Commercial Leasing in Colombia: Enterprise Landlord Guide
Summary of the laws regulating commercial premises in Colombia, including the right of renewal, eviction timelines, and business protection.
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Commercial leasing in Colombia is not governed by Law 820 of 2003 (which regulates housing), but entirely by the Commercial Code. This regulatory framework has a central purpose: to protect the enterprise, the commercial establishment, and the clientele ('Goodwill') that a businessperson or merchant has built in a physical property over time.
Key Differences from Residential Leasing
Unlike urban residential leasing, where the rules seek to protect the inhabitability of the tenant, commercial premises operate under rules of commercial public order (Articles 518 to 524 of the Commercial Code). This means that any contract clauses that go against the structural protections of the tenant entrepreneur are void and null, lacking any legal value, even if they are signed before a notary.
The Right of Renewal (Art. 518)
The golden rule of commercial renting in Colombia is the Right of Renewal (Derecho de Renovación). If an entrepreneur has occupied a commercial premises, running the same establishment and exercising a similar business activity for two (2) consecutive years or more, they automatically acquire the right to have their lease renewed almost in perpetuity, barring very specific legal exceptions.
It doesn't matter if the contract expired; the law shields the entrepreneur, compelling the property owner to renew. To refuse renewal after the 2-year mark, the landlord can only appeal to very narrow causes (e.g., needing the premises for their own residence, or for a business that is substantially different from the tenant's current one). To fully understand when you can and cannot refuse renewal, consult the Commercial Eviction Guide.
The Commercial Eviction Notice (6-Month Desahucio)
If a legally supported exception is met that defeats the tenant's right to renewal, the landlord must file an official "Desahucio" (Eviction Notice) to their tenant, with a strict minimum of six (6) months in advance of the formal expiration date. If this notice is dispatched even one day late, the contract is legally understood to be renewed under the existing conditions.
Negotiating the Rent (Art. 519)
Since both parties are forced to renew after 2 years, disputes frequently arise: At what price? The law does not impose a strict CPI legal increase cap like it does for residential housing. Therefore, the parties can establish the annual commercial rent at market rates and based on commercial profitability. However, if both parties cannot agree on a reasonable price when the time comes, the matter must be resolved by local experts (peritos) through the judicial system, while the renewed lease continues to operate provisionally. Read more about commercial rent increases here.
Commercial Subleasing and Assignment (Art. 523)
Logically, the commercial tenant cannot excessively sublet if it alters the main destination of the property signed in the contract. However, interestingly, in Colombia, the merchant does have the explicit right to legally sublet up to half the meters or use of related areas without needing absolute permission from the owner, provided that this does not injure or prejudice the rights of the original superior landlord and does not substantially alter the business furnished inside.
On the other hand, definitively assigning the entire contract to another entrepreneur or an external brand requires explicit written authorization from the owner as a clause. That is, unless the entire local brand or establishment is bought, merged, or alienated as a whole; such an assignment takes refuge in a total protected transfer of the company itself.
Elite Commercial Management with Landager
Commercial premises represent the prime investment and leasing transactions in prosperous Colombian urban areas, but they are also the most restrictive due to the immense power dictated by corporate protection laws. Avoid being forced to renew without adjusting your operating margins. Landager reliably monitors accumulated years of commercial tenure, alerts you semi-annually to decisive deadlines, and issues effective preventive dispatches on large-scale commercial contracts to massive corporate offices or corner stores alike.
Explore other commercial guides for Colombia:
How Landager Helps
Landager tracks lease terms, automated rent reminders, and document expiration - making it easy to stay compliant with Colombia regulations.
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