The Colombian Legal System is governed by the system known as civil law.

In Colombia, construction and engineering projects are subject to a set of legal obligations that aim to ensure safety, quality, and regulatory compliance. The main legal obligations are detailed below:

Urban Licensing o permit: It is mandatory to obtain the corresponding urban licensing, issued by the competent authority, before commencing any construction, expansion, modification, adaptation, structural reinforcement, restoration, reconstruction, enclosure, demolition of buildings, and urbanization, parceling, lotting or subdivision of properties located in urban, urban expansion, and rural lands. The main legal framework is constituted by Law 388 of 1997, Decree 1077 of 2015 and the Territorial Planning Scheme of each municipality or district.

Seismic Resistant Standards: Buildings must comply with the regulations governing seismic-resistant constructions, such as the Colombian Seismic Resistant Construction Regulation NSR-10.

From an environmental legal perspective, construction and engineering projects are subject to a series of key obligations and considerations that must be addressed from the planning phase, through execution, and into post-construction. The most relevant are outlined below:

Environmental due diligence of the development area: Although not a strict legal requirement, conducting prior environmental due diligence is essential to identify and manage risks. This evaluation helps determine whether the area overlaps with environmental protection zones, nature reserves, riparian areas, or strategic ecosystems, which may restrict or condition the types of activities permitted.

Verification of public utility service coverage: Initial due diligence also helps determine whether the project area is covered by public utility infrastructure, especially in terms of potable water and basic sanitation. If such services are not available, the necessary environmental permits must be obtained.

Mandatory environmental permits and licenses: Depending on the type, scale, and location of the project, the following environmental procedures may be required and must be completed before the start of construction:

Environmental license: Mandatory for high-impact projects as defined by the environmental authority. This process includes an Environmental Impact Assessment (EIA).

Water concession permit: Required to extract water from surface or underground sources.

Discharge permit: Necessary when wastewater is discharged into the soil or water bodies, ensuring compliance with technical quality standards.

Permits for forest use, occupation of watercourses, air emissions, among others, depending on the specific activities of the project.

Management of waste and environmental liabilities: The project owner is obligated to implement an integrated management plan for construction and demolition waste (CDW), and to prevent the generation of environmental liabilities during and after the construction phase.

Compliance and monitoring: Throughout the execution and operational phases of the project, all conditions set forth in the environmental licenses or permits must be fulfilled, including the submission of monitoring and follow-up reports.

Corporate Requirements

From a corporate standpoint, construction projects involve a series of legal and organizational obligations that should be reviewed before the start of activities. The company developing the project must be duly incorporated, have the legal capacity to carry out construction-related activities, and ensure that its corporate purpose and structure are aligned with the execution of the project and the obligations associated with its legal form.

In addition, it is important to identify and properly structure the key agreements required during project execution, such as construction or works contracts, Engineering, Procurement and Construction (EPC) agreements, and supervision or management contracts. These instruments are essential to define the scope of services, allocate responsibilities and risks among the parties, and establish performance, liability, and dispute resolution mechanisms.

Labor and Social Security Obligations

Construction and engineering activities require compliance with labor and social security regulations. Employers and contractors must ensure the timely payment of social security contributions, including health, pension and occupational risk insurance, and implement an Occupational Health and Safety Management System (SG-SST) to identify and control workplace risks. Given the high level of exposure inherent to these activities, special attention must be paid to the occupational risk regime, including proper risk classification, training, and adoption of adequate safety measures to protect workers.

Consumer Law

Construction and engineering projects are subject to legal obligations that protect the rights of purchasers as consumers, when applicable; some of the obligations are as follows: Quality assurance: Guarantee that the goods or services delivered comply with the agreed specifications and are free from defects. Transparent information: They must inform consumers with clear and truthful information about the characteristics of the project, without leaving behind any risks or limitations, Law 1480 of 2011. Special protection for homebuyers: Law 546 of 1999 establishes a special regime for buyers who use the property for housing. Claiming guarantees: Consumers can claim within the established legal term, which counts from delivery.

