LEASE A PROPERTY
HOW TO LEASE A PROPERTY SAFELY AND AVOID FUTURE PROBLEMS

How to lease a property safely and avoid future problems

According to the Bogota Real Estate Exchange, about 35 percent of Colombians live in rent, which represents an approximate figure of 17 million people.

When making the decision to lease a property that is our property, several doubts arise. That is why at Metrocuadrado we spoke with David Felipe Morales, consulting attorney, to clarify the doubts that arise around this issue.

Policy and lease

The main thing that we must take into account, as owners of a property, is to ensure this rental process with a policy.

“This will guarantee that in the event of a breach of the lease contract with the lessee, this can be covered with the insurance policy,” Morales explained.

Regarding the contract, we must ensure that it is specified who the parties are who sign the document, what they commit to with respect to the rental property, what payment term the tenant will have and the assigned value of the rental fees.

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Morales highlighted the importance of determining in the contract the co-tenants who would be responsible for covering the payments if the tenant defaults.

Leasing a property directly or with a real estate agency?

The expert assures that the main thing is to be clear that we cannot risk leasing our property without a guarantee, which in this case would be the insurance policy.

“Generally, real estate companies work with insurance companies, so the property is supported there, so it would be a good option. However, as the owner of the property, I can save the link with the real estate and simply secure myself with the policy to lease directly,”Morales clarified.

As the owner of a property that I have leased, what can I legally do if the person incurs a default due to non-payment and also delivers it without paying the permanence clause due to lack of economic resources?

A: The policy will be in charge of paying the owner the value of the fees owed and, in addition, this insurance will be the one that leads the process of eviction from the property by this tenant who breached the contract. That is why the importance in always ensuring my property with a policy.

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If there is damage to the property, who should respond?

A: This type of damage is not stipulated in the policy. We must bear in mind that the contract always establishes a clause that says that the property must be delivered in the same conditions in which it was delivered. The owner should not receive the property until this is done. If the tenant does not respond then they will be the co-tenants, hence the importance of the clauses of the contract.

What are the reasons why I can terminate the contract with the tenant?

1. Failure to pay the lease fee

2. Change in the destination of the use of the property, that is, if I rent an apartment for housing, the tenants could not use it as a commercial premise or vice versa. This should always be stipulated in the contract.

3. If the property is destined for illegal activities.

Increase in rental value in times of pandemic

Finally, the lawyer explained that legally there are no restrictions to raise the rental fee, except that the maximum value is strictly tied to the IPC of the immediately previous year. Then it can go up clearly. “But we must take into account the context we are living in and reach agreements with the tenant so that no one is affected in this situation,” Morales concluded.

According to Fedelonjas, between 15% and 20% of the rental contracts had an agreement after the pandemic.

RENTAL PRICE OF A PROPERTY
HOW TO DECIDE THE RENTAL PRICE OF A PROPERTY

How to decide the rental price of a property

Assigning a rental value to a home, office or premises that does not correspond to the market implies risks such as reducing profitability, delaying the closing of a business or worse, never getting a customer. Hence, the importance of this task for which metrocuadrado.com will prepare the following guide.

The ideal is to hire the services of a professional appraiser to determine the rental price and obtain advice on the matter. However, if the owners decide to do it on their own, they must follow the following steps (knowing in advance that by law the canon should not be greater than 1 percent of the commercial price of the house and that in other types of properties there is no stop).

1. Make a form in which you list these data (apply those that correspond to your property)

  • Property type
  • Vetustez (years of construction)
  • Area
  • Stratum
  • The floor where it is
  • Number of bathrooms
  • Number of parking spaces
  • Smart building (offices)
  • Height (cellar)
  • Number of phone lines
  • Conservation status *: a. Excellent, b. Well, c. Regular, d. Bad, e. Terrible (See detail in the footer)
  • Lease price
  • Observations

2. Call to find out about the properties that are for rent in the same area as yours. Ask for all the information on your return and write them carefully.

3. For this task, take into account the properties to which notices are posted on the windows, also those that are published in newspaper classifieds and on metrocuadrado.com and, as far as possible, those that are consigned in a real estate.

