Panama Property Checklist

Posted by Tropiland Editor on June 2, 2007 Leave a comment (0) Go to comments

So you’ve found your dream property in Panama and you need to know what steps you need to take to ensure that it is going to be transferred safely and securely in your name (or the name of the legal entity of your choice). We have compilled a list of our top-ten prerequisite checks that will guide you through any real estate transaction in Panama:

1. Title check: If the property is titled (have an “escritura” registered with the Public Registry (Registro Publico), having the title checked is a very simple process. Simply request the “Finca” (lot) number, and have this investigated at the Public Registry. This will show any encumbrances (mortgages or liens) on the property, as well as show the ownership history. It is also useful to confirm the registered surface area of the property, and that the person who is selling the property is the actual owner.

2. Rights of Possession – You cannot “purchase” rights of possession. But you can have them transferred to you. It is particularly important that you check the history of “ownership”, and inquire regarding any disputes. Also, have the rights of possession registered with the local Municipal Government. The contract of the transfer should be done via notary. You particularly need to make sure that this owner hasn’t already transferred his “ownership” to other people before you.

3. Talk to the neighbours – Tell people you’re looking at property in the neighbourhood and ask how they like it and if they know anything about the property or problems in the area. Are there any boundary disputes with the current owner? Are there any issues (availability of electricity, water, cable, internet connections) which you should be aware of? We recommend that you talk to other foreigners that have bought in the area. They probably have jumped through all the hoops and could give you valuable insight.

4. Surveys or Subdivision Maps of the Property – Get a survey if property inspection shows boundary issues may be involved (e.g. fence lines, encroachments, shared driveways), especially in rural areas, or if you’re counting on a certain minimum parcel size for future subdivision or other reasons. Make sure that the fence line actually follows the property boundary. For beach front property with Possesion Rights, ensure that the servey (or “plano”) is done through a reputable surveyor and that the local Government Surveyor (Catastro) have verified the survey. This is particularilly important when dealing with properties that may fall within the “law of 22 meters”.

5. Check out the reputation of the property surveyor – Not all surveyors are fully qualified, and it is difficult to get a good surveyor.Sometimes the surveyor is in cahoots with the property owner, and other times they are simply incompetent.

6. Planning & Zoning issues – Related to the land & surrounding area (e.g. permitted uses, variances, conditional use permits, proposed general or specific plans changes for the area). Especially important if undeveloped or redevelopment area nearby or for special purpose property (home occupations, granny flats, non-conforming uses, etc.). This is especially important if you are in the city or near a natural reserve.

7. Environmental Impact Studies – May impose special restrictions on use, vegetation, deforestation, or other issues. If you are building more than simply a residential home, you need to check whether an environmental impact study is necessary for your project.

8. Building permit & certificate of occupancy history – Especially important for older homes with add-ons or conversions. Check the local building inspector’s office.

9. Soils & Geological studies – Of particular interest are soil percolation tests, especially where you have to put in your own septic system. This will also alert you to earthquake, soils, flood zones, toxic sites, and environmental reports.

10. Reputation of builder, seller and real estate professionals involved – Talk to others, e.g. realtors, attorneys, the local city council – Ask how long they have been in the community and how they deal with problems which might come up. Are they reputable or have they been involved in scandals previously? If so, what kind of scandal? Look on the internet.

Generally speaking, Due Diligence is a must when looking, negotiating and purchasing property in Panama. We also recommend that you retain the services of a qualified attorney or legal professional that will guide you through the process of background checks, government databases etc.