The Condominium Law In The Dominican Republic Needs Major Revisions

[Alfredo Guzman]

Condominium Law No. 5038 of 1958 is indeed outdated and can be a real challenge to implement in complex and mixed real estate developments. Dr. Christoph Sieger, fellow partner at Guzman Ariza, and myself recently wrote an article on this subject for our firm’s 90th anniversary Special Edition in Gaceta Judicial, published last August. Some of the main issues we discussed include:
1. Distinction between private and common matters.
2. Limits to condo registration.
3. Condo owners’ assembly meetings (recommendations,mistakes, abuses).
4. Condo Management: minimum requirements for managers, illegal use of boards).

For those of you who can handle legal Spanish, you may click on the link below to download the complete article.

http://drlawyer.com/espanol/wp-content/uploads/2017/10/Inm-Sieger-GuzmanS-366.pdf

 

[Alfredo Guzman]

As for the OP, it is what it is, buyer beware. An owner of a condo is not going to get the laws changed in the country. One owner is not the tail that is going to wag that dog.

As for those who do not pay their fees to a legal association. We have a similar situation in our community where a number of owners don't pay an association fee. The association went to court and is getting liens attached to their properties. The problem with such liens is that the association only has a chance to collect the back payments and penalties if the property is sold. If the delinquent owners have bank accounts in the DR, it may also be possible to attach those accounts to receive payment.

Once the lien is registered the Condo Association can proceed with the foreclosure of the unit. There are two alternatives:

1. The delinquent owner's unit is sold at the foreclosure's public auction and the Condo Association receives the proceeds of the sale; or,

2. If there are no bidders, the court will adjudicate the unit to the Condo Association. It can later decide if it is feasible to either rent out or sell to a third party.

 

[Abuela]

It would be beneficial to many here to access a copy in English of this article either on DR1 or the Guzman site. I find Google translation does a poor job of large content.

 

[jimmythegreek]

Once the lien is registered the Condo Association can proceed with the foreclosure of the unit. There are two alternatives:

1. The delinquent owner's unit is sold at the foreclosure's public auction and the Condo Association receives the proceeds of the sale; or,

2. If there are no bidders, the court will adjudicate the unit to the Condo Association. It can later decide if it is feasible to either rent out or sell to a third party.

And what recourse do property owners have against a Directiva and/or Administator that are actively gaming the monthly mantenimiento higher and higher over time? So the property owners just have to continue to pay and lose money or end up with a lien on their property.

 

[Alfredo Guzman]

And what recourse do property owners have against a Directiva and/or Administator that are actively gaming the monthly mantenimiento higher and higher over time? So the property owners just have to continue to pay and lose money or end up with a lien on their property.

You may file a lawsuit if these increases have not been approved at a Condo Owner's Association Meeting. If they did approve them through a meeting, but did not obey publicity, voting or other mandatory provisions contained in the law or the condo rules you may also file a lawsuit to have the assembly meeting annulled.

 

[Tashi Siu's Dad]

Currently, we have about 20% of the units (out of 42) at our condominium, which are in arrears on the monthly fees and Special Assessments that were legally voted-on at the last General Assembly. I made the suggestion that we have a vote at this year's General Assembly (2018) that any owner in arrears with either fees or assessments would not have voting rights at the General Assembly until paid-in-full. I felt that this would "encourage" delinquent owners to "cough-up" what they owe the association. Our local lawyer here in Punta Cana states that that is against the Condominium Law. She suggested that it is contraindication to the title to the property. No where on my title do I see the word "vota" written.

 

[cavok]

The condo association I'm in has had both a board of directors composed of owners with signatory authority over our accounts and outside managers. We've been bilked out of money and robbed by both - despite having an outside auditor.

In general, it's probably better to have an outside manager with some sort of "oversight committee" made up of owners that will keep an eye on the management company and pass a resolution at the AGM to have quarterly audit reports emailed to all owners.

 

[jimmythegreek]

The condo association I'm in has had both a board of directors composed of owners with signatory authority over our accounts and outside managers. We've been bilked out of money and robbed by both - despite having an outside auditor.

In general, it's probably better to have an outside manager with some sort of "oversight committee" made up of owners that will keep an eye on the management company and pass a resolution at the AGM to have quarterly audit reports emailed to all owners.

One thing is for sure-Having property owners as the only signatory on these financial accounts for the property without audit controls is a real recipe for disaster.

In addition, another game they have is where they will go and purchase a 'rubber stamp' audit from some association here that basically is worthless and conceals their activities being that the audit is not legitimate.

 

[cavok]

One thing is for sure-Having property owners as the only signatory on these financial accounts for the property without audit controls is a real recipe for disaster.

In addition, another game they have is where they will go and purchase a 'rubber stamp' audit from some association here that basically is worthless and conceals their activities being that the audit is not legitimate.

That can help, but you have to make sure you have some very trustworthy owners that won't end up in in cahoots with the manager - not always easy to do, especially down here. Also, an American that has signatory authority over a foreign account is subject to FinCEN 114 IRS reporting requirements which can be very burdensome and most likely require a US accountant to do the paperwork.

Make sure you get a good recommendation for a reputable auditor that is not doing any business with the management company. Hard as you try - you can still get ripped-off down here.

 

[Alfredo Guzman]

Currently, we have about 20% of the units (out of 42) at our condominium, which are in arrears on the monthly fees and Special Assessments that were legally voted-on at the last General Assembly. I made the suggestion that we have a vote at this year's General Assembly (2018) that any owner in arrears with either fees or assessments would not have voting rights at the General Assembly until paid-in-full. I felt that this would "encourage" delinquent owners to "cough-up" what they owe the association. Our local lawyer here in Punta Cana states that that is against the Condominium Law. She suggested that it is contraindication to the title to the property. No where on my title do I see the word "vota" written.

Voting rights cannot be suppressed through a simple majority assembly meeting: Voting rights can only be altered through an amendment of the Condo Rules, which, for these purposes would require the unanimous approval of all condo owners. Why not have the assembly meeting approve the registration of the liens against all delinquent owners' units? It is the only collection mechanism found in law 5038 and it has a much more "encouraging" effect.

 

[cavok]

Voting rights cannot be suppressed through a simple majority assembly meeting: Voting rights can only be altered through an amendment of the Condo Rules, which, for these purposes would require the unanimous approval of all condo owners. Why not have the assembly meeting approve the registration of the liens against all delinquent owners' units? It is the only collection mechanism found in law 5038 and it has a much more "encouraging" effect.

This is exactly what we did several years ago. Works like a charm. Liens were approved at the AGM and as soon as the delinquent owners received notice that liens were being filed - they paid up fast! Plus, owners now know we mean business. No more problems with delinquent owners since.