4. For your circle to be the closest to reality, the sample taken should not be less than 20 properties.

5. Next, start sorting the properties and select those that have the most similar characteristics to yours.

6. Divide the price of each one by its area and you will get the value per square meter.

7. Then add the prices obtained and divide them by the number of properties used in this exercise.

8. The result obtained will serve as a reference to decide the rental price of your property.

However, the value obtained does not necessarily have to be the one initially requested, since it is important to have a negotiation margin. It is recommended, then, that the base price is 10 above what is expected.

The value of the insurance that may be applicable, in the event that you decide to use them, are additional to the rental value of the property and as such must be clearly specified in the respective contract.

Keep in mind that if you want to lease your property to a bank, government or multinational entity, among others, they may require a professional appraisal, which determines for sure the replacement value and the real -current- price of the good you want. To lease. Professional appraisers take into account all the circumstances that may affect the property such as life span, physical deterioration, and the purpose of the appraisal.

State of conservation of a property. How to rate it?

To. Excellent: Like new. It does not need repairs; paint, bathrooms, floors, kitchen, closets and finishes are in perfect condition.

b. Good: Although it does not require remodelling, minor repairs should be made in paint, electrical outlets, switches, bathrooms, flooring, or other finishes.

c. Fair: Habitable, but requires major repairs to panelling and paint, floors, closets, and/or kitchens.

d. Bad: Not immediately habitable. You have problems with humidity, leaks and the functioning of bathrooms, kitchens and/or laundry rooms.

And. Terrible: Not habitable. Repairs of all kinds must be made: structure, humidity, leaks, networks and/or utility connections.

UNIVERSITY RESIDENCE
HOW TO CHOOSE A UNIVERSITY RESIDENCE

How to choose a university residence

The process of finding the perfect student accommodation can be overwhelming, both for someone who is about to enter college and for those who are looking for better housing options. For this reason, we collect some important aspects when looking for a university residence so that when you start your search, you are clear about what you need.

Location

Location is, hands down, one of the most important aspects of student accommodation. No matter how perfect the home is, it will not be so if you have to spend a lot of time moving from the residence hall to the university and vice versa.

Places near the university are usually the most expensive options. If your budget is limited, research the best public transport connections to see how you could save money. Also consider its proximity to shops, medical centres, and entertainment venues when visiting potential accommodations. Having these services nearby will make your day to day easier

Good internet connection

With a good Wi-Fi___33 network in your accommodation, you will save yourself having to live forever in your university library. Who doesn’t prefer to work from their very comfortable bed? So ask if what you are going to pay includes this service or if you have to pay for it separately. And if it does, ask if there are any usage restrictions or if it’s unlimited.

Invoices: all-inclusive

Your biggest expense after the rental will be the bills, so better choose accommodation where they are included. If this is not possible, before signing the contract, make an approximate calculation of the cost of the invoices that you will have to pay. Although the owner cannot give you an exact figure, he will surely have a realistic estimate based on the previous year’s budgets.

Space + Furniture

The location is perfect, the Wi-Fi___33 is blazing fast, and the bills are included in the rent. Now it’s time to ask yourself: where are you going to put all your belongings? It seems obvious, but don’t forget to consider space and furniture when looking for student accommodation.

Find out what furniture is included with the property and how much space you have for your room and shared areas. Make sure your bedroom has a closet, drawers, and a desk.

Bathroom: share or not?

This is another important aspect to consider. If you are a freshman, you may be used to sharing your bathroom at home. But are you comfortable doing the same with a couple of strangers?

On the other hand, if you’re planning to move in with your friends, a shared bathroom shouldn’t be a problem. Mind you, make sure everyone agrees to rotate cleaning shifts so you’re always presentable.

Ideal roommates

There is nothing that makes students far more than the prospect of living with an unbearable partner. Even if you move in with your friends, the coexistence will not always be perfect.

If you are looking for accommodation on your own, ask the tenant who your potential roommates could be. Maybe I can tell you more about them: Are they freshmen? Graduate? After all, if you are looking for a quiet house to face your last major exams, you don’t want to be stuck with three first-time students all year long.

In the event that you are thinking of going to live with your friends, first assess what living with them might mean in the foreseeable future. Do you like to party every weekend? Do you keep your room clean? Are they involved in shared tasks? If they don’t in their current situation, they will rarely start anytime soon.

