Hire a lawyer for Colombian Real Estate Transactions !
...and yet another ''horror'' story.
In our Hallowe'en broadcast for the Colombia Ecuador Roadshow in 2014, we did the entire show on expat ''horror'' stories.
With the risk of sounding like a broken record here is yet another one.
I have a client who is selling her apartment. When she purchased it, on good faith she listened to the Colombians that were assisting her in the sale. They were ''oh, so nice and helpful''. This purchased happened 5 years ago.
Here we are, April 2015. The property has been listed for sale and the seller is hoping to repatriate her money back to her home country......but wait !!! She knows nothing about a Formulario 4 and how her money was registered when she sent it to Colombia. After some research we track the funds down and the accompanying documents as well.
Finally after some negotiation we have a serious offer in play. The interested party has his attorney contact us and the dance begins.....but wait - again !!! There is a mortgage showing on the title. Hold on, the title is suppose to be free and clear. At least no bank has come knocking over the past 5 years to repossess the property.
What has happened ? Well, the nice woman who sold the property to our client, did not clear her mortgage off the title. Supposedly the mortgage was paid but nonetheless it is still showing on Certificate of Tradition.
Guess what ? The buyer will not sign a promesa until the mortgage is removed from the title. Guess what - again !! Double Jeopardy !!! The previous owner is ''too busy'' to deal with this now. She will not take calls or respond to emails. Without her co-operation this task can not be achieved as the bank will only provide the documents to the individual who held the mortgage. In all likelihood the deal will collapse as the result of a rather uncooperative individual.
Now you may ask, ''could the current owner take legal action'' ? The answer is yes however this will eliminate any chance of cooperation and create a long drawn out legal battle.
The Moral of the Story
This moral may seem self serving but it has proven itself out time and time again. Don't chintz out on hiring a lawyer when you are doing a real estate transaction, especially in Colombia. If you are American then you probably would buy title insurance ''back home''. Just consider this the equivalent of your title insurance. The goal is to reduce your risk, so hire a good lawyer. Not only will they prevent problems like this from happening, they will be guiding you with the registration of your funds and advising you on the potential steps necessary for applying for a visa.
If a lawyer had been involved in this situation, the mortgage would have been cleared off the title before the deed/escritura was signed. Not only that, if there has been a slip up in the registration it would have been noted when the formal documents were returned to the attorney.
Steckenreiter Serna and Associates specializes in these Expat/Legal Services. We manage Real Estate Law, registration of foreign funds and immigration (Colombian visas), the creation of corporations along with the other legal needs of our foreign clients. If you have any doubts about your situation contact us email@example.com