Many developments are advertised as real estate projects with a trust, but a word in a brochure doesn't protect your money—the contract does, and you need to read it.
Buying into real estate projects with a trust means that your money does not go into the developer’s pocket, but rather into a separate trust fund administered by a trustee under Law 189-11. That trust fund is autonomous: it is not liable for the developer’s debts, and funds are released upon verified progress of the construction work. That is the real protection. What does not constitute protection is the seller simply mentioning the word “trust” in a presentation. The difference between the two is clarified with three documents and two inquiries—and this must be done before the reservation deposit is made, not after.
What exactly is a real estate trust?
Under this arrangement, the developer (the settlor) transfers the land and the project to an authorized trustee, who manages them for the benefit of the buyers until the units are delivered. By separating the assets, a garnishment or bankruptcy involving the developer does not affect the project.
A detailed explanation of how this arrangement works—including its components and stages—can be found in the article on real estate trusts in the Dominican Republic. This article focuses on something else: how to confirm that the project you’re considering actually has one.
What documents should I request?
| Document | What does this show? |
|---|---|
| Trust Agreement | That the trust exists and under what terms |
| Identification of the Trustee | Who manages it, and whether it is an authorized entity |
| Property Registration Certificate | That the land is registered in the name of the trust, not the developer |
| Buyer's Standard Contract | What rights do you acquire under the trust? |
| Schedule of Progress Payments | How and When the Money Is Released |
The decisive test is the third one. In real estate projects with properly established trusts, the land is registered in the trust’s name. If the certification states that the property is still in the developer’s name, the trust is not managing the asset, regardless of what the prospectus says.
How can you verify real estate projects with a trust without relying on the seller?
- Check the property's registration status in the Real Estate Registry. The complete procedure, including what to look for in the certificate, is explained in " Title Deed: How to Verify It."
- Confirm that the trust company is an entity authorized to act as such, and not a company created by the developer itself to give the appearance of such a structure.
- Check where your money is being transferred. The receiving account must be the trust's account. A personal account or the developer's operating account is a serious red flag.
- Review the conditions for the release of funds. A trust that disburses all the money up front provides significantly less protection than one that disburses funds upon receipt of certified progress reports.
- Check your Confotur status on the Confotur portal (MITUR). It's not the same thing, but it's another indicator of the formality of the business.
What happens if the project isn't completed?
It depends on what the contract says, which is why you need to read it first. A well-drafted contract specifies what happens to the payments, the timeframes, and the conditions under which they are refunded or used to complete the project with another contractor.
What a trust does not do is guarantee that the project will be completed on time or that market prices will rise. It ensures traceability and the separation of funds from personal assets—which is already a significant benefit—but it does not eliminate the risks associated with construction. Even in real estate projects with properly established trusts, a delay in delivery is still possible.
Does this apply only to installment purchases?
For the most part, yes, and that's where it matters. When you buy a finished property, you're paying for a unit that exists and that you can see. When you buy off-plan, you're paying for a promise, and the escrow account is what turns that promise into a verifiable arrangement.
The decision between the two options—each with its own advantages and risks—is whether to buy a pre-sale unit or a completed property, and the specific process of buying an off-plan apartment.
Warning Signs
- The developer may not appoint the trustee without consulting him.
- They won't provide the trust agreement "due to confidentiality."
- The land is still registered in the name of the development company.
- They are asking you to transfer funds to an account that is not the trust account.
- There is no disbursement schedule, or it is not linked to the progress of the work.
Any one of these five reasons justifies putting the transaction on hold until you've clarified the matter with your attorney. In well-structured real estate projects involving a trust, none of these questions cause anyone any concern: the answers are already in the documents.
Frequently Asked Questions
Are all real estate projects with a trust safe?
Not automatically. A trust is a protective structure, but its scope is determined by the contract. Two projects that use a trust may have very different levels of protection.
What law governs trusts in the Dominican Republic?
Law 189-11 on Mortgage Market Development and Trusts, which establishes the concept of and defines a separate estate.
Can I buy without a trust?
You can, but you're assuming that your money becomes part of the developer's assets and is subject to the same risks as the developer's other obligations. When buying off-plan, this is a different kind of risk.
Does the trust guarantee a return?
No. It safeguards the funds' destination during the construction project. Nothing more, and nothing less.
Who pays for the trust?
Their fee is part of the project's cost structure. It's a good idea to ask whether it's included in the price or billed separately.
Let's double-check this together before you sign
If you're evaluating a development and would like us to review the trust agreement and registration certificate with you before making any payment, please contact us. You can view our portfolio under " Projects" or contact us via the "Contact" page.