Terms and Conditions

When you find the accommodation that best suits you, read the fine print of your rental agreement carefully before signing. You will save yourself a lot of trouble in the long run and it will be much easier to discuss any questions you have before it is too late. Better safe than sorry!

Creative freedom

There is nothing worse than living in an “empty” room for a year, so first check with your landlord to what extent you can personalize it. Ask him about the basics like putting up posters or putting on nails.

Personal and common area security

Probably the last thing you want to worry about is the safety of your belongings. When looking at accommodation options, choose those properties that have an up-to-date security system that allows individual rooms and main entrances to be locked.

PROPERTY DEED
HOW SHOULD A PROPERTY DEED PROCESS BE?

How should a property deed process be?

The deed is the legal document that establishes who is the owner of a property, their obligations and rights. This is prepared in a notary and serves to formalize the sale of a home or other type of property, a swap, mortgage, mortgage cancellation, among others.

If it is a sale, both buyer and seller must go to a notary and request the deed service.

Writing process

According to the Notary 37 of the Bogotá circle, the process of a public deed consists of 4 steps:

1. Declarations: this is what the parties want to declare before the notary (the purchase and sale of a property).

2. Transcription: what the parties declared to the notary is put in writing.

3. Reading and acceptance: everyone listens and approves the text before signing it.

4. Signatures: the notary and the parties involved (buyer and seller) sign the document.

This public deed of sale must specify the limits of the property, the cadastral certificate, real estate registration number, certificate of tradition and freedom and the price of the sale.

Necessary documents

To carry out this procedure you need the following documents:

• Photocopy and original identity document of the buyer and seller. If the buyer or seller is a legal person, they must present a document that validates their existence and legal representation. If one of the parties cannot attend, the representative must have a valid power of attorney.

• Proof of payment of the property tax for the current year, with the correct data of the property (full address, real estate registration and cadastral certificate).

• Paz y salvo de valorization (Urban Development Institute – IDU).

• Peace of mind from the administration (if the property belongs to a horizontal property regime). Also, a copy of the regulations of the complex or building is suggested.

• The seller is advised to bring a copy of the deed of acquisition and a certificate of tradition and recent freedom.

• If the property is new, the construction company must present other documents.

• If it is affected by housing, it can be cancelled in the deed of sale.

• In case of having unteachable assets and if there are minors, it can only be cancelled with a court ruling.

Deed costs

The cost of this procedure depends on the notarial fees, which are defined each year by the Superintendence of Notaries and Registry. Also, you must take into account the payment of withholding tax at the source and the value of the copy of the deed.

Deed record

Once the public deed has been made in the notary, it must be registered with the Public Instruments Registry Office of the city or municipality for the property to officially change its owner.

Share property
HOW MUCH IS A CO-OWNERSHIP WORTH?

How much is a co-ownership worth?

In the framework of the Horizontal Property Seminar ‘Tools and New Trends’, organized by Fedelonjas and the Sonja de Bogotá, they spoke about the importance of knowing the value of joint property and the cases in which it is necessary to make an appraisal of it.

Metrocuadrado.com interviewed Camilo Bermudez González, president of the Board of Directors of the Sonja de Bogotá and Andrés Martinez Umami, executive president of the Sonja de Bogotá.

According to Martinez, “Law 675 of 2001 establishes that co-properties can request the appraisal of both the common areas and the private areas, but they must necessarily request that the common areas be appraised.”

What is a co-ownership valued for?

The value of joint property is basically needed to know the replacement cost that it has. That is, how much is it worth to return the property to the original construction conditions, according to Martinez.

Generally, determining this value has two functions: knowing the insurable value and on the other hand for accounting purposes. “For insurable purposes, the value of the land is not taken into account, because the value of the land is a common good that does not depreciate and therefore is not an insurable value. The insurable value is the replacement cost of the common areas. In the book value if you have to include the land, but in the same way it is handled as a replacement cost of the unit again”, assured Bermudez.

Then, those who use the value that is established in the appraisal are the insurance companies, to determine what the insurable value is.

How often should the appraisal be done?

Insurers typically require a co-ownership appraisal to be done annually, experts said.

