Last week I gave a quick breakdown of pre-sale: you pick an apartment off a floor plan, put down a deposit, and pay installments while a building you've never seen goes up 5,000 miles away (or wherever you are). I promised this week I'd explain the thing that keeps that from being insane. It's the fiducia, the regulated trust your money runs through, and it's the reason a Colombian developer can sell you an apartment before they are allowed to pour a single foundation.
When you commit to a unit, the deposit you pay doesn't go to the developer. It goes to a fiduciaria, which is a trust company licensed and supervised by Colombia's financial regulator, the same body that watches the banks. The fiduciaria opens a dedicated trust for that one project and holds every buyer's money inside it. The developer cannot touch it.
The money marinates there while the sales office keeps selling. The contract sets a threshold the project has to clear before construction can be funded, the punto de equilibrio (break-even pre-sale point): usually a large share of the units sold plus any dependent financing that needed to be lined up. And UNTIL the project hits that number, the building exists as drawings and a deposit account. Again, money untouchable.
Two things can happen next.
If the project never hits equilibrium, then it doesn't get built, and the fiduciaria returns your deposit by a specified date. In a preventa trust it comes back with the yield it earned while it sat there. You lose some time, but not your money.
If the project DOES hit equilibrium, the fiduciaria starts releasing funds to construction, but still not in one lump sum. The money comes out against verified progress, against the construction milestones written into the trust contract, checked before each disbursement. That verification is what the fiduciaria is for, and on that narrow point the Colombian courts have held it to a very high standard.
That's the guarantee, and it's a real one. Your money is ring-fenced by a regulated third party, returned if the project dies, and metered out against proof of work if it lives. You are not wiring cash into a stranger's checking account and hoping. Most Americans have never heard of any of this and assume the worst about buying off-plan abroad. The structure is better than they think. Americans includes me, btw.
The part the brochures skip:
The fiducia does not guarantee you a finished apartment.
Under Colombian law the fiduciaria carries what's called an obligación de medio, an obligation of means, not an obligación de resultado, an obligation of result. Out of the legal Spanish: the trust company promises to administer the money with diligence and follow the contract. It does not promise that the building gets finished, finished on time, or finished well. Those are two different promises, and only the first one is being made to you.
So once your deposit clears equilibrium and flows into construction, a set of risks lands on you that the fiducia was never built to cover. The developer can run over budget. The build can stall for two years. The finishes can come back nothing like the render. The developer can manage a funded project into the ground, and this has happened. The trust polices the cash. It does not build the building, and it does not write you a check for a developer's bad execution.
This is why the fiduciaria's name matters as much as the developer's, and why "there's a fiducia" is the start of your diligence, not the end of it. Before any money of MINE moves, I would want to know which fiduciaria holds the trust and what its track record is, what the developer has delivered before, and how the milestone releases are structured. The protection is in those specifics, not in the word on the brochure.
I'll go deeper on each of them in the issues ahead, and I'm working on a buyer's guide for myself that I think will eventually be useful for others, and that guide will walk the whole document trail. I'm learning this day by day, week by week as of now, I'm not a lawyer and not yours, and before anyone acts on any of it a Colombian attorney has to confirm it against the actual contract. (I hate to sound like GPT, but oh well...)
Next week: the promesa de compraventa, the binding contract you sign before ground breaks, and the first clause I'd read before I signed anything.
Happy to hear your feedback! If anyone has any ideas or questions, let me know!
— Dmitriy