Dominican Republic landlord and tenant laws are judged by the Global Property Guide to be Pro-Tenant between landlord and tenant. While landlords do retain some rights — such as the right to claim damages, specific performance, or seek eviction — the practical reality is that tenants are heavily protected by the legal system, making it challenging for landlords to enforce their rights quickly.

Rents: Can landlord and tenant freely agree rents in Dominican Republic?

In the Dominican Republic, there is universal rent control, which sets the maximum monthly rent at 1% of the value of the rental property. This means that the annual rental return is effectively capped at 12% of the property's value. This rent control system aims to regulate rental prices and provide tenants with more affordable housing options by limiting the amount landlords can charge for rent.

Landlords must comply with these regulations, ensuring that rental prices do not exceed the established limits.

If the landlord wishes to increase the rent, a permit must be filed and approved by the authorities, subject to appeal to a special commission. This is a lengthy process where the landlord ends up receiving the old rent for the next months or even years.

The rental contract, however, may contain a clause increasing the rent periodically, based on the cost-of-living increases of fixed percentages agreed upon by the parties, subject to the maximum rent allowed.

It is advised that an escalation clause should be included in the contract to deter the tenants from extending the lease. An escalation clause says that if the tenant wishes to stay after the lease contract expires; the rent will be increased remarkably. However, legally this is not allowed.

Deposits

A month's rent in advance and a security deposit of two to five months is commonly required prior to rental. There is no maximum allowable amount for deposits. Some landlords use a fiador (a Dominican or a long-time resident) to guarantee the payment of rents. In case the tenant is unable to pay, the fiador will be liable. However, it may not be easy for the tenant to find a guarantor. When this difficulty arises, a six month deposit is obtained from the tenant before the rental commences to protect the landlord's interests.

The law mandates that the security deposit should be paid into Banco Agricola and returned without interest after an amount for repairs has been deducted. In reality, nobody puts security deposits in banks and very few landlords return the deposit. Most of the time, the tenant uses the deposit to pay the last months of the tenancy.

What rights do landlords and tenants have in Dominican Republic, especially as to duration of contract, and eviction?

Rental agreements in the Dominican Republic normally last for three to six months. However, even if the contract already expired the tenant can continue living in the unit as long as he pays the rent.

Tenant rights are highly protected in the Dominican Republic. You can only evict a tenant on six grounds:

1. failure to pay rent,
2. misuse of the property,
3. subletting (if prohibited by contract),
4. changing the structure of the premises,
5. reparation or reconstruction and if the owner will inhabit the property for at least two years.

In the event of a breach of lease terms, tenants have the right to sue landlords for the specific performance of any obligations under the lease, as well as to claim damages. Similarly, landlords can sue tenants for specific performance, damages, or even eviction.

The customary procedure for evicting a defaulting tenant involves suing in court. This process is often time-consuming for two main reasons:

1. In many cases, the landlord must first go through an administrative procedure, which often grants the tenant grace periods of six months or more before any legal action can be taken.

2. Eviction orders issued by lower courts are subject to appeals in two higher courts, which can extend the process to three years or more if the tenant has legal representation and challenges the eviction.

This extended timeline can make eviction a lengthy and complicated process for landlords.

How effective is the Dominican legal system?

While landlords do have the legal right to evict tenants for non-payment or breach of contract, the effectiveness of the Dominican legal system in executing evictions is low — it is slow, procedurally complex, and tenant-friendly.

Eviction for failure to pay rent usually take five months or more. Eviction on other grounds is more cumbersome and difficult, since there is a mandatory administrative phase before the landlord can obtain the judicial eviction order from the Justice of the Peace. In the administrative phase, tenants are granted time to look for alternative dwelling, minimum of six months but usually a year or more. Applications for rent increase are likewise cumbersome.

Landlords prefer to rent to foreigners to minimize, but not totally eliminate, the risk of overstaying.

Legislation

Residential rentals in the Dominican Republic are governed by Articles 1714 to 1762 of the Civil Code (general principles of the rental contract); Decree #4807 of 1959, Law #38 of 1966 and Law #481 of 1973 (rent control and protection of the rights of the tenant); and Law #4314 of 1955 (mandatory deposits in Agricultural Bank).

Brief History: Recent changes in Dominican landlord and tenant law

Tenancy law in the Dominican Republic has been unchanged for decades. Economic difficulties in the 1950's provided the background for the enactment of Decree #4807 which established the system still in place of overprotection of tenants' rights.