Republic has been for landlords to demand three security deposits from tenants, with the third deposit often non-refundable.
To address this issue, the proposed law mandates that landlords may only collect a maximum of two months’ rent as a security deposit. These deposits must be placed in an escrow account at the Banco Agrícola and can be withdrawn upon termination of the tenancy.
Article 13 of the bill states, “Landlords may require tenants to pay a security deposit of no more than two months’ rent to guarantee payment of rent.”
The legislation also aims to standardize rental contracts by requiring that agreements specify the lease term, the intended use of the property, and the monthly rent amount, among other details.
Although the bill’s momentum had slowed, its sponsor, Alfredo Pacheco, has pledged to reintroduce the legislation in August and push for its approval.