What determines the value of co-ownership?

The value is established based on the state of conservation of the goods. “The better common areas and common services a unit have, the more value it can have. If its deterioration is allowed to accelerate, obviously its value is detrimental,” commented the president of the Board of Directors of the Sonja de Bogotá.

In which cases is the insurer responsible for the replacement value?

“In cases where there is a loss, either due to a seismic movement, fire or any calamity, the insurance company enters to evaluate what the damages were and has to pay them at its replacement cost, that is, to replace it again “, Bermudez expressed.

It is important to clarify that in the event that the damage to the common goods is due to natural deteriorationthe insurer is not liable for them.

Who makes these appraisals? 

In these cases, as for the appraisals of private goods, Law 1673 of 2013 and Regulatory Decree 556 of 2014 govern, which stipulates that appraisers must have an open registry of appraisers to be able to carry out their activity, Martinez concluded.

 

HORIZONTAL PROPERTY,
HORIZONTAL PROPERTY, MORE THAN A HOME

Horizontal property, more than a home

Cities are changing, and one of the main changes is that now most of us live or will live in what is known as horizontal property.
They are constructions that allow better use of the space, but also give owners the option of accessing shared services, which make the experience of living in a community more comfortable and pleasant.

According to Law 675 of 2001, which contains the characteristics of this type of property, when you buy, you will have the right to enjoy different assets.

– Private or private property:

They represent the house itself. It is the space that you can adapt and reform if you wish. Remember that although the property is yours, the co-ownership statutes limit its use, so you will not be able to adapt it as a commercial establishment.

– Common areas for exclusive use:

They are spaces that are part of your property but that have restrictions, they are conditioned by rules to maintain harmony both in architecture and in coexistence. In places such as parking lots, terraces or balconies, although only you can use them, you must do so within the provisions of the rules of co-ownership.

– Common goods:

It refers to the play areas, green areas, swimming pool, gym, corridors, stairs, elevators and all those places that are within the horizontal property and that can be used in a shared way by each of the residents of the building or complex.

– Essential commons:

They are spaces that are part of the horizontal property and are considered common goods, but have restricted access because only expert personnel can manipulate them; this is the case of the aqueduct, sewerage, electricity, garbage areas, land and main facades.

Keep in mind that if you buy a property subject to the horizontal property regime, respect and care for the common areas must prevail. Remember that maintenance is done with the money contributed by each of the owners through an administration fee.

 

HOME PURCHASE
HOME PURCHASE: THE DOCUMENTS AND EXPENSES THAT YOU SHOULD TAKE INTO ACCOUNT

Home purchase: the documents and expenses that you should take into account

When buying a home, you must take into account the expenses generated by the process and the procedures that you must carry out to meet all the requirements. According to BBVA, these are the records and expenses that are normally incurred:

Records for property purchase

Registration of sale and mortgage

If you acquire a mortgage loan, you must jointly make a sale contract. This must be raised to a public deed and registered in the public instruments registry office.

The mortgage must be open, with no limit on the amount.

In order for the property to be accepted as collateral, it must be free of encumbrances, domain limitations, and completely healthy.

Transfer deed record

If the purchase is made through a housing leasing contract, you must make a transfer in favour of the bank. You must register this deed in the public instruments registry office and sign the lease.

Expenses that you must take into account

If you are going to buy a home through the modalities of mortgage credit and/or housing leasing, you must remember that this implies a series of expenses that you must take into account:

– Appraisal of the property.

– Study of titles and elaboration of the minute.

– Notarial charges.

– Benefit rights.

– Record.

Here we expand the information about each of them:

Property Appraisal:

It is required to determine the commercial value of the property and the fair price that must be paid for it, based on technically established factors. The bank’s commercial advisor will inform you of the amount to be paid for this service. Keep in mind that to carry out this activity, you must pay the corresponding fees in advance.

Study of titles and minutes:

They correspond to the fees paid to the external lawyers assigned by the bank in order to carry out the corresponding study and know the favorability of the property, to determine whether or not it is an admissible guarantee for the bank. If the concept is favourable, the minutes of sale and mortgage and/or transfer minutes are prepared for sending to the notary.

For this purpose, you must provide at least the following documents:

– Promise of sale.

