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Autor: Steve Rich

The Difference between Titled and Rights of Possession Properties

There is a lot of confusion when foreigners look to buy real estate in Panama. That’s because some sellers have actual “title” and others only sell their rights to “possess” a property. Moreover, deeds of title are different in Panama from the United States or Canada.

Let’s clear up this confusion. Panama recognizes three different types of real properties: Titled, Rights of Possession, and Concessions.

1. TITLED PROPERTY

Titled property is similar to “fee-simple” title in the United States and is the most secure form of real property ownership in Panama. The Constitution of the Republic of Panama guarantees the right to own private property. Titled properties measured and properly recorded in Panama’s Public Registry office verify one’s real property “title”. These verifiable, guaranteed rights allow banks to issue mortgage loans for titled properties by registering liens against one’s title as collateral.

Purchasing titled property is simple by following these procedures:

a) Negotiation: If you are dealing through a real estate agent, make sure all of the terms and conditions are clear and in writing. Make sure that the written contract clearly sets forth the payment amounts and dates. If you are dealing directly with the seller, all terms should be clearly understood before hiring an attorney to prepare the written contract.

b) Promise to Purchase Contract: Instead of a Purchase & Sale Agreement (common in the United States), the buyer and seller initially sign a Promise to Purchase (the property) Contract. A small down payment when signing a written Promise to Purchase Contract secures the property while the buyer conducts a title search to verify the seller’s ownership. In the meantime, the purchaser arranges for financing (if not paying fully in cash) and setting up a corporation (if applicable) to hold title. Register this contract at the Public Registry to prevent the seller from selling the property to another party prior to the Closing.

c) Title Search: Once you sign the Promise to Purchase Contract, you should hire a competent attorney to conduct an investigation of the seller’s title at the Public Registry. The lawyer will also verify that the property is free and clear of any encumbrances, liens, and other issues affecting transfer of title. Title Search also includes reviewing the catastral survey map. In many cases, a professional surveyor will verify the map points on the property to avoid future boundary conflicts. Finally, have your lawyer verify the main utility debts (water & sewer) with the government agency providