Quick Due Diligence - Nunez Clark and Palm Hills Real Estate

ecarignan

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Hi,

I am about to make a commitment to buy a house in Casa Linda (Sosua) from Palm Hills (Ronaldo Scacchi). He wants to use Nunez Clark or Guido Perdomo for the transaction. I was wondering if any of you had dealings with these lawyers?

Also, the real estate guy tells me there is no tax since I'm buying the corporation that owns the property, is that correct or should I expect to get a hidden tax in the near future?

Any comments are much welcomed.

Very informative board.
 

Ken

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Guido Perdomo is a competent, trustworthy lawyer. The other one may be, too, but I don't know of him.

When buying a company, you don't pay the property tax you would pay if buying it in your own name. You won't own the property, you will own the company that owns the property--in other words, there has been no change in the property ownership--still the same company as before.

I owned a company that owned land in Samana. I sold the company. I now own a company that owns a condo in Sosua.

One of the advantages of owning a company that owns the property is that if the president of the company dies, the vice president takes over. There is no inheritance tax to be paid to the Dominican government, as would be the case if you owned the property in your own name and later died.

Every year the attorney is supposed to file a report on the activities of the company and also a tax statement. Since you won't be a money making company, there will be no tax to pay but you will be charged by the attorney for preparing and filing the papers. Probably a couple of hundred US.

Most foreigners buying property in the DR either buy a company that owns the property or have the sellers form their company, then buy it.
 

ecarignan

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Thanks Ken,

I have heard in the past of Perdomo as well. Now another question comes to mind, since I will be using the property mostly for renting out and sending clients to the DR, I am looking for an trustworhty agency to take care of maintenance of pool, garden and maid services and even if possible, someone to greet my guests at their arrival.

Any such services on the north coast, any referrals? I could also use referrals for agency that would rent out while it's available?

Thanks for all your help.

Just came back from a quick week in Sosua, it was quite nice.
 

Robert

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Speak to Eddy, he often posts on this board. He has condo's in Sosua, so I'm sure he can help you.
 

Ken

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ecarignan, a person I recommend highly is Carma Biggs, a mature, responsible Canadian ex-pat who is very experienced at this sort of thing. This is her profession in the DR, and among the properties she manages are several in Sea Horse Ranch, the most exclusive residencial area on the North Coast. I called her before writing this to be sure she was still accepting properties and she said that she was. You can reach her at carmabiggs@yahoo.com or at 809-571-1033.

She would not only be able to have the guests met at front door, but could also pick them up at airport if this would be better.

I recommend her without reservation.
 

Paul Thate

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when the house is worth over a certain value there are yearly taxes to be paid.
If your realestate agent told you thats not so he is lying and I would watch out..
Every year I pay taxes and believe me If I did not have to I would not.
By the way Guido is excelent and would recommend him highly.

And I assume you are aware of the monthly maintenance fees.
 
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Golo100

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Paul may be right

I am involved in a company that owns real estate and we pay taxes on the property in spite of the fact that the property produces no income, but has maintenance expenses.

What we do not pay are inheritance taxes. But we have to pay for a lawyers to keep us within the legal requirements up to date.

A question. Is this property part of the offering being made in the newspapers by Bancredito? If so, have you checked well why is everybody getting out of these properties all together? Did you check to be sure eveything is clean of mortgages, debts, etc.? Were these properties auctioned or repossesed by the bank?

TW
 

Ken

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escarignan, I'd recommend that you post the question on taxes in the legal section so that Fabio Guzman, the lawyer who responds to questions in that sections, can address it. Explain that you are buying a company whose only property is a house of ?? approximate value near Sosua. What you want to know is whether property taxes must be paid annually and, if so, approximately how much.

With respect to monthly maintenance fees paid in Casa Linda, I understand from contact with another purchaser that they are US$170-180/month and go for such things such as the 24-hour security, which I'm told is excellent. By chance I talked with someone Sunday who had gone to Casa Linda earlier in the day. He told me he was stopped and questioned at the gate, then when he arrived at what he said was his destination there was another security man waiting to make sure he went where he said he was going to.

PS: By coincidence, through this board in last month I have gotten acquainted with three people (including yourself) who have purchased or are purchasing homes in Casa Linda.
 
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Criss Colon

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Get your "OWN" lawyer!

They can have their lawyer do the paper work,and transfer,but you should have your own independent lawyer to protect your interests.He can see if there are any delinquent taxes or transfer fees due!Have you had a "Title Search" done????????????????? Lots of real estate is sold without a "clear" title.You could really get burned here!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!CRIS
 

ecarignan

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golo, as for Bancredito in newspaper, I am not sure, I am aware of 3 houses in Casa Linda that got sold in the last month or so, 2 of them were by the same German owner, including mine, another one was sold by AmericanRealty.