• health and safety;

In Colombia, all parties must strictly comply with the Occupational Safety and Health Management System (SG-SST), which is primarily regulated by Decree 1072 of 2015 and Law 1562 of 2012. Under this framework, employers and contractors have the non-negotiable obligation to enroll all personnel in the General Occupational Risk System (ARL), identify hazards, and implement control measures to prevent workplace accidents and illnesses.

• environmental issues;

The specific requirements depend on the magnitude, impact, and/or location of the project. However, whenever the use of natural resources is involved, the corresponding permits must be obtained from the competent environmental authority, and these must be secured prior to the start of the project.

• planning;

The obligation to have the respective urban planning license, complying with the regulations for the use and exploitation of the land and fulfilling the respective urban planning obligations within the framework of the respective Territorial Planning Scheme.

Complying with the obligations, conditions and safety requirements established in the respective urban planning license.

• employment; and

In Colombia, employment contracts in the construction sector require strict compliance with minimum legal protections, which include, among other things, the payment of wages, employee benefits, social security, paid vacation, and the provision of work shoes and clothing appropriate to the risks of the job. Due to the nature of the sector, there is also significant recognition of premium pay for supplementary work (i.e., overtime, night shifts, Sunday work, and work on holidays).

These obligations are governed by a principle of equality that fully protects the migrant population in the country, ensuring that foreign workers enjoy the same labor and social security rights as nationals, and linking the signing of the contract to the obligation to facilitate their legal status.

• anti-corruption and bribery.

Yes. Real estate development and financing in Colombia are subject to a strong anti-corruption framework. The main sources are Law 1474 of 2011, and the Basic Legal Circular issued by the Superintendence of Companies, which impose compliance obligations to prevent and sanction corrupt practices.

Companies meeting certain thresholds must implement a Transparency and Business Ethics Program (PTEE), including due diligence on counterparties, internal policies (gifts, conflicts of interest), reporting channels, and monitoring mechanisms. Greater scrutiny applies in licensing, public procurement, and payment flows, where proper documentation is essential. Adopting standards such as ISO 37001 is recommended, and non-compliance may result in administrative, reputational, and even criminal consequences.

In Colombia, the permits, licenses, and documents required for construction projects vary depending on the project stage (before, during, and after execution). Below, the requirements for each stage are detailed:

Before Starting Construction

Urban Licensing: It is mandatory to obtain this license before starting any construction work. The license must be issued by the competent authorities (municipalities, districts, or urban curators) and must comply with the Territorial Planning Scheme and other applicable urban regulations. The documents required to process this application are detailed in Resolution 1025 of 2021 of the Ministry of Housing. Among these documents, the certifications issued by public utility companies regarding the immediate availability of public services are highlighted for urbanization licenses, or the authorizations that support how public utility services such as potable water and basic sanitation will be provided in the case of self-supply for parcelation licenses.

Approval of Designs: In the case of urbanization and parcelation licenses, once obtained, it is necessary for the competent authorities to approve the construction and/or provision of designs for roads, parks, equipment, public service networks, etc.

Obtaining environmental licenses, permits, and/or authorizations: The need to obtain an environmental permit depends on whether the project requires the use or exploitation of a natural resource. Below are some examples of permits:

If the project requires the use of surface or groundwater for supply, it must obtain a water concession.

• If the project requires the use of water or soil to discharge the treated wastewater it generates, it must obtain a discharge permit.
• If the project requires cutting down trees to clear the work area, it must obtain a forest use permit.
• Depending on the project and its location, community participation processes may need to be carried out.

Review of the availability of essential public utilities, such as water supply, sewage systems, and electricity, and their compatibility with the project’s requirements. If such infrastructure is not available, the necessary environmental permits for alternative solutions are obtained.

Environmental due diligence to determine whether the project area overlaps with environmentally protected zones, natural reserves, riparian areas, strategic ecosystems, or any other areas under special environmental regulation that may restrict or condition development.

