What is property formalization and how is it done in Colombia?

The deed execution process is a fundamental legal procedure in Colombia for formalizing the purchase or sale of a property. It is the step that allows the ownership of a real estate asset to be transferred from one owner to another, and that it be registered under the law. This process cannot be carried out without the intervention of a notary public, who ensures that all parties comply with the law and that the transaction is valid.

What is deed execution?

Simply put, deed execution is the act of drafting, signing, and registering a public deed. This deed is a legal document that contains the details of the transaction, such as the price, the terms and conditions of the contract, and the identification of the parties involved. Once the deed is signed, it must be registered with the Office of Public Instruments Registration, which gives legal validity to the purchase or sale of the property.

Why is it important?

It is very important because only through deed execution does the buyer or tenant officially become the owner of the property. Without this deed, the property is not legally recognized, and any dispute or issue with the property can be difficult to resolve.

Furthermore, deed execution ensures that legal regulations are met, including withholding at source, notarial fees, and other taxes or fees applied to the transaction.

Stages of the deed execution process

The deed execution process involves several key stages, which must be carefully followed to ensure everything is carried out correctly. These stages are:

1. Filing: This is the first step, where the purchase and sale contract is submitted to the notary office. The documents are reviewed and the information regarding the parties and the property is verified.

2. Execution: In this stage, the notary public drafts the contract, signs it, and sends it to the Office of Registration so that it can be officially registered.

3. Signing: Here, the public deed is signed before the notary public. At this stage, the terms of the contract are also defined, such as the payment of the property and the delivery timeline.

4. Authorization: Once the deed is signed, the registration must be authorized with the Office of Public Instruments Registration. This step is essential for the buyer to have legal ownership rights.

How much does deed execution cost?

The cost of deed execution varies depending on the notary office and the entity, but it generally ranges between 6% and 12% of the property's value. This amount is shared between the buyer and the seller. Some of the expenses include:

• Notarial fees
• Registration taxes
• Withholding at source (which is generally the responsibility of the seller)

The process of registering the public deed typically takes between 5 and 20 business days, depending on the workload of the registration office.

What documents are needed?

To initiate the deed execution process, identification documents are required for both the buyer and the seller, as well as:

• The purchase or lease agreement
• Certificate of ownership and age of the property
• Property details (floor plan or survey)
• Property documents (such as the deed or previous title, if applicable)

It is important to be well-informed and have the assistance of a legal advisor or notary to avoid errors that could delay the process or create legal problems.

Is title transfer necessary?

Yes, it is essential. Without title transfer, the property is not legally recognized, and the buyer has no ownership rights to the property. This can lead to future complications, such as inheritance issues, or difficulties in selling or leasing the property.

Additionally, if you purchase a home or property without completing the title transfer, the buyer runs the risk of the transaction being invalid under the law and losing the invested money.

In summary

Title transfer is a process that ensures the legality and transparency of real estate transactions in Colombia. It is a key stage for protecting the buyer’s rights and ensuring that properties are correctly registered. The process is divided into several stages and must be carried out with the involvement of a notary and full compliance with all legal requirements.

If you are planning to buy or sell a property, it is essential to understand every step of the title transfer process. And if you need it, D.C Colombia accompanies you at every stage, offering the necessary advice so that your process is clear, secure, and hassle-free.

Are you ready to start your next purchase or sale? Contact us and we will help you find the ideal property with all the necessary legal guarantees.