The Rental Agreement
Understand what to expect from the tenancy agreement when renting a property in Colombia...
Once a property has been found to rent, contact the landlord, either directly or via an estate agent, to make an offer.
The documentation required for rentals depends on the type and cost of the property. In general at least one guarantor and documentation detailing proof of income is required to rent a property, however, newcomers to the country may find that landlords request two guarantors. Insurance companies who provide policies to secure rent for property owners, will often carry out this initial assessment. These companies will also draw up contracts and take care of the paperwork for the landlord. Prospective tenants will be credit checked and be asked to complete the following requirements:
- Submit an official rental application (la solicitud de arrendamiento) and cover any costs involved
- The application must be signed by the prospective tenant and all guarantors
- Income certificates must be provided demonstrating a monthly income at least twice as large as the rental price
Generally, if the rental price is less than 500,000 pesos, one guarantor is needed who owns real estate and has monthly income of at least double the amount of the rental price. If the rental price is between 500,000 and 1,000,000 pesos, two guarantors are needed. One must own property and the other have a monthly income twice the amount of the rental price. If the rental price is higher, then both guarantors are required to own property.
Required documentation for a rental application
- Identification documents of the prospective tenant and all guarantors
- For employed individuals, a job certificate, employment details including duration of employment, and three months payment receipts
- For pensioners three months bank statements and proof of pension income
Once these documents have been submitted to an agent or the landlord, a response is given within 24 hours as to whether the application has been successful. If so, then the letting or insurance agents usually draw up a contract to be signed by both parties. A cost of up to a quarter of a month's rent may be charged for this process - this depends on the agents.
The tenancy agreement usually includes:
- Details of both parties
- Address and details of the property
- Beginning and end date of the agreed tenancy period
- Rent payment arrangements
- Responsibilities of both the tenant and landlord
- The length of the contract and termination requirements
- An inventory appended to the back of the contract, signed by both parties
A tenancy agreement states who is responsible for maintaining the property and who is responsible for damages. Most landlords require that a property is returned to its original state when it is vacated; it is advisable to agree with the landlord what, if anything, needs to be done a couple of months in advance of vacating the property. A contract may be terminated early if either of the parties does not comply with the terms of the agreement.
Metro Cuadrado provides templates of standard rental agreements, which can be downloaded.
Terminating a Rental Contract
When cancelling a rental contract within the original terms of the agreement, it is necessary to send written notice to the owner of the property, at least three months before the end of the contract stating the wish to terminate and not renew the contract when it expires.
In order to cancel a rental contract before term, Colombian law establishes that written notice must be sent to the landlord no less than three months before the desired cancellation time, and a penalty payment may be charged, which usually corresponds to the equivalent of three months' rent.
In this case there are two possibilities: the first is that the landlord accepts the reasons for cancelling the contract before time, and a negotiation on the penalty fee may be achieved. The second possibility is that the owner objects to the early termination of the contract, and issues a lawsuit, in which case the tenant must pay the remaining months’ rent.
It is common for the rent of a flat to go up by a small percentage each year of the tenancy, in line with rising inflation. The price increase is capped and must be less than the inflationary rise, and the monthly rent may not be more than one percent of the value of the property.
It is often the tenant's responsibility to pay for public services such as water and electricity, although this may vary from one rental property to another - the person responsible should be stipulated on the lease. If the rental is for under six months, then utilities are generally included in the rental price.
Any additional services contracted from private companies, such as for Internet and television, are generally the sole responsibility of the tenant.
Insurance companies function in Colombia in place of deposits. A landlord will draw up a contract with an insurance company, which will offer security against arrears and damage to the property. A standard policy covers the property owner for 36 months’ rent and a fixed sum for any property damage. The cost of the policy will be written into the contract and will consist of a monthly charge as a percentage of the rental price, or an annual sum may be charged.
An inventory (inventario del inmueble) should be made at the beginning of a tenancy agreement and a copy kept by both parties. The inventory should be signed and added to the tenancy contract and should include details of the contents of the property, with notes of any damaged furniture or fittings.