Advisory on the formulation of initial environmental management plans, including the Construction and Demolition Waste (CDW) Management Plan, and strategies to prevent the generation of environmental liabilities during and after construction.

Sales permits are required to promote, advertise, and develop housing projects. In such cases, developers must submit the relevant documentation to the municipal or district authority responsible for the supervision and control of real estate construction and sales activities:

Real estate registration folio of the real estate property or properties that are the object of the request, whose date of issue is not older than three (3) months.

A copy of the template agreements to be used for transferring the real estate units to purchasers, for the purpose of verifying that their clauses are consistent with and comply with applicable civil and commercial regulations.;

The project’s financial budget;

• The respective urban development license, except in the case of the pre-sale system; and
• When the property on which the plan or program is to be developed is encumbered with a mortgage, it must be evidenced that the mortgage is obligated to release the land or buildings that are being sold, by means of the proportional payment of the lien affecting each lot or building.

During Construction

Technical Supervision: Independent technical supervision is required for the execution of construction projects that require and are subject to independent review of structural designs, for example, buildings with or exceeding two thousand square meters (2,000 m²) of built area.

Updating Licenses: During the execution of the project, it may be necessary to extend planning licenses due to their expiration and/or modify them if changes are intended to the original project.

• Environmental requirements such as:
• Monitoring and oversight by the environmental authority
• Implementation of sustainable construction practices
• Compliance with setback and separation requirements.
• Advisory on proper management of construction-generated waste, particularly hazardous and CDW materials.
• Support during environmental authority site inspections and compliance monitoring visits.
• Identification of environmental risks and contingencies, and formulation of prevention, mitigation, correction, and compensation measures.
• Evaluation and proposal of sustainable construction alternatives, including water and energy efficiency measures.
• Advisory on the design and implementation of water management systems, such as water recirculation, rainwater harvesting, and gray water reuse.

Once Construction is Completed

Final Delivery: In the case of urbanization and parcelation licenses, once the works are completed, it is necessary to obtain a final certification that accredits compliance with established technical and regulatory standards.

Fulfilment of obligations derived from the permits: Such as monitoring, reporting, environmental compensations, etc. It is important to consider that if a natural resource is used or exploited without obtaining the required permit, the environmental authority is empowered to impose various sanctions such as fines, as well as corrective and compensatory measures to repair the damage caused.

Verification of compliance with all environmental obligations associated with permits and licenses, and preparation of final reports required by the environmental authority.

Management of the transfer, renewal, or filing of environmental files, as applicable.

Support during environmental authority inspections to verify regulatory compliance.

Advisory on the design and implementation of decommissioning plans, where applicable, to ensure legal compliance and proper environmental management at project closure.

Obtention of the necessary permits certifies the viability for the occupation of units destined for human habitation, in the case of construction permits for housing projects.

In the Colombian legal system, extra-contractual civil liability is recognized. This regime is primarily regulated in Articles 2341 to 2360 of the Civil Code.

Notwithstanding the foregoing, the law of extra-contractual liability has been extensively developed by the High Courts of Colombia (the Supreme Court of Justice and the Council of State), which have established specific rules for the application of the extra-contractual liability regime.

In a construction and engineering project in Colombia, the typical parties involved include:

The landowner: who holds legal title to the property. If the landowner is not the developer of the project, he or she may sell or contribute the land to the developer.

Project Promoter or developer: This is the person or entity that leads and finances the project and is responsible for contracting the company or individual that executes the works according to the approved designs and specifications. This can be a real estate developer, a public entity, or a private individual.

Financers: Normally, financers of construction projects are the State, through the entities intended to commission construction projects, private companies, banks or institutional investors such as pension funds.

Technical Consultants: These include architects, structural engineers, civil engineers, and other professionals who design, execute, and supervise the project.

Competent Authorities: These include municipalities, districts, urban curators, and other government entities that issue urban planning licenses and oversee compliance with technical and legal standards.

