When dealing with a Colombian Real Estate Purchase agreement (called a Promesa de compraventa) several specific issues keep coming up which take foreign home purchasers by surprise and which any potential homebuyer should be aware of. These include:

Vague Contracts with no fixed deadlines

A reoccurring problem in Colombian real estate sales are Promesas de compraventa that do not include fixed deadlines for key events to occur. These contracts instead just lay out vague steps in the process, i.e.:

• Deposit of 25,000,000 to be paid by Purchaser to Seller

• Mortgage Lien against property to be paid by Seller

Instead of:

• Purchaser to pay a Deposit of 25,000,000 COP to Seller by June 1, 2023, to be deposited in Bancolombia bank account #XXXXXXXXX

• Mortgage Lien against Property, held by Davivienda Bank, Account # XXXXXXXXXX, to be paid by Seller by June 30, 2023

These vaguely-worded contracts are generally the result of overeager real estate agents who want to lock down the sale by getting both parties to sign as quickly as possible. So, working off of a general template contract, they only fill in the information that is known, and assume the rest can be figured out as the transaction goes along.

This, of course, can lead to a number of problems as the transaction progresses, including either party choosing to stall the process when it is to their own benefit, one party holding it hostage to try and extract concessions from the other party, or even just simple misunderstandings as to what was actually agreed to.

With a fixed deadline set in the contract, it is easy to point out the transgression and remedy it in court, i.e. the contract says turnover of the property was August 1, 2023. They have not turned over the property. I want the property and damages for the time they kept the property.

With no fixed written deadline, it would be your word against the other party’s as to when the turnover was to occur, or, barring that, an argument over what considered a “reasonable time” to turnover a property considering all factors, all of which will make it more difficult and costly to enforce.

Fixtures and Appliances

Many foreign buyers have been taken by surprise when they arrive at their newly purchased Colombian property and find that the place has been gutted of everything that is not bolted to the walls. Lightbulbs, stoves, curtains (even if they are custom-made for the particular property), showerheads, refrigerators, and many other items a foreign buyer may take for granted as belonging to the property, and therefore transferring in the sale, may not transfer with your purchase unless the items are specifically written into the Promesa de Compraventa. It important that you address this issue of fixtures and appliances with the other party and have the Promesa de Compraventa include a list of the items that will transfer so there are no surprises on your move-in day.

The Promesa de Compraventa will not be translated

Colombia is a Spanish-speaking country so it is not a surprise that the original real estate contracts for property purchases will be in Spanish. What does surprise some foreign purchasers, especially those buying luxury properties, is that nobody, including their own dedicated real estate agent, will translate any of the documents they are expected to sign into a language they can read, even if all the negotiations have been in English. There is no legal obligation in Colombia for a translation to be provided to make the signed contract enforceable and real estate agents will tell you that translations are not part of their services. At Restrepo Legal we make sure you understand any and all documents before you sign.

Non-compliance with the contract penalties

The standard damages for non-compliance with the contract is the amount of the deposit (downpayment). If the buyer backs out of the purchase, they forfeit the deposit. If the seller backs out, they are expected to return the deposit and pay its equivalent amount as a penalty to the buyer.

The question of unenforceability often arises in these cases though, especially if the seller seems to be cash poor. Foreign buyers especially are not interested in suing a Colombian in civil court to recover this penalty and would just rather have the property transfer to go through.

The solution is to write an enforcement of sale clause into the Promesa de compraventa which you can later use to force the sale through in an special, expedited legal proceeding in case the seller attempts to back out with no legitimate reason i.e. they found someone who will pay more at the last minute.

At Restrepo Legal, we can help you through every step of your property purchase to make sure it is problem free. From title searches to the drafting of a real estate contract, from fund transfers to the handing over of the keys, we will help you protect your investment and make sure you will be able to enjoy it for years to come. Contact us now if you want peace of mind regarding your real estate purchase in Colombia.