Security Over Property in the Dominican Republic

Real Property Security

In the Dominican Republic, a mortgage can be granted over real property to secure a loan. The lender and borrower must sign a notarized mortgage agreement, which must be registered with the Public Registry Office.

Key Requirements for Real Property Mortgage Agreements:

• The lender and borrower must sign a notarized mortgage agreement.
• The agreement must be registered with the Public Registry Office.
• The agreement must also be notified to the Ministry of Finance.

Security Over Financial Instruments and Cash

A pledge agreement is required to grant security over financial instruments such as certificates of deposit. For cash deposits, a separate security/pledge agreement (fiduciary cession) must be signed, and this agreement must be notified to the financial institution where the deposits are held.

Key Requirements for Security Over Financial Instruments:

• A pledge agreement must be signed between the parties.
• The original certificate of deposit and insurance policy certificate are required for registration.
• For cash deposits, a separate security/pledge agreement (fiduciary cession) must be signed.

Intellectual Property Rights Collateralization

Intellectual property rights can be collateralized through the execution of a pledge agreement and its registration with the National Office of Intellectual Property. The original certificate of registration of the corresponding IP right is required for registration.

Key Requirements for Security Over Intellectual Property:

• A pledge agreement must be signed between the parties.
• The original certificate of registration of the corresponding IP right is required for registration.

Enforcement of Security Interests

The common triggers for enforcement include failure to make timely payments, breach of contract, and foreclosure proceedings against any assets of the borrower. The process involves notice to the debtor through a bailiff’s act, a request for foreclosure of the assets granted as security, and the sale of the assets at a public auction.

Key Steps in Enforcement:

1. Notice to the debtor through a bailiff’s act.
2. A request for foreclosure of the assets granted as security.
3. The sale of the assets at a public auction.

Priority of Creditors in Insolvency

In case of insolvency, creditors rank in the following order: labour liabilities, costs and expenses originated by the reorganisation process, loans approved by the court and granted by financial intermediation entities or third parties for the financing of the debtor, credits of essential and public service providers or suppliers, duly authorised by the court, debts resulting from the execution of contracts that remain in force after the commencement of the reorganisation process, when approved by the court and the corresponding creditor agrees to deferred payment, and other liabilities, according to their priority (secured credits will prevail).

Key Priority Order for Creditors:

1. Labour liabilities
2. Costs and expenses originated by the reorganisation process
3. Loans approved by the court and granted by financial intermediation entities or third parties for the financing of the debtor
4. Credits of essential and public service providers or suppliers, duly authorised by the court
5. Debts resulting from the execution of contracts that remain in force after the commencement of the reorganisation process, when approved by the court and the corresponding creditor agrees to deferred payment
6. Other liabilities, according to their priority (secured credits will prevail)