Construction and engineering projects in Colombia are typically procured through RFP (Request for Proposal) processes, which can be either open or closed. In an open process, the landowner or developer selects and invites specific third parties it considers qualified to submit proposals for the development and execution of the project. In a closed process, the request is published openly so that any interested party who believes it meets the necessary qualifications may submit a proposal.

The most used contract types in construction and real estate projects in Colombia depend on the specific needs of the project, the parties involved, and the objectives of each transaction.

On the one hand, the most common contracts include those for the sale and purchase of land for project development, supply contracts, and service contracts for the execution of construction work. On the other hand, the real estate trust agreement is widely used in these projects, under which the developer transfers ownership of the property to a trust company that administers and manages the project’s activities. Similarly, the delegated management agreement is used when the owner delegates the execution of physical work and the management of resources to a manager.

The joint venture is also used in various projects, as it allows different parties to partner for the development of a project, where one of the parties manages the participants’ contributions without the need to create a new legal entity. For larger-scale projects, Engineering, Procurement, and Construction (EPC) contracts are also used, under which a single contractor assumes responsibility for design, the procurement of materials and equipment, and construction, offering the owner a single point of responsibility and a fixed cost structure and schedule.

Since each contract is tailored to the specific needs of each project, under the principle of contractual freedom, these instruments are commonly negotiated and modified by the parties.

Contracting in the private construction sector is based on the principle of freedom of contract, allowing the parties to freely define the subject matter, price, and allocation of risks, provided that they do not contravene public policy. However, this freedom is subject to both general legislative frameworks and sector-specific regulations. In general terms, this area is governed by the Civil Code and the Commercial Code; in technical matters, by mandatory seismic-resistant construction standards, such as Law 400 of 1997, subsequently amended and supplemented by Law 1229 of 2008; and in the commercial sphere, by competition protection laws, such as Law 155 of 1959 and Law 1340 of 2009.

However, when the project is intended for housing, the Consumer Statute imposes strict public policy restrictions, including the automatic invalidity of unfair terms, among other obligations that fall under the oversight of the respective supervisory and regulatory authorities.

Indeed, during the execution of these activities, it is very common for the parties to hire specialised consultants, as this guarantees them technical and legal support to ensure the viability and success of the project. They are usually hired as consultants for architectural and structural design, technical supervisors, legal and regulatory consultants, project management, financial or fiduciary consultants, among others. However, about the most used contract forms and models, the following stand out:

• Technical consultancy contracts (especially for studies and designs);
• Controller contracts (Allows supervision at technical and administrative level);
• Project management contracts (support in the planning and execution stages).

Subcontracting is permitted in Colombia. However, there are important requirements and responsibilities that must be met: (i) the contractor may require prior written authorization to subcontract; (ii) the principal contractor is not relieved of its obligations and responsibilities and therefore remains liable for the performance of the contract; (iii) the contractor may be jointly and severally liable for the labor and social security obligations incurred by the subcontractor in the performance of the contract.

For subcontracting to be considered legitimate, contractors and subcontractors must demonstrate that they have a business organization specialized in the services or products they provide, with genuine technical, administrative, and financial autonomy. If they cannot prove this independence, there is a risk that they will be classified as labor intermediaries, which would make the workers direct employees of the contracting company, with all the implications regarding benefits and liability that this entails.

Article 34 of the Substantive Labor Code governs the status of independent contractors and establishes the joint and several liability of the party commissioning the work. Law 2466 of 2025 reinforces these requirements, placing a greater burden of proof on the contracting party. It is not enough to have a signed service contract: the company must be able to demonstrate that the contractor operates with genuine autonomy, has its own resources, and is not merely a supplier of labor.

The Ministry of Labor conducts active inspections in sectors such as construction, logistics, manufacturing, and services to verify compliance with these requirements. Inspections may result in the suspension of activities or preventive closures if an imminent risk is detected, with administrative penalties and, in cases of serious violations, fines that may reach up to 5,000 times the current legal monthly minimum wage.

The presale system has been a primary financing mechanism for real estate developments in Colombia. It allows developers to achieve commercial and financial break even before construction begins, reducing execution and market risks, while supporting the project’s bankability through the securitization of future cash flows.