– Certificate of tradition and freedom of the property, with an issue date of no more than 30 days.

– Copy of the property’s traditional deeds of the last 10 years.

Notary, charity and registration expenses:

By the day the deed is signed, you must have made a provision for these expenses. The financial institution’s advisor will do a simulation and report the approximate value for each of the parties.

Notaries:

These rates are established by the Superintendence of Notaries and Registry.

Both the buyer and the seller will assume the notarial expenses in equal parts.

The seller must pay 1 percent for Withholding at Source on the value of the act.

These values ​​are cancelled at the notary at the time of signing the deed.

Charity:

This is a departmental tax for writing.

In this case, the buyer must pay a percentage of the sale value of the property. In some cities, there are additional taxes that will be assumed as agreed by the parties.

Record:

Corresponds to the registration of the act before the Office of the Registry of Public Instruments.

The registration of the deed corresponding to 1.67% of the sale value is cancelled, this must be paid by the buyer of the property.

In summary, for the sale of the property, the buyer in total must pay 1.94% of the value acquired, and the seller must pay a total of 1.27% of the value for which he sold the said property.

BOARD OF DIRECTORS
GUIDELINES FOR THE WORK OF THE BOARD OF DIRECTORS

Guidelines for the work of the board of directors

This body was created to serve as an intermediary between the co-owners and the administrator.

Despite the fact that in residential use it is not compulsory to integrate boards of directors and, where they exist, they are not empowered to authorize or not the budget execution ordered by the general assembly of co-owners, many analysts consider them key.

According to German Molino, president of the College of Horizontal Property Administrators of Bogotá, the complexity of the operation of the legal entity in the buildings and complexes determined the need to establish them.

The manager explains how this body created in Law 675 of 2001 works with the fundamental function of serving as an intermediary between the co-owners and the administrator.

Their integration must always be three or more owners, but always in an odd number.

According to the horizontal property regulations, the directors of administration may have alternates and for this purpose, the wording of the management of each of them must be very clear.

In the terms of Law 675 of 2001, its specific functions are to appoint the administrator, in certain cases, and review with him the annual accounts, the report for the assemblies, the budget for the new term, the balance sheet and the budget execution; in addition, it must call the meeting of the extraordinary general assembly.

HAVE POWERS

The regulations grant them other powers that as long as they do not go against the law, nor the functions of the assembly and the administrator, will be welcomed. If the building statute so prescribes, the council must impose sanctions on those who fail to comply with non-pecuniary obligations, of course, under the principle of due process.

It must be taken into account that the board of directors does not represent the co-owners before the authorities and third parties. It only carries out coordination, orientation and advice to the administration on duty.

The co-owners always ask if the directors should be compensated with economic benefits or by making discounts on the common expenses. However, in many cases, this kind of recognition is neither practical nor economical. But if the co-owners want, at the meeting of the ordinary general assembly they can evaluate their work in the immediately previous period and, in this way, authorize recognitions that do not mean damages to the patrimony.
Finally, it must be taken into account that the constitution of the councils is mandatory in buildings or complexes of commercial or mixed-use of more than thirty private units, without taking into account parking spaces and deposits.

THE ASSEMBLY ELECTS THE DIRECTORS

The co-owners gathered in the general assembly elect the members of the council. The profile of the candidates to integrate this body are in the horizontal property regulations; However, ethical principles must be taken into account, including that they do not have financial obligations and investigations for violations of the rules of coexistence, or relationships or other affinities with other directors or with the administrator or fiscal auditor.
The form of election of the directors will also be determined by the horizontal property regulations.

FUNCTIONS ALSO HAVE LIMITS

It is customary to include functions for the board of directors in horizontal property regulations, many of them contrary to those established by law. Therefore, conflicts of jurisdiction are generated with the general assembly, the administrator and the fiscal auditor.
German Molino, president of the College of Horizontal Property Administrators of Bogotá, notes that he is empowered to advise the administrator and ensure that he complies with the law, the regulations and what is ordered by the assembly.
In addition, you must review the physical state of the building or complex on a monthly basis, and the budget execution for its maintenance; Likewise, it must be aware that the health and safety controls with respect to the possession of pets are complied with and, incidentally, control –but not prevent– the investment of the money ordered by the assembly for co-ownership.
The council meetings will be held in the manner stipulated in the regulations, normally every month.
The indefinite number of meetings should not be allowed, as there are other obligations that require more attention.

