The Federation of Real Estate Exchanges (Fedelonjas) explained that homeowners in Colombia will be able to increase the rental value up to 4.09%, that is, they rise at the same rate as the inflation caused during the previous year as established in Law 820 of 2003.
As stated by the president of the entity, Maria Clara Tuque, “the increase has a wide impact among the Colombian population since it affects thousands of families that live in rent as well as the owners of the units that earn their income from said rents.”
The leader of the union that groups real estate professionals clarified that leases are not automatically increased in January but when the contract is 12 months after it was signed or after the last increase.
Likewise, the defined increase is legal as long as “it does not exceed 1% of the commercial value of the property or of the part of it that is leased,” he added.
According to Tuque, the readjustments do not apply to real estate lease contracts for commercial use. In these cases, both the value and the increase must be agreed upon between the parties or according to what was consigned in the lease.
Fedelonjas recommends taking into account the following points by landlords and tenants:
- The increase is applicable only at the time of the renewal of the lease and always with prior communication from the lessor.
- The landlord is free to apply the increase or refrain from doing so if he prefers to maintain the contract for a longer time.
- The lessee may demand the termination of the contract without being subject to the collection of financial penalties if the lessor increases the fee above what is established in the Law.
- Notification of the increase in the value of the fee and the date on which it will begin to be applied must be done in writing and through certified mail or through the mechanism established in the contract.
- For lease contracts signed before July 10, 2003, the rate increase may not exceed the inflation target set by Bunco de La Republican for the year 2017.
- Always choose a real estate professional with a recognized track record who will draw up contracts with all legal conditions, safeguard the rights of the parties and help you choose the most profitable asset.