Project financing typically relies on three sources: (i) the developer’s equity, used in the early stages and as a risk buffer; (ii) down payments from buyers, generally managed through trust structures and released once certain conditions are met (e.g., minimum sales levels); and (iii) debt financing, primarily from banks or alternative lenders, secured by the project’s assets and cash flows.

In larger or more complex projects, this structure may be supplemented with additional instruments, such as bridge loans or land acquisition loans, and real estate investment vehicles to cover developer fees and other costs, improving liquidity and capital efficiency throughout the project’s lifecycle.

Typically, those who contract with third parties to provide services or perform specific activities for the development or execution of a construction or engineering project usually require policies or insurance regarding the compliance with the agreed conditions, stability of the project, and proper management of the advance payment. These policies must be maintained throughout the term of the contract and, on average, for up to 1 to 3 years after the contract has terminated.

Notwithstanding, it is important to mention that the term “employer” in Colombia is only used in the context of labour contracts executed with natural persons and, generally, for the execution of construction or engineering projects, legal entities with experience and financial solvency are hired for this purpose.

Colombian legislation does not foresee a specific and sectorial law that is limited to regulating the payment mechanisms in private construction projects, as other legislations do (Housing Grants, Construction and Regeneration Act 1996); however, there are general provisions and complementary norms that seek to regulate these aspects. The Colombian Code of Commerce establishes that the currency of payment will be Colombian, unless otherwise agreed in the contract, as well as the amount of compensation in case of default, the domicile where payment must be made (unless otherwise stipulated), among other rules. Likewise, within the payments, it is important to contemplate the labor and social security regulations, since they must be up to date with the payment of the workers’ contributions; it is also essential to take into account the accounting and tax regulations that may have an impact, especially if electronic invoicing, tax withholdings, and taxes such as VAT or ICA are involved.

Furthermore, Law 2024 of 2020 provided that, in application of the principle of contractual good faith contemplated in article 871 of the Colombian Code of Commerce, all merchants, and those who without being merchants exercise mercantile operations, must make the payment of their contractual obligations, in a term not exceeding 45 calendar days. This will apply only when the payment is due to small or medium-sized companies.

In Colombia, “pay-when-paid” clauses (where payment to the subcontractor is contingent upon prior payment by the project owner to the contractor) are strictly limited by Law 2024 of 2020, known as the “Fair Payment Terms Law.”

This law establishes mandatory maximum payment deadlines for commercial transactions. Specifically, it sets up a maximum period of 45 calendar days from the receipt of goods or the completion of services, and its application expressly includes relationships between prime contractors, suppliers, and subcontractors.

A clause that conditions of payment on an uncertain event beyond the subcontractor’s control violates these mandatory deadlines. The law provides that its provisions cannot be modified by agreement between the parties, and that any clause that disregards these deadlines is ineffective without the need for a judicial declaration. The Constitutional Court has confirmed that the purpose of the law is to protect the weaker parties in commercial relationships.

However, the law exempts commercial transactions between companies classified as large enterprises from this regulation. In such cases, the parties retain contractual autonomy to agree on payment terms and conditions.

In the construction industry, contracts typically stipulate payments based on work progress, acceptance certificates, or the achievement of specific milestones, which is valid provided that the maximum legal deadlines are met once compliance with the relevant condition has been verified. It is crucial to properly document work acceptance, invoice traceability, and payment schedules to avoid commercial disputes.

Construction contracts in Colombia commonly include retention clauses as a mechanism to guarantee performance. Under these clauses, a percentage of the invoiced or executed value is withheld until the relevant contractual obligations are met. Their inclusion and scope typically depend on the level of trust between the parties and are governed by the principle of contractual freedom.

In practice, retention amounts tend to range between 5% and 10% of the contract value, though this may vary depending on the type of work involved. When the project is structured through a commercial trust, the trustee takes the role of administering the retained amounts. It is advisable to include reasonable terms for the return of those amounts, and while it is not standard practice to agree on interest for the period of retention, it is common to establish interest for delays in their return once the agreed conditions have been met.

