The short version
- Off-plan, you pay first and see the result later. The contract and the documents are all you have.
- The main risks are delay, changes to what was promised, defects at handover and, in the worst case, a project that stops.
- Ask how your payments are held, what the building permit says and what the contract says about delay.
- Inspect the home at handover, before you accept it.
This guide is general technical information and not legal advice. The contract and the trust documents must be reviewed by a licensed attorney in Colombia.
Why off-plan is different
With a finished home you can inspect what you buy. Off-plan, you buy a promise described in drawings, a list of finishes and a contract. Between your first payment and the handover there can be two years or more, and during that time you depend on the developer’s ability to finish.
Foreign buyers usually pay cash. That means no bank reviews the project for you before you commit. See how to avoid construction fraud and bad builds for the general checks.
The main risks
1. Delay
Delays are common in construction. The question is what your contract says: the delivery date, any grace period and the penalty the developer pays if it is late. If the date is described as “estimated” and there is no penalty, the risk of delay is yours.
2. The home is not what was promised
Area, layout, finishes, parking and common areas can change between the sales material and the building. What counts is what is written in the contract and its annexes. Ask that the drawings of your unit, the area and the list of finishes be attached to the contract.
3. Defects at handover
Cracks, leaks, poor finishes and incomplete installations appear at handover or soon after. Colombian consumer law gives buyers of new homes warranty rights. Ask your attorney which warranties and time limits apply to you, and report defects in writing.
4. The project stops
A project can stop if sales are low, financing fails or permits have problems. This is why you must understand how your payments are held before you pay.
How payments are usually protected
Many off-plan projects in Colombia use a trust (fiducia). Buyers pay into the trust, which is managed by a trust company, and the money is released to the developer when the conditions in the trust contract are met. Trust companies are supervised by the Superintendencia Financiera.
A trust is not a guarantee that the project will be finished. Ask:
- Which trust company manages the money, and can I see the trust contract?
- What conditions must be met before the money is released to the developer?
- What happens to my money if those conditions are not met?
- After the money is released, who controls how it is spent?
Your attorney should read the trust contract and explain the answers.
Documents to ask for
- The building permit of the project and proof that it is valid.
- Proof that the project is authorised to be sold. Your attorney can verify this with the municipality.
- The title of the land and who owns it.
- The trust contract, if there is one.
- The drawings and the list of finishes of your unit.
- The contract you will sign, with enough time to review it. See promise of sale: questions before you sign.
During construction
Ask for regular progress reports with dates and photos. If the project is important to you, an independent engineer can visit the site and compare the progress with the schedule. Slow progress with no explanation is a sign to ask questions early. See the construction red flags.
At handover
Do not accept the home in a hurry. A technical inspection compares the home with the drawings and the list of finishes, tests the installations and lists every defect in the handover record. See property inspection in Colombia.
A practical checklist before you pay
- My attorney has reviewed the title, the permit and the contract.
- I know how my payments are held and when they are released.
- The delivery date, the grace period and the penalty for delay are written.
- The drawings, the area and the finishes of my unit are attached to the contract.
- I know which warranties apply and how to report defects.
- I have planned an independent inspection at handover.
Where to go next
Read buying property in Colombia as a foreigner for the full process. To have a project reviewed before you commit, see property due diligence.