The Ministry of Finance and Construction gives free rein to the real estate annuity


Laura Fernanda Bolaños R. – lbolañ[email protected]

The Ministry of Finance, Housing and the Financial Regulation Unit (URF) announced, through an official press release (download the presentation at the bottom of the note), that the green light has been given to the real estate annuity which aims to “achieve the purpose pursued by the operation known as reverse mortgage, in the sense that it will allow Colombian families to use their real estate assets to increase the habitual income of the elderly “.

Jonathan Malagón, Minister of Housing, said that this will be a tool that “can be offered by life insurance companies. As part of the transaction, as agreed in the insurance contract, policyholders will have the right to withhold ‘use and enjoyment of the property until the death of the last one ”.

Similarly, it was explained that it will be a figure that all families will have access to, there are no age limits to apply and the family concerned will have to “prove ownership of a property, and will transfer as payment of the premium price said the property when the contract is signed. “In addition, the amount of the periodic rent will be determined by each insurance company and variables such as the appraisal of the property and the age of the beneficiaries will be taken into account for the rent amount lease.

Felipe Lega, director of the URF, for his part stated that this aid “will offer an alternative so that Colombian families can generate additional income from their real estate assets, with the possibility of maintaining the rights of use and enjoyment of the property.”.

The portfolio presented an ABC of how this option will work and, in turn, clarified that the regulation is still missing, which will be borne by the Financial Superintendency and will be known in the coming weeks. Among the issues that need to be regulated are some details such as those that have to do with how the right of withdrawal will be exercised, how it will be ensured that people keep the property in good condition, among others.

In turn, stakeholders should keep in mind that this possibility will not be present in all insurers, as it will depend on the segment they manage.

In line with this, the URF stressed that “the 1398 decree contains a solid and comprehensive development in terms of the advice that financial consumers should receive and the duties that insurance companies have in terms of the development of such advice. the decree establishes that it is up to the insurance companies to act with the highest standards of prudence, diligence, transparency, honesty, loyalty, adequacy and professionalism typical of their business. This product. Furthermore, the decree indicates that the responsibility to offer advice, in the terms contained in the decree, it corresponds exclusively and cannot be delegated to insurance companies “.


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