Yes, penalty or indemnity clauses for non-performance are widely used in this type of contract, as they seek to ensure compliance with the different contractual obligations, such as the timely delivery of the works according to the established dates; they mitigate any risk of possible delays or non-compliance. These clauses are proportional to the possible damage caused by non-compliance, complying with the principles of good faith and transparency.

Sometimes the parties decide that the application of such clauses will require prior verification by the contracting party -usually though an independent advisor. Article 867 of the Commercial Code specifies the concept of Penalty Clause, recognizing that it is fully valid. The penalty can be fixed or proportional to the number of days or weeks delayed, possibly establishing a maximum cumulative ceiling. In the event of non-compliance with these clauses, the affected parties may resort to the Colombian courts or arbitration centers as a claim in the lawsuit, taking into account whether the contract has arbitration clauses; however, it is important to note that when the main performance for non-compliance is not determined or easily determinable by a sum of money, the judge will have the possibility of reducing the penalty if he considers it excessive, in accordance with Article 867 of the Commercial Code.

Under Colombian law, the principle of contractual freedom allows the parties to modify the rules governing contractual liability through exclusion or limitation clauses. These provisions enable the parties to define the scope of compensable damages, set maximum liability limits (such as the total value of the contract), or exclude liability for indirect, unforeseen, and/or consequential damages. However, this freedom is subject to regulatory limits of public policy.

On the other hand, the waiver of future fraud is void due to an unlawful purpose, a prohibition that case law extends to gross negligence because it is comparable to fraud in its civil effects. Consequently, while it is fully valid to allocate the economic risks of the project, such agreements must be express, clear, and ensure a minimum contractual balance, as they cannot cover fraud, bad faith, or the waiver of inalienable rights, under penalty of being set aside through a restrictive interpretation that prioritizes the parties’ actual intent over the literal wording of the text.

Under Colombian law, the termination of construction contracts is governed by the principle of contractual freedom and the principle of good faith. The parties may agree to unilateral termination for convenience, the legal validity of which depends on the inclusion of clauses governing notice periods and compensation for expenses incurred, in order to prevent abuse of rights. Likewise, when termination is by mutual agreement, it provides an expedited way to end the relationship without triggering penalty clauses, allowing for efficient resource management and the prevention of litigation in the event of changes in the project’s viability.

It should be clarified that force majeure acts as a ground for termination and an exemption from liability when the event is unforeseeable, unavoidable, and external to the parties, making it impossible to fulfill obligations. In the construction sector, extreme geological or climatic phenomena that exceed the risk matrix may justify early termination.

In construction and engineering projects in Colombia, it is common for key third parties, such as lenders, buyers, and strategic tenants, to be granted specific rights designed to protect their interests and support the project’s viability. Lenders typically receive guarantees and control mechanisms, including rights of intervention, assignments of project revenues, and guarantees on assets or fiduciary rights.

Buyers are typically granted rights to information, inspection, and acceptance to safeguard their investment, while strategic or anchor tenants may negotiate conditional lease terms or specific operational protections in commercial developments. These rights are generally implemented through project agreements, ancillary contracts, and, in many cases, trust structures, striking a balance between risk mitigation for stakeholders and the developer’s ability to manage and execute the project.

In Colombia, this type of clause is commonly included in contracts. However, under Article 13 of Law 1564 of 2012 (General Procedural Code), contractual provisions that impose additional conditions not established by law as prerequisites to filing a claim are not binding. Consequently, initiating legal proceedings without complying with such contractual requirements neither constitutes a breach of the contract nor prevents the claim from being admitted and heard.

Except for the ten-year policy, which is a mandatory insurance for housing developers to guarantee the protection of the property of new home buyers, in Colombia it is not mandatory, but recommended, for the parties to establish insurance within the framework of construction and engineering projects.