ASSEMBLY OF CO-OWNERS IN BUILDINGS
GUIDE TO ORGANIZE THE ASSEMBLY OF CO-OWNERS IN BUILDINGS

Guide to organize the assembly of co-owners in buildings

To begin with, it is important to know that seven out of ten residential projects in Bogotá are in the horizontal property.

The data, revealed by the Special Administrative Unit of the District Cadaster, not only allows us to measure the construction dynamics, but also to be more aware of the responsibility of the administrators in charge of guiding the day to day in the buildings and complexes subject to this regime.

In line with the subject, regarding the co-owner assemblies that take place between February and March of each year in this type of property, the lawyer Nora Paton Gómez highlighted some basic aspects of these meetings.

Why are co-owner assemblies held?

The importance of the asamableas lies in the fact that the aspects that will guide the proper functioning of the joint ownership are defined there. And, specifically, for residential use – as Catastrophe warns – the demands are increasing hand in hand with the horizontal property regime.

Regarding the assemblies, the first thing to answer is: what is the objective of the ordinary meeting?

According to Paton, the general situation and the economic and financial aspects of the horizontal property are examined there. In addition, the accounts and balances of the last budget period and the reports of the administrator and the fiscal auditor are approved or not. A relevant issue is the definition of the income, expenses and investment budget for the respective validity and, in general, the measures to guarantee compliance with the rules and regulations.

Other formal aspects before the assembly have to do with apparently simple issues, but which are not always fulfilled. For example, the administrator should encourage and remind the owners of the date and time of the appointment. In addition, although the law does not establish it, it is recommended to post the call on billboards in places with a wide circulation of the group.

A second meeting, the extraordinary assembly

If all the items on the agenda are not dealt with at the first meeting, the assembly will be called again to decide the rest. In this, the quorum to deliberate will be as in the first case: a plural number of owners representing more than half of the coefficients of co-ownership; to decide, the favourable vote of half plus one is key. If the quorum to deliberate is not achieved, the second meeting will have the character of a second call. It will session with a plural number of owners, whatever the percentage of coefficients.

Requirements for the call

The administrator must summon no less than fifteen calendar days in advance, as established by the regulations and in writing.

The summons must be sent to the owners at the last registered address. Therefore, it is essential to have the owner’s book with details about whether they live in them or have them leased, among others.

The summons must indicate the date, time, place of the meeting and the agenda. It is important to attach the form of the power of attorney so that those who cannot attend, grant a mandate to another person.

Better to accompany it with the list of quota debtors. In addition, the financial statements and the budget must be attached. The owners must be informed that the books are at their disposal.

RENTAL CONTRACTS
GUARANTOR AND CO-DEBTOR, TWO KEY FIGURES IN RENTAL CONTRACTS

In most cases, when a lease is going to be signed as a requirement, the owners, the real estate companies or the insurance policies require that the tenant be backed by one or more co-debtors or guarantors.

To resolve the most common doubts about these two figures, we spoke with the lawyer Fabián Zabala, legal advisor for Central de Arrendamientos and this is what he told us:

What are co-debtors or guarantors for?

According to Zabala, the function of both co-debtors and guarantors is to give greater security to a lease in case of default.

Coeditor vs. Surety, what is the difference?

“A joint co-debtor will always respond for each and every one of the obligations acquired by the tenant,” says the lawyer

Whereas, a guarantor enjoys the benefits of “division and exclusion”, in this way each of the people included in the contract – for example, a tenant with two guarantors – assumes a percentage of the debt.

Which figure is more secure against breaches?

Regardless of the case or the magnitude of the breach of the lease, the safest figure is that of the joint co-debtor.

Why should co-debtors or guarantors have a real estate?

This requirement on the part of real estate and insurance companies is to have stable support in case of default.

Can you stop being a co-signer in a contract?

It is important that it is not possible to stop being a co-debtor until the property is restored or the contract is finished and there is peace of mind, explains Zabala. In addition, if the tenant wishes to continue in the leased property, he must find a new co-debtor.