REAL ESTATE LAWSUIT ON VIOLATION OF LAW ON PROTECTED AREAS

http://www3.diariolibre.com/noticias_det.php?id=15109


REAL ESTATE LAWSUIT ON VIOLATION OF LAW ON PROTECTED AREAS.

May 6th, 2008.

Today journalist Niza Campos published an article in Diario Libre, one of the most respected newspapers and of higher circulation, on the subject of real estate investment in protected areas. This topic is very important for foreign investors, no matter whether they are small-scale investors as buyers of apartments or villas, or large investors such as construction companies or hotels.

The case.

According to the journalist, the scandal was unleashed with the claim that foreign investors through a Dominican company bought 35 million square meters located in the province of Higüey, one of the largest spots in tourism in the Dominican Republic. A portion of land like this one has a strategic and market value quite high. In the newspaper article it appears with a value in Dominican pesos that definitely must be much lower than the market value. Anyway, 100 billion Dominican pesos is a fairly substantial sum within the real estate market, whereas the supply of land with potential for investments in hotels or housing units is quite low, which definitely increases the demand and the impact on prices.

The conflict.

Journalist Niza Campos gives the account in her article that the State Attorney believes that the High Court of Lands (Tribunal Superior de Tierras) should override the decision of the Court of Original Jurisdiction (Tribunal de Jurisdicción Original) of Higüey, because the negotiations, through which there were purchased the 35 million square meters is illegal. In our judicial and real estate system the State Attorney is a special prosecutor, a defender of the civil rights and the State. His/Her role is defined in Article 12 of Law No. 51-07 of April 23rd, 2007, which amended Law No. 108-05, of March 23rde, 2005, on Real Estate Registry. Accordingly, this officer is responsible for bringing up the actions and prosecuting violators of the Law whom, according to his assertations, he is intended to indict before the criminal courts of the country. In any criminal proceedings the indicted parties could obviously be sentenced to imprisonment and fines as established by the Law on Environment and Natural Resources. However, it is not very clear about the mechanism whereby the State Attorney will initiate such prosecution because this function should be exercised by the Attorney General of the Republic according to the Law. Moreover, the evidence that, according to the State Attorney, he has for the case, which are written testimonies, is a means of evidence that it is discredited by the vulnerable witnesses of such proceedings, both in the case of any prosecution, as well of the parties involved on a private level if opting for this kind of evidence mechanism.

Under the terms of the Law, protected areas should be established by the State Secretariat of Environment and Natural Resources (Secretaría de Estado de Medio Ambiente y Recursos Naturales), which it is responsible according to the Law to administer these areas, to regulate the use of them, and everything that contributes to their preservation, according to article 6 of that Law.

Parque Nacional del Este (National Park of the East), which the majority of lands that are claimed allegedly belongs to the Dominican State, is considered as a protected area by this Law. Therefore, if this fact is proved in court, in this case the High Court of Lands (Tribunal Superior de Tierras), which is the appellate court or second instance court, because the Judge of Original Jurisdiction (Juez de Jurisdicción Original) of Higüey gave his verdict in first instance, the buyers would be violating Article 9 of the Law. This article is very precise regarding the fact that State land comprising the "national system of protected areas are imprescriptible (cannot be bought because they occupy the land) and inalienable, they cannot be bought.

Article 14 of this Law is devoted to the meaning of what are the national parks and nature reserves. As outlined in the article that appears on the lawsuit, Articles 25 and 33 of that law govern how those natural resources and areas can be used, and this is so with the corresponding authorizations and no objections from the State Secretariat of Tourism and the State Secretariat of Environment and Natural Resources.


In accordance with the newspaper article that it is been commented on, this agreement was made through a sales contract between the company Inversiones Trubia S.A. and Mr. Ignacio Coronado Ruiz. The company acquired the real estate property from Mr. Antonio Minaya Rodríguez. This newspaper article identifies other companies and individuals involved in the conflict. In our view, from a strictly legal standpoint, this is irrelevant, and the most important thing is that a consensual contract (signed and subscribed) at a time when a land has been declared as a protected area is a contract in which on the judiciary realm, according to the regulations of the Civil Law, would be voidable, because its purpose is illegal. In other words, something was bought that could not be in the market.

We hope to follow up on this interesting legal proceedings, and for sure this type of conflict will contribute to transparency and, above all, to help potential foreign investors to make a real due diligence at the time of investing in tourism lands in the Dominican Republic. We present the newspaper article in its entirety.

Freddy Miranda
freddymiranda.com
Translated by Orlando Alcántara