The most common guarantee policies established for those who contract services for these purposes are the following: (i) proper management of the advance payment, (ii) compliance of the Contract, (ii) contractual and extracontractual liability, (iii) stability of the work and quality of materials, (iv) payment of salaries and social benefits, maintained during the term of the Contract or execution of the work and up to, on average, one (1) additional year, except in the case of the one related to the payment of salaries and social benefits, which is maintained for three (3) additional years.

In Colombia, disputes in construction and engineering matters are commonly resolved through alternative dispute resolution mechanisms.

However, litigation through the judicial system is not uncommon.

As for the available alternatives in Colombia, the main ones are: (i) national and international arbitration; (ii) extrajudicial conciliation in law; (iii) litigation; (iv) amicable settlement; and (v) mediation.

In Colombia, domestic and international arbitration are regulated separately; however, in both cases, arbitrators have the possibility of requesting support from judges for the performance of certain actions.

In domestic arbitration, arbitrators have the same powers as judges and may therefore independently order, for example, the adoption of precautionary measures and the collection and production of evidence.

Nevertheless, domestic arbitrators may also delegate certain proceedings to local judges (for example, the enforcement of precautionary measures). However, this is uncommon, considering that arbitrators have the authority to order and carry out the same measures as a local judge.

In international arbitration, Law 1563 of 2012 allows international arbitrators to request support from local judges and courts, including for the production of evidence and the adoption of precautionary measures. The regulation of these powers is primarily set out in Articles 68, 71, 88, 89, 90, and 100.

The enforcement of arbitral awards is regulated differently for domestic and international arbitration.

If the arbitration is domestic, once the award becomes final, enforcement can be directly requested before local courts. Now, as of 27 February 2026, Law 2540 of 2025 entered into force, through which executive arbitration was introduced in Colombia. Pursuant to said law, domestic arbitral awards may be enforced through arbitral proceedings, provided that the parties have so agreed in the arbitration agreement.

Depending on the nature of the orders to be enforced, the enforcement proceeding may take before local courts between one (1) to three (3) years to obtain the effective payment of the obligations.

In the case of international arbitration, prior to enforcement, the award must first go through a recognition process before the Supreme Court of Justice or the Council of State (in the latter case, when a public entity or an authority exercising administrative functions is involved). This procedure is mainly regulated in Articles 111 to 116 of Law 1563 of 2012.

Depending on the nature of the arbitration and the authority handling the case (Supreme Court of Justice or Council of State), the recognition process may take approximately one (1) to two (2) years.

If recognition of the international award is granted, its enforcement must proceed through an executive proceeding, which, as mentioned above, may take approximately one (1) to three (3) years.

Yes, in Colombia there are statutes of limitations for initiating disputes. In general, the limitation period depends on the type of dispute being brought.

For instance, in private law disputes, the general rule is a ten (10) year limitation period. However, shorter periods may apply depending on the type of contract involved (e.g., transportation contracts, insurance contracts, etc.) or the specific type of action pursued (for example, consumer protection actions in construction may have a one-year limitation period for disputes related to finishes, or ten years for disputes concerning structural stability).

If the dispute concerns government contracts, the rules on expiration (caducidad) are set out in Article 164 of Law 1437 of 2011. This provision establishes, for example, that as a general rule, claims arising from such contracts must be filed within two (2) years from the occurrence of the facts giving rise to the claim.

Finally, executive actions of a private nature may, in some cases, be subject to a special statute of limitations depending on the type of document in which the right is contained.

When no special limitation period applies, the general rule is a five (5) year limitation period.

Disputes involving multiple parties are common, particularly in cases related to civil liability, whether contractual or non-contractual. It is not unusual for multiple individuals to be sued as co-defendants, either due to joint participation or joint and several liability.

The allocation of liability among multiple defendants depends on the nature of the obligation and the liability regime applicable to the specific case. Generally, the distribution of liability among several defendants will depend on whether joint and several liability exists:

If there is joint and several liability: each of the defendants is liable for the full amount of the obligation towards the plaintiff.

