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NYC Dominicans Targeted in Real Estate Scams Back Home

After a pandemic-era rise in Dominicans in the U.S. buying properties back home, fear of getting scammed has them thinking twice. A Dominican bank is trying to win back trust.

One weekend in late March, thousands of Dominicans from across the city gathered at the Radio Tower and Hotel in Washington Heights. Banreservas, the largest state-owned bank in the Dominican Republic, was hosting its first real estate fair in New York City. Its mission: to alleviate concerns about scams endured by Dominicans investing in their homeland. 

“The point of this fair is to see each other face to face — it’s a need that arose from real estate discussions on scandals around deceit and swindling,” Gary Tavárez, a broker at Tu Casa RD, said in Spanish. 

Dozens of Dominican real estate companies flew in for the multi-day fair in Washington Heights, New York’s “Little Dominican Republic,” and another fair in Lawrence, Massachusetts, which also has a large Dominican diaspora. Some of the largest contractors were in attendance, and all had been vetted by Banreservas, bank staffers told Epicenter NYC. 

In recent years, there’s been a rise in U.S.-based Dominicans investing in property in the Dominican Republic. Pandemic stimulus checks gave many working-class Dominican families an unprecedented source of savings, helping them to achieve their dream of owning a home in Quisqueya (a Taíno Indian name for the island of Hispaniola). Property ownership could also mean supplemental income through long-term or short-term rentals in a nation whose recovery from the Covid-19 pandemic rested largely on the tourism industry

But recently, Dominicans in the city have been cautious about investing. Claims on social media of real estate fraud, and news of a crackdown of a real estate fraud network, have raised fears around scamming. 

What real estate scandals? 

A group of people accused of scamming were arrested in January in an operation known as “Operation Nest.” It uncovered a real estate fraud network in Santo Domingo affecting hundreds of people in D.R. and the U.S. 

A 400-page court document revealed just how deep the deceit went. Those charged targeted Dominicans abroad because they were less likely to see that nothing was being built, according to Dominican news outlets.

They sold more than 300 apartments or other projects that they didn’t have a construction permit for, according to the court filing. In some cases, they didn’t even own the land. The accused would sell the same apartment units — at times nonexistent units and projects — to different people, according to the filing. 

According to the Public Ministry, or the Attorney General’s Office, of the Dominican Republic, the defendants used lawyers and accountants to give the appearance of legitimacy. They manipulated images, showing the alleged scammers turning the keys over to victims. According to the court filing, they would threaten any victims who complained about noncompliance. They would intimidate victims by pretending to have high-level contacts in and outside the justice department. 

News reports from well-known journalists like Ramón Tolentino have shown how prevalent these types of scams are. 

And fair attendees like Miguel Cleto, who lives in Jamaica, Queens, say they have heard about incidents of real estate fraud through YouTube testimonials and warnings over WhatsApp from family and friends in both New York and the D.R. Cleto reported seeing a small group of people outside the Radio Tower and Hotel, the Banreservas fair venue, warning visitors about fraud earlier that day. 

“You have to really check things out and know what you’re getting into 100 percent,” Cleto said in Spanish.

“Families who have been conned have made a lot of noise about this issue,” Juan Chalas, a broker and co-founder of the Dominican real estate company Plusval, said in Spanish. 

“And that worries people, because in the end, the bad stuff is overpowering,” he said. “[Fraud] might happen just 0.01 percent of the time, but that 0.01 percent makes a noise that engulfs everyone and makes them think everybody’s a scammer. And that’s not how it is.” 

What are contractors doing to win local Dominicans’ trust?

Cleto had been hoping to open an account with Banreservas that Sunday (the bank, located next door to the hotel, was open for special hours during the event). He says learning a trust could mediate property loan agreements — and that a trusted bank was vouching for contractors at the event — is a game changer. 

So is a real estate company building a client relationship based on transparency, says Chalas, the Plusval broker. This is especially true for those whose raised antennas can’t reach the homeland. Since Dominican New Yorkers can’t exactly go check out their potential investment during lunch breaks, digital updates can go a long way, says Chalas.    

“When you can offer clients that post-sale and post-closing service, make them aware that the project is progressing, send them proof — because if you are out [of the country], you can’t just go check out the property every day — you make people feel more secure,” he said.  

Banreservas bank was open the weekend of March 23-24 for special hours during its real estate fair. Credit: Ambar Castillo

The Dominican American dream 

Dominicans in Quisqueya and the diaspora make up about 90% of Plusval’s clients, Chalas says. Besides the emotional and familial ties to the region, Dominicans, unlike many tourists, know the country is much more than the beachy towns featured in tourist packages. 

Also Read: Resources To Protect Yourself From Scams and Misinformation

While owning property in New York City is often unattainable for the average Dominican working family, their wallets go a lot further in the D.R. 

“If they have 250,000 dollars in the bank and go, ‘I have to invest it,’ they think, ‘where can I put it?’” Chalas said. “They go, ‘I don’t have real estate opportunities here, because houses cost a million dollars, a million and a half, whereas if I invest there, it’s more affordable, I know it, it’s my land,’ … there are many factors.”

Among the top spots where they’re buying property: the capital, Santo Domingo Oeste, Santiago, and cities like Puerto Plata and Punta Cana, which are best known for their beaches.  

“It’s natural for you, when you’re here in a country that is not your own, living a life where you’re very cold, to want the warmth of your homeland,” Chalas said. “Dominicans always hold that hope of returning to their island and retiring there.”

Some strategies to protect yourself from fraud (from Dominican real estate and financialexperts): 

  • Verify: Always go directly to the construction company in person and make sure that the project has financing from formal banks or a trust. Verify with the bank that the construction company is reputable. 
  • Titling: If it’s a finished property, go to the title registry or property/deed record and verify that it’s legitimate. Also ensure it’s not under the name of anyone other than the representative you’re dealing with. 
  • Trust: Take care with the person you appoint to process the purchase, even if it’s a family member or friend.
  • Ask questions: As a client, you have the right to ask questions and verify everything about the property.
  • Legality: Do not transfer payments without first having the required verifications and guarantees. 

This article originally appeared in Epicenter NYC, a member of the URL Media network

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