Thursday, May 8, 2008

Superior Court of Lands Lawsuit on protected areas

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



May 6th, 2008.

Lands in the East on a lawsuit are protected area.
The High Court of Lands (Tribunal Superior de Tierras) will hear the case next Friday 30th at 10:00 A.M.

The lands, which have tourism potential, are worth more than RD$100 billion (Dominican pesos).

Santo Domingo. The scandal that was generated due to the sale of more than 35 million square meters in the tourist area of Higüey, and that led to a legal dispute, has taken a new direction, after it has been determined on a land inspection that they are within the protected area of National Park of the East (Parque Nacional del Este).

An inspection carried out by surveyors Enrique Arismendi and Ángel Manuel Hernández Ozuna reports that the transaction violates Article 33 of the Sector Law on Protected Areas (Ley Sectorial de Áreas Protegidas) No. 202-04, dated July 30th, 2004.

The lawsuit that involves Daniel Antonio Minaya Rodríguez, as owner of the lands, as well as Spaniard entrepreneurs Ignacio Coronado Ruiz, Carlos Sánchez, and Andrés Liétor Martínez, acquirers, will be held next Friday 30th at a hearing set for 10:00 A.M. at the High Court of Lands (Tribunal Superior de Tierras).

During the trial, the State Attorney for that jurisdiction, Fermín Casilla Minaya, will release the Surveying report (Mensura), which stipulates that the lands are a protected area, and other evidence to prove the illegality of the maneuver.

According to the legal file, the lands have a value that exceeds RD$100 billion (Dominican pesos) in the real estate market, and they are beaches that cannot be exploited by individuals because they are a Nature-reserved area.

"Once the High Court (Tribunal Superior) delivers its verdict, then we wil prosecute those who are involved in the case, whom we are very clear who they are," warned the State Attorney.

According to Article 33 of Law No. 202-04 "protected areas are inalienable patrimony of the State and, in that virtue, no one can enjoy or dispose of them, but as it is established in this Sector Law on Protected Areas (Ley Sectorial de Áreas Protegidas), its regulations and standards, as well as the existing provisions in the General Law on Environment and Natural Resources (Ley General sobre Medio Ambiente y Recursos Naturales) No. 64-00 from August 18th, 2000. "

According to Casilla Minaya, the High Court of Lands (Tribunal Superior de Tierras) will have no other alternative but to annul the first-degree verdict dictated by the judge of the original jurisdiction of Higüey, "and to return the property to the same position that it was before."

Contract.

The Spaniard Ignacio Coronado Ruiz acquired the property through a sales contract and the privilege of unpaid seller, dated November 2, 2005, by the sum of U.S.$19.8 million payable in three installments, on behalf of the company Inversiones Trubia, S. A. As a seller appears Daniel Antonio Minaya Rodríguez.

According to a certification from the General Directorate of Internal Taxes (Dirección General de Impuestos Internos), in the acquiring company are listed as shareholders Inversiones CCF, S. A., in addition to Coronado Ruiz, Carlos Sánchez Hernández, and Andrés Liétor Martínez. Coronado Ruiz is the president of the company, which has an authorized capital of RD$25,000 (Dominican pesos), and a subscribed and paid capital of RD$2,500, whose head office was registered in Avenida Independencia without number, in the sector of La Feria, National District (Distrito Nacional).

The sum of U.S.$19.8 million agreed to for the real estate property would be paid in installments of U.S.$6.6 million at the latest the first of August, 2006, a similar amount the first of November of that year, but never earlier than three months after the payment cited above. The remaining U.S.$6.6 million should be paid on the first day of October, 2006.

Minaya Rodriguez, seller, is listed as a transient resident on the street K No. 1, Preconca Nueva, La Romana, while Inversiones Trubia, S.A. is residing at Avenida Abraham Lincoln No. 403 at the corner of Avenida Bolívar.

The parties had a common agreement to set the selling price at U.S.$14 per square meter of land, which has a portion of one literal meter facing the sea per 1,060 linear meters of depth.

According to the contract of sale, that real estate property is located in an area suitable for the development of tourism projects and hotel infrastructures "and has no objection to the development of these ones within the parameters established by the National Parks Sector Law (Ley Sectorial de Parques Nacionales), established in the Law No. 202 of July 30th, 2004. "

Extension.

The lands in dispute are divided into the lots 6-006-837, 6-006-838, 6-006-839, 6-006-840, 6004-26982, 6-004-10866, and 6-005-49.

The area marked with the number 6-004-10866 covers an area of 154 hectares, 93 areas, 18 hundred-areas; lot 6004-26982 has 205 hectares, 25 areas, and 99.32 hundred-areas.

While the lot 6-005-49 covers an area allocated in the inspection of 1,562 hectares, 15 areas. All amount to 23 million 223 thousand 417 square meters.

The other inspection, which corresponds to the same lot, covers an area of 12 million 577 thousand square meters, completing the extension of 35 million 800 thousand 522 square meters.

Another case.

As for the lot marked with the number 6-004-10866, which covers an area of 154 hectares, according to the State Attorney, in that area it was planned to build a hotel of 40 plazas per hectare. The project would be built by Spaniard entrepreneurs Pablo Piñero Ibernon and Gustavo Montenegro, from Inversiones Coconut, S. A., whom the State Secretariat of Tourism gave the go-ahead with a "No Objection".

However, investors withdrew from the project unleashed by the scandal that it would be built in a protected area.

Into the criminal.

The State Attorney has announced that he has written testimony for use in its due opportunity in possible criminal proceedings.

He warned that several people will be prosecuted who has a great economic power, given that the case will move from the real estate law to the criminal law.

"The State Attorney can initiate prosecution in his own name because the Law establishes it that way, and therefore it is up to me," he said.

Without involvement.

During inspection done to the lands, Casilla Rodríguez argued that there were found no legislators involved in the case.

So far he said that only the names that have surfaced are the ones of those who have sought to get the lands allotted to them.

"In the process thus far there hasen’t been encountered the name of any legislator, or former legislator," he said.




By Niza Campos.

Freddy Miranda
freddymiranda.com
Translated by
Orlando Alcántara

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