I am relying on Guido Perdomo to make sure the house is clean of any mortgage and so on. Otherwise, how do I check these things? Can I rely on the lawyer to verify and give me a nice and clean property. I have a copy of the title.
 

Paul Thate

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casa linda

Is your new purchase in the old casa linda or in the new part.?
While security in the old part is excelent it might not always be like that in the new part.
There are less houses to share the cost. In the futur the old owners might balk at subsidising your cost.
 

ecarignan

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criss, thanks for the warning. this goes back to previous reply, can I rely on Perdomo to do the Title Search. I can use my own lawyer here in Canada but I doubt he would be able to do much because he is a corporate lawyer not knowing the regulations of the DR. Again, can I use Perdomo to do the transaction and give me a clean deal or should I use another lawyer to do the Title Search?
Also, I am supposed to forward 10% of the amount to the lawyer, in this case, Perdomo in his Trust account. Does this work out the same way as in North America, if something goes wrong, the money is still in the lawyer's in trust account?
 

Ken

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ecarignan, I believe you can trust Perdomo. I have never heard anything negative about him and know several people who use him and have great confidence in him. However, if you have any doubts at all, I recommend Fabio Guzman, the attorney who answers questions to the Legal section. His offices are on the 3rd floor of the Bommarito building. His website is www.drlawyer.com, and you can email him at info@drlawyer.com. But have the title search done here, not in Canada.

I think the apparent confusion over taxes is easily explained. I am sure what your realtor was talking about were the taxes you would pay if buying the property as an individual. A property tax--I believe it is 4% of the value--would be paid at the time of purchase if you purchased as an individual. Since you are buying a company, this tax isn't collected. Whether or not you pay property taxes annually is another matter and should be checked on.

Re trust account, I can't speak from experience with Perdomo, but I know from experience with Fabio Guzman that he maintains a trust account in Florida where the money is held until the deal is finalized. I would be extremely surprised if there were any problem with Perdomo. I have heard nothing but good about him, and Paul Thate--who undoubtedly does have experience with him--recommends him highly.

We are talking about two of a very short list of attornies that can be recommended highly. You can't be too cautious in checking out attornies, but in your case I think you are in the clear. If it were me, I would use either one without hesitation.

PS: Re the title that you have in your hand, that does not take the place of a search by the attorney. Since you are buying a property owned by a foreigner, chances are the title is good. But when buying from a Dominican owner there are often problems because though the title is genuine it is in the name of some dead relative. The family has never gone through the expense of bringing it up to date. When this property is sold to another Dominican there are seldom problems, but when sold to a foreigner problems almost certain because then the heirs start clamoring for their share. But, as mentioned above, since you are buying a property that was owned by a foreigner it is very likely the title is valid. But you still want to have a title search to be sure their are no liens against the property, etc., that have not been recoreded on the back of the title you hold in your hand.
 
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ecarignan

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thanks Ken, suddenly, you make me feel a little more confident. I think I will stick with Perdomo and have him do extensive Title Search.

Paul, it is in the old section (1998), which consists of approx 20 or so houses. I know for a fact that security is excellent, I wanted to visit another house and was accompanied by a guard at all time.

Insurance? Are the home insurance in the DR. I know fire does not seem to be a problem and somehow theft is controlled by the security bill but are there responsability insurance (ie. is someone drowns in the pool or if a tree falls on a guest's head? I have read a lot but can't find anything on insurance. Since there would be no mortgage, the mortgage insurance is not needed either.
 

Ken

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Insurance is available. I'm told it is expensive, but know nothing about it. Besides the cost, you need to check on the record of the company with respect to paying claims. I have heard a lot of horror stories about insurance companies during my years in the DR, but have no first-hand knowledge.
 

ecarignan

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Basically, I should stay away from insurance, right? This is something that we can't do in Canada. Can someone sue me if he trips on a coconut and breaks a leg or is there no such thing in the DR, live and let live!
 

rendul

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Insurance

We rent out our place in Cabarete and the lease/rental agreement, considered binding and legal, disavows us of all responsibilities regarding injury. I was told that if you get insurance you pay high fees for years and should there ever be a claim it is almost impossible to claim. Even if you submit a claim the insurance companies do not pay and you end up in court paying court fees as well. We made a comprehensive lease/rental agreement that is signed well before occupancy. Hope this is helpful. ;)
 

goneglobal

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If buying a company in the DR.....

does one assume any or all debt the company has incurred up to date of sale....and if so, how does the buyer of the existing company protect themselves from any unknown and pre-existing
liabilities incurred by the company and/or its officers/directors?

I jumped in a bit late here and only Know that in some juristrictions this might be a concern....