Politics in the Dominican Republic

When I mention that I am invested in real estate in the Dominican Republic, the first question I am usually asked is "what is the political climate there?". I think this is one of the biggest concerns most people have about investing internationally.

Recently, I-REIF's contributing writers were discussing eminent domain, the right for a government to buy or nationalize private property for public use. We were discussing how the fear of losing property to a foreign government is one of the reasons that investors might shy away from investing in an international market, even if the profit potential is extraordinary.

Janet Fish, who is currently developing two large resort real estate projects in the Cabo San Lucas area in Mexico stated "Let's not pretend eminent domain does not exist in the United States." Good point, Janet.

Another interesting topic of discussion was whether or not title insurance provides any protection against nationalization of private property. The answer is no. Title insurance only promises clear title at the time of purchase; it does not protect against the future as home owner's or car insurance does.

With that said, we all agree that exploring the political climate is an important part of due diligence when considering any real estate investment, domestic or international.

When I started investigating the Dominican Republic, I learned that the DR is a politically stable, free and democratic nation. I discovered that most people who know the Dominican Republic, believe that the stability of the DR government, combined with its close relationship with the United States make it a pretty safe bet as far as real estate investment.

The President of the Dominican Republic, Dr. Leonel Fernandez, served as President from 1996 to 2000, was elected with a large majority vote to a second term in 2004 and is up for re-election in 2008. On our last trip to the DR, I asked many Dominicans about their view of the upcoming election. Based on my casual polling, it seems Dr. Fernandez will very likely be re-elected.

Dr. Fernandez's political agenda has been one of economic and judicial reform and technological development. His administration has been recognized for its respect for human rights and civil liberties and for the economic growth that has occurred during both of his terms. A professor since 1979, Fernandez has lectured at numerous universities, including Yale, and has authored several books and numerous articles about politics, economics, communication, history and law.

Personally, I'm comfortable with the political climate in the Dominican Republic as it relates to my personal investments as well as developing real estate there in the future.