When investing in pre-construction real estate in the Dominican Republic, understanding the terms of your contract is crucial. Unfortunately, some contracts are heavily skewed in favor of developers, leaving buyers with little to no protection. These are known as one-sided contracts.

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A one-sided contract is an agreement that disproportionately favors one party—typically the developer—while providing minimal protection to the buyer. Given the active pre-construction real estate market in the Dominican Republic, buyers must carefully review their contracts to ensure they are not signing an agreement that leaves them vulnerable.

If you’re purchasing a pre-construction property, be on the lookout for these three red flags that indicate a one-sided contract:

1. No Penalties for Developer Breach
One of the most significant indicators of a one-sided contract is the absence of penalties for the developer in case they fail to meet their contractual obligations. A fair contract should hold both parties accountable, ensuring that if the developer breaches the agreement—such as failing to complete the property on time—they face financial or legal consequences.

If your contract does not include penalties for the developer’s non-compliance, this is a major warning sign that the contract is designed to protect only the developer.

2. No Buyer Termination Rights
Another common issue in one-sided contracts is that they do not provide buyers with a fair window to terminate the agreement if the developer fails to fulfill their obligations. This means that even if the developer does not meet the agreed-upon terms—such as delayed construction or failure to deliver promised amenities—you may have no legal recourse to exit the contract.

This lack of termination rights leaves buyers trapped in unfavorable situations, unable to reclaim their investment or seek alternative options.

3. Developer’s Right to Terminate Without Notice
Perhaps the most alarming clause found in one-sided contracts is the developer’s ability to terminate the agreement without giving the buyer any notice. This means the developer can cancel the contract at their discretion, potentially causing significant financial loss to the buyer.

This kind of clause is often hidden in the fine print or written in complex legal jargon, making it difficult for buyers to recognize its implications. Without careful legal review, buyers may unknowingly sign away their rights, leaving them at the mercy of the developer’s decisions.

If you notice any of these elements in your contract, you may be dealing with a one-sided agreement. To safeguard your investment:

• Always have a real estate attorney review the contract before signing. An expert lawyer can identify hidden clauses that may put you at risk.
• Don’t assume that all developers use fair contracts. While some developers operate ethically, others take advantage of vague or misleading contractual terms.
• Ensure that the contract includes penalties for developer breaches, reasonable termination clauses for buyers, and clear protections against unfair terminations.

Buying a pre-construction property is an exciting opportunity, but it also comes with risks—especially if you sign a contract that doesn’t protect your rights. Understanding the common elements of a one-sided contract can help you avoid costly mistakes and ensure that your investment is secure.

If you need legal advice or assistance in reviewing a pre-construction contract in the Dominican Republic, our team is here to help.

Contact us today for expert guidance and peace of mind throughout your property purchase journey.