Natural persons or legal entities may invest in vacant lands.

In accordance with the provisions of article 27 of Decree - Law 902/2017, whereby measures that facilitate the Comprehensive Rural Reform contemplated in the Final Agreement of the armed conflict in Colombia are adopted, a transitional regime is established in the area of vacant lands which purpose is the application of Law 160/1994 in its entirety with regard to the allocation of vacant lands to people who occupy this type of properties prior to May 29, 2017.

In this context, last August, the National Land Agency (ANT) issued Agreement 028/2017 (Agreement 028), which established the applicable rules in terms of extensions and the conditions for the award of vacant lands. Therefore, Agreement 028 determined the guidelines that allow the economic exploitation of this type of lands through exploitation schemes or contracts, the foregoing, when “the subject of the agrarian reform has no possibility of developing it alone”.

Additionally, the rules for the determination of the extension of the Family Agricultural Unit applicable to the subjects of the agrarian reform are established.

Due to the above, the National Land Agency established, in Agreement 028/2017, the conditions that must be observed by the beneficiaries of exploitation contracts, which include:

  • The people included in the Register of Land Use Subjects (RESO) will be considered as beneficiaries of these contracts.
  • That they meet the requirements stipulated in the regulations in force to hold the title.
  • That they lack economic capacity for the development of productive plans.

Consequently, the beneficiaries of exploitation contracts must carry out the economic exploitation, develop a gradual reconvention plan or apply mechanisms that make more technical and increase the production of land; for this purpose the following elements will be taken into account:

  1. The economic exploitation must be carried out, as a minimum, on two thirds of the area occupied by agricultural, livestock, aquaculture or forestry activities, provided that they meet the applicable zone planning regulation. Additionally, it must comply with the environmental determinants required by the competent environmental authority.  
  2. The economic activity must be carried out based on the environmental determinants set by the competent environmental authority, so that the suitability of the soils will be maintained and deforestation processes will be avoided.

Failure to comply with the above requirements will be grounds for the ANT to refrain from making the award requested.

On the other hand, Agreement 028 established the guidelines for accessing the exploitation contract, which are applicable in events in which the occupants authorized for the awarding of the vacant land lack the financial capacity or the means to develop and maintain the economic exploitation of the vacant land; consequently, interested parties may partner with natural persons or legal entities for the purposes set forth in the rule.

In that regard, the occupants authorized for the award will request the National Land Agency to identify a possible partner and serve as an intermediary between the parties for the eventual execution of the agreement, which purpose will be to support and finance profitable productive projects.

The foregoing, notwithstanding the fact that those who meet the requirements for the award of the land may declare, to the ANT, their intention not to benefit from the exploitation contract.

In relation to the exploitation contract, it is necessary to note that this will be the instrument whereby the intention of the lawful occupant will be formalized for the awarding, if the financing and sustainability of the project are achieved and, in turn, the intention of the partner to invest in this type of plans. For this formalization to take place, the contracts must be signed between the National Land Agency and the respective partner.

However, the rule is clear when stating that the execution of the exploitation contract does not give the partner the capacity to exploit the vacant land, since the activity will be carried out directly by the occupant; however, whoever invests in the project will participate in the profits generated from it.

On the other hand, Agreement 028/2017 determined the elements that these contracts must contain, besides the general aspects involved in any contract. Some of these aspects include: 

  1. Demarcation of the productive project, which will include:
    • The grace period for the distribution of profits while the project generates benefits.
    • Exact delimitation of the contributions made in cash and in kind.
    • Percentage distribution of benefits.
  2. The express certificate that prevents the partners from being awarded the vacant land or from owning the land of the project once the award is made to the occupant, for the effective term of the contract plus seven years after its termination. 
  3. The administrative expiration clause in the event that any of the parties fails to comply with the obligations arising from the contract in relation to the ANT. 

Additionally, Agreement 028 stipulates that, in consideration of the type of productive project developed by the parties, exploitation contracts may be valid until the exploitation phase prior to the award in the property of the occupant or, if deemed convenient, they may be extended to a post-award phase.

If the validity of the exploitation contract extends to a later stage of the award, the ANT will cease to be a party to the contract, notwithstanding the fact that this entity may continue supervising the contract; likewise, it reserves the power to apply the administrative termination clause  and enforce the policy in the case of non-compliance.

Finally, Agreement 028 o/2017 prohibited the execution of exploitation contracts on properties that are involved in restitution processes as established in Law 1448/2011, or on properties that are involved in any litigation pending judgment. 


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