If there is no joint and several liability: the liability will be shared, meaning each defendant will be liable for their respective share or according to their degree of participation.

In Colombia, judges have the authority to determine the degree of liability of each party based on the facts of the case, applying causation criteria.

As for net contribution clauses, it should be noted that these may be contractually included, provided they do not contravene public policy.

Colombian law includes special consumer protection regulations. Therefore, in certain situations, limitations of liability clauses could be considered abusive — for example, if they seek to limit the liability of a producer or supplier regarding obligations established under Law 1480 of 2011. These clauses are commonly found in commercial contracts.

The construction sector in Colombia faces several challenges: The first, undoubtedly, is the change in public housing policy regarding subsidies. The new position of the National Government, aimed at reducing the budget for subsidies for social and priority housing, has resulted in many Colombian families being unable to secure sufficient resources to pay for these homes. Consequently, there has been a significant reduction in their purchase, leading to a decrease in the initiation and launch of such projects. This situation presents an opportunity for regional authorities to implement policies that stimulate demand for VIS/VIP projects (social and priority housing), leveraging municipal and departmental efforts to expand the possibilities of this market. Strategies such as regional subsidies, the application of urban planning and tax incentives, and efficient land management for developers could help overcome this gap and sustainably achieve the necessary production of social housing to address not only the current housing deficit but also the annual new demand required by the country.

Another significant challenge for the sector lies in legal certainty. Excessive regulation and sudden changes in laws, disregarding acquired rights, as well as the constant threat of intervening in territorial autonomy regarding existing land use decisions, pose a continuous risk to investment—not only for the construction sector but also for banks and other stakeholders seeking to participate in the market from a financial perspective. This challenge provides an opportunity to innovate in legal mechanisms to protect the sector, seeking new structures that efficiently address these legal changes. Strategies could include not only securing acquired rights but also fostering public participation in the approval process, ensuring the State acts as a guarantor of rights under penalty of economic liability for their violation.

Colombia is a country with significant infrastructure needs, especially in transportation, as evidenced by its backwardness compared to other territories on the continent. Indeed, the need to modernize and expand mass public transportation systems in the country’s main cities, to modernize our airport network, to further connect our river and maritime transportation (which requires the addition of more ports), to connect the country via rail and highways, coupled with our need for public service infrastructure, makes us an attractive investment center for any national and international company to build all these projects.

Furthermore, the country is at the most opportune moment for growth in tourism, considering our highly competitive physical, landscape, geographic, and climatic conditions compared to our peers on the continent. This has led to increased interest in investing in projects not only in hotels across all categories and classifications, but also in short-term rental housing, specialized retail and services, and a very important entertainment market that is consolidating not only in the country’s major cities but in the regions in general.

Just as it is happening globally, technology is revolutionizing the construction industry in Colombia, improving its efficiency, sustainability, and safety through the integration of sustainable solutions into projects, such as renewable energy systems, energy self-sufficiency, and eco-friendly materials; automating repetitive tasks; and optimizing construction processes.

Companies must adopt these innovations to improve efficiency and reduce costs. Although they initially require a significant investment, the long-term benefits will be greater. Furthermore, investing in training and skills development is crucial to preparing the workforce for these changes. Companies that adopt these innovations will be better positioned to compete in an increasingly globalized market.

The price of materials and supplies in the construction sector has always been a determining factor in the resulting value of homes and of the sector’s finished products in general. However, price fluctuations are currently occurring over much shorter periods of time, making it difficult to make the necessary provisions for preparing budgets and financial closings for projects. In this regard, the industry has had to build legal structures that allow for the recovery of potential losses arising from unforeseen fluctuations in inputs, with the resulting risks of business abandonment due to the buyer’s inability to pay. In this scenario, and in order to face this challenge, the market will have to adapt to these unforeseen and short-term changes through price agreements with time variations, stipulating, of course, conditions that do not affect the legal security of either party; diversifying the sources of materials, adopting technologies that increase productivity, and negotiating strategically with suppliers; all with the aim of ensuring profitability in existing projects and making new developments viable.