Real estate trusts (fideicomiso) in Santo Domingo: how they protect pre-construction buyers

What a real estate trust is

Law 189-11, on the development of the mortgage market and trusts, defines it as the act by which one or more people transfer assets or rights to a legal entity, the trust company, to form a separate estate. The trust company manages it following the instructions of whoever created it and for the benefit of the beneficiaries (art. 3). The law says it can be used to boost the real estate market (art. 4).

The type used for construction is the real estate development trust (art. 58). Under Regulation 95-12, the trust company handles the project through design, construction, sale or rental, for the benefit of the beneficiaries (art. 20).

The general side of buying pre-construction, like payment plans, permits and the contract, is in how to buy pre-construction safely. This guide covers only the trust.

The parties

• The settlor (fideicomitente). Whoever hands over the assets: usually the landowner or the developer (art. 21). The law lets others join later as adhering settlors, if the deed allows it (art. 13).
• The trust company (fiduciaria). The legal entity that receives and manages the assets (art. 24). It can't keep them: the law bans trusts in which the trust company acquires them for good (art. 51).
• The beneficiary (fideicomisario). The person for whom the assets are managed (art. 40). In a pre-construction project, that's usually where the buyers are.

Why it protects pre-construction buyers

1. It's a separate estate. The trust's assets don't mix with the developer's, the trust company's, or those of other trusts it manages (art. 7).
2. The creditors of the developer or the trust company can't seize it (art. 9). The exception is debts of the developer from before the trust that already had a lien on those assets, which the deed must declare.
3. It's tied to its purpose. The assets only answer for what the trust company does to fulfill the trust's purpose (art. 8). What you pay goes to the project, not to the developer's other projects.
4. The trust company reports. In a real estate development trust, the report must show, among other things, the percentage of work done, the estimated delivery date, budget control and how the project is being financed, with loans and contributions (Regulation 95-12, art. 37). If the deed doesn't say how often, it's every six months (art. 38).

One detail to watch: the trust's assets do answer for the trust's own debts, such as a loan the trust company took out for construction, and also if it was set up to defraud third parties (art. 10). That's why it matters who finances construction.

Who can be a trust company and who supervises it

Under article 25 of Law 189-11, only these can:

• Trust companies whose sole purpose is acting as trustee. If they're not part of a financial group, the DGII (the tax authority) supervises them.
• Multiple-service banks, savings and loan associations and other financial institutions authorized by the Monetary Board. The Superintendency of Banks supervises them. Each trust they create is sent to the Superintendency for registration (Regulation 95-12, art. 5).
• Investment fund managers and securities brokers, only for the funds and portfolios they manage. The Securities Market Superintendency supervises them; Law 189-11 still calls it the Superintendency of Securities.

That split of supervision is the one in the DGII's Guide 27. Since March 2025, Circular CSB-REG-202500005 from the Superintendency of Banks requires trust companies of banks and banking groups to give their clients the current trust deed and a summary sheet. The sheet names the parties, the assets in the trust, what it was created for, its term and the rights and duties of the trust company and the settlor. The same circular asks them to make sure the developer tells buyers what matters before they buy.

According to the Superintendency of Banks, as of June 30, 2025 there were 766 real estate trusts at the trust companies it supervises, with RD$163,134 million under management.

Where it's recorded and how to verify it exists

A trust is created in writing, before a notary or with signatures certified by a notary. A verbal one is void (art. 12). It then leaves a trail in three places:

1. The Commercial Registry of the Chamber of Commerce where the trust company is based. The deed and every change are recorded there (art. 17), and the trust is valid against third parties from that recording (art. 18).
2. The Title Registry. The land passes to the trust once the change of owner is recorded in its registry (art. 19), and for real estate that registry is the title registry.
3. The DGII. Each trust has its own tax ID, or RNC (art. 48). To issue it, the DGII asks for the contract recorded at the Chamber of Commerce and the title certificates of the properties contributed.

To check it yourself:

• Ask the developer for the trust company's name and call the trust company yourself. Don't rely only on the number they give you.
• Ask for the trust deed recorded in the Commercial Registry and the summary sheet.
• Look up the trust's RNC in the "RNC Contribuyentes" search on the DGII website.
• Ask for the certification of legal status of the land: it must show it's in the trust company's name, for the trust, and whether it has mortgages.
• Check in the deed that you, as a buyer, are or will be a beneficiary, and what rights it gives you over your unit.

What the buyer signs

The law doesn't set a single document. The deed can set the terms for someone to join as an adhering settlor (art. 13), and each trust says how buyers come in. For low-cost housing, the DGII refers to the promise of sale and the final purchase contract.

Before signing, check that the contract names the trust and its trust company, says which account you pay into and that the account belongs to the trust. If the project has a trust, the payment goes there, never to a person.

What happens if construction stops

The trust ends, among other causes, if its purpose becomes impossible, or if the trust company goes bankrupt and no replacement is named within the deed's deadline or, if it sets none, within a year (art. 52). When it ends, the trust company hands the assets to whoever the deed names. If the deed says nothing, they go back to the settlor (art. 54).

So what you get back depends on what the deed and your contract say. Read them before paying and look for what happens to what you paid if the project isn't finished.

Meanwhile, as a beneficiary you can demand an accounting if the deed provides for it, ask for the trust company to be replaced, sue it for its liability and challenge acts done negligently or in bad faith, asking for the assets that left that way to return to the trust (art. 43). If the trust company won't report, you can demand it through the Superintendency of Banks, the Securities Market Superintendency or the DGII, depending on who supervises it (Regulation 95-12, art. 38).

Taxes

• Creating, changing or ending the trust, and recording it, are tax-exempt. The Commercial Registry charges the Chamber of Commerce's flat fee (art. 45).
• The trust doesn't pay income tax, but it files an informational return every year. It does file the ITBIS (VAT) and pays the real estate transfer tax and the property tax (IPI), according to the DGII's Guide 27.
• The low-cost housing bonus is only given in projects built in a trust, and the trust company applies for it: see the first-home bonus.

Ask the trust company in writing, before signing, what you pay when you receive your unit. The costs of a purchase are in closing costs.

And if the project has no trust

Not every project has one, and it isn't the only guarantee. What you pay can also be protected by an escrow account, where a third party holds the money and releases it as construction advances, or by a surety bond in your name. What matters is that the guarantee exists and that you, or whoever represents you, verify it, not the word "fideicomiso" in a brochure. We explain it in how to buy pre-construction safely.

If you're looking at areas in the capital, see buying in Santo Domingo. And if you're looking elsewhere, buying in Cap Cana.

Buying with a trust through Instadigs

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