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.

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.

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.