Real Estate Closings in Colombia

WHEN YOU SELL YOUR PROPERTY, DO NOT FORGET…

Usually people do not realize that when they sell their property their role is not limited to receiving their payment, delivering the property and signing the deed. Although the major risk in a real estate transaction is carried by the buyer, there are several aspects that the seller should take into consideration to avoid unexpected and undesirable situations. Here are some thoughts to aid you with your real estate closings in Colombia.

The happy end of the transaction starts with a careful reading and understanding of the contract of promise of sale, if there was one, and most of the time the closing is preceded by the promise of sale (promesa de compraventa).

The contract of the promise of sale is a formal document that contains binding statements for both, seller and buyer.  There is a lot to note from the buyer´s perspective, but this document is addressed to help the seller to understand his / her role and the obligations and consequences that often are involved in this kind of business.

The job starts with a complete reading of the promise of sale and identifies what are the seller´s obligations.  The other aspects of the sale are not written in the contract of promise of sale.

Below the reader will find a series of points that they might want to recall during the selling process:

• You are responsible for what you are selling and Colombian law offers to the buyer the legal tools to claim, get reparation and compensation if information is withheld that could affect a sale.  If you know that your property has some type of important problems like mold, water leaks, roof damage, etc., it is better to be clear with the potential buyer and take the situation into account during the negotiation.  Non disclosure is not an acceptable course of action to take.  After the seller has reached an agreement with the buyer, make certain to include those considerations in the contract; this  way the buyer will not be able to argue against the seller that these problems were “hidden defects”.

• When selling used properties, with or without furniture, you also might want to include in the contract the fact that the assets are used, therefore the buyer should be aware that used things do not work like new things or that at some point will need reparations.

•  When you sell or buy a real estate property, it is understood that the utilities like electricity and gas are included.  It is not the same with  services such as TV, internet and telephone.  This is a common mistake that people make.   If you did not include in the deal your connection to TV, internet and telephone, the supplier of these services will continue billing you and only the seller is responsible for the payments.  If you did not cancel them it is possible that you will never know, but your debt will continue growing and later you may receive some nasty surprises. If you included within the deal the TV, internet and telephone connection, make sure that your name is changed to the buyer´s name.  This is the other common mistake that seller usually makes.  If you do not change the name, you will have the same problem as if you had not changed it.  The best decision would be to cancel those services before you sell the property.

• Be aware that the sale is legally completed when it is duly registered in the Public Registration Office, which is the entity in Colombia that records the history or tradition of the real estate properties.  Virtually no sellers check to ensure that the property is no longer in their  name. It is important to be certain that the property title has been changed to the buyer’s name or you as the seller will continue to bear the responsibilities of the property. The seller should send the notice of the transfer of the property title to the administration of the building, in order for them to register the new owner and issue the statements in the new owner’s name. This is important to free yourself of any kind of responsibility in relation to the property that you have just sold.

When you sell your property, do not forget to close every possibility that might cause you to continue bearing any kind of responsibility to this sale.