Guide to Apartment Rental Contracts in Colombia - Medellin Living

Guide to Apartment Rental Contracts in Colombia

November 18, 2015 By Jeff

I have lived in unfurnished rental apartments in Medellín for almost five years and have signed seven different apartment rental contracts. The rental contracts I have signed have been for terms of either six-months or one-year.
I’ve seen several blog posts and communications from real estate firms and foreigners in Colombia that have included some inaccuracies about the rental laws in Colombia, which drove me to write this guide to apartment rental contracts in Colombia.
Colombia’s Law 820 of 2003 governs renting unfurnished apartments in Colombia.
This law spells out regulations for landlords and tenants and has many specific requirements that are not well-known by many foreigners renting apartments or looking to rent apartments in Colombia.

Typical Apartment Rental Contracts

A standard unfurnished apartment rental contract in Colombia includes the following sections:

• Name and identification of the parties.
• Identification of the property under contract.
• Identification of the property that is leased, as well as areas shared with the other occupants of the building.
• Price and payment location.
• Term of the contract.
• Appointment of who is responsible for payment of public services (electric, gas and water) of the property under contract (normally the tenant)
• Many other terms based on Law 820, such as early termination and renewals.

While apartment rental contracts can legally be verbal, it is highly recommended that you get a written contract that is signed and notarized. All the rental contracts I have signed in Colombia have been in Spanish and notarized.
You don’t need a cedula (Colombian ID) or visa to rent an unfurnished apartment in Colombia; a passport is all that is needed. My first unfurnished apartment rentals in Medellín were accomplished using my passport.
This link includes some template rental contracts for Colombia (in Spanish) in Word format.

Apartment buildings in El Poblado near Santafé mall

Unfurnished Apartment Rental Laws in Colombia

Colombian Law 820 of 2003 spells out many requirements and regulations for unfurnished apartment rentals in Colombia. I have found that many Colombians don’t know about all these regulations.
Highlights of the apartment rental regulations found in the law in Colombia include:
1. Tenant must pay rent and services on time – Rent must be paid in a timely manner and any services such as electricity, gas and water according to the provisions of the contract must be paid in a timely manner (make sure to keep receipts).
2. Monthly rent price is limited – monthly rent for an apartment cannot exceed 1 percent of the commercial value of a dwelling or the part of a dwelling subject to the lease.
3. Rent increases are limited to inflation – there can be an increase in the rent every 12 months. The increase cannot exceed 100 percent of the inflation increase (Consumer Price Index) for the immediately preceding calendar year.
However, I haven’t experienced a rent increase in four different renewals and, in fact, I was able to negotiate a lower rental price for one renewal.
If the tenant believes that the increase made by the landlord exceeds inflation, the tenant reportedly has six months to request a revision with the Mayor’s Office of the city where the dwelling is located.
4. There is a penalty for early termination – For a tenant or landlord to end a lease early, at least three months written notice must typically be given and there is usually a penalty (indemnification), which is usually equal to three months rent required.
Because of this pretty stiff penalty, apartment leases in Colombia are rarely terminated early.
5. Landlords can only terminate leases for particular reasons – Landlords are limited in the reasons they can end a lease, which include:
Unilaterally:

• If the tenant is not complying with obligations, such as defaulting in rent payments or public utilities payments.
• If the tenant is subletting the apartment or part of the apartment without the consent of the landlord.
• If the tenant made improvements to the property without the consent of the landlord or the total or partial destruction of the property.
• If the rented property is being used for criminal acts recorded by the police.

With three months notice and payment of a penalty equal to three months rent:

• When the owner of the property needs to occupy their property, for not less than one year.
• When the property is to be demolished to build a new building, or when required to vacate to do repairs.
• If the owner has sold the property.

The landlord can also terminate a contract if it has lasted not less than four years, by paying a penalty equal to 1.5 months of rent.
I have experienced two owners that wanted their apartments back early because they wanted to live in their apartment I was renting. The first was leased from a woman living in Bogotá who was returning to live in Medellín.
I agreed to this early lease termination as I was already planning to move. She negotiated with me and ended up paying me two months rent for terminating early.
The second I experienced a landlord wanting his apartment back early was because he had sold the property he was living in and wanted to live in the apartment I was leasing.
I pushed back since I had six months remaining on my lease and the landlord didn’t want to pay me three months of rent to terminate the contract early, so he waited until the lease was up.
6. Deposits are not permitted – Deposits are not really allowed as part of apartment lease agreements in Colombia. However, such guarantees may be established either indirectly or through an intermediary such as an insurance company.
This is one of the reasons why real estate agents in Colombia typically require one or more fiadors (cosigners with property) for apartment rentals. However, this fiador requirement can be overcome.
I have heard some foreigners have paid deposits as part of unfurnished apartment leases in Colombia, but I haven’t paid a deposit for any of my unfurnished apartment leases.
7. Leases automatically renew – Unless either the tenant or landlord sends a written notice of termination at least three months before the lease end date, an apartment lease contract in Colombia will be renewed automatically.
The lease renewal will be for the same terms if both parties have complied with their contractual obligations and the tenant accepts any rent increases.  So if you are not planning to renew an apartment rental in Colombia, make sure to send written notice of termination at least three months before the lease end date
Note that tenancy law is enforced before the civil courts in Colombia. Procedures are long, and the courts are saturated with an enormous backlog of cases so I have heard landlords evicting a deadbeat tenant can take a long time – up to a year or more.
Law 820 regulates the eviction process in Colombia, and procedural rules are found in the Colombian Code of Civil Procedure. The eviction process is called “Proceso de restitución de inmueble arrendado.”
The eviction process taking a long time in Colombia is another reason real estate agents require fiadors for unfurnished apartment rentals.

Kitchen inside my current apartment

The Bottom Line

Rental laws in Colombia are fairly favorable to renters with rent increases limited by law to inflation, and there are clearly defined rules for terminating leases early.
Before you rent an unfurnished apartment in Colombia, make sure you understand the above rental laws and information about apartment rental contracts, so real estate agents or others do not mislead you.
If you want to rent an unfurnished apartment, most are leased through Colombian real estate agents. Few agents speak much English, so some Spanish is required.
Most agents will require a fiador (cosigner), but this can be avoided by paying rent in advance as I have done for five years of unfurnished apartment rentals in Medellín.
Some foreigners have had success in bypassing real estate agents and searching for and renting directly from an owner and avoiding the fiador requirement.
But this can be challenging and is a numbers game, it may be a 1 out of 50 chance situation and severely limits your apartment choice. I prefer to use my real estate agent, and I can rent most available properties as there aren’t many exclusive listings in Colombia.
Another way to avoid the fiador requirement is to use an insurance company like Mapfre. But they will only rate your safety as a tenant by looking at any economic activity you have inside Colombia, so you have to be established in Colombia.
Unfortunately, the foreign-owned real estate firms in Colombia don’t really provide rental services for unfurnished apartments to my knowledge.
This is likely due to the commission for unfurnished apartment rentals being fairly low (typically 8-10 percent of rent) and foreigners requiring too much hand-holding.
Foreign-owned real estate agencies would rather deal with property sales where the commissions are 3 percent of the selling price or deal with rentals of furnished apartments that don’t fall under the rules for unfurnished rentals.