Hiring an attorney serves multiple purposes. First and foremost, it buffers you from the natural stresses of an international real estate venture—concerns regarding your final choice and the legalities of its acquisition are natural and best eased by a seasoned expert in real-estate legalese. A Power of Attorney (POA) might be a good idea if you are going to be outside of Colombia during much of the sale process, as your attorney will be able to work on your behalf. When I bought my first property in Medellín in 2014, I used a local law firm that helped to make the process easy for me. At the time, my Spanish was essentially non-existent but they had English speaking lawyers that walked me through each step.
2021: The potential problems that a good real estate attorney can identify are innumerable. I will list two quick examples here. One deal last year, the seller seemed like a totally legitimate and honest Colombian businessman and a client proceeded to make an offer on his place. About a week before signing, he said he was travelling and would have a friend with a POA sign the promesa de compraventa for him. We took the POA to a notary and had it validated, but our lawyer noticed that the POA, while including the correct address and description of the property, contained other different identifying details (codigo catastral) than the property we were trying to buy. The notaria had not noticed and had given us the green light to proceed. After signing, a 20% downpayment would have been sent, and because the POA was invalid, there would have been no recourse. Its as if the client would have signed a meaningless promesa with an owner’s friend and then sent the $ to a different person. We have reason to believe the mistake was intentional and quickly abandoned the deal and found another place.
A second real-world example demonstrating the importance of a good lawyer was when another buyer wanted a place that had a mortgage. The mortgage was originally in favor of Davivienda but they transferred the mortgage to Bancolombia. The real estate attorney had to make several trips to each bank to talk with executives in those banks that would confirm how and when the mortgage was transferred between the two and provide the proper documentation that would allow for the cancellation of the mortgage and the liberation of the property. We’ve in fact seen other deals where the existence of a “messy” mortgage has been cause to desist from the sale altogether, but in the case the lawyer’s diligence and efforts allowed the person to get the property that they wanted.
In the majority of real estate transactions there are some small legal quirks that need to be dealt with to make sure that the entire process goes smoothly. This is not to dissuade anyone from investing here, as you can and should invest with confidence in this booming market. Just make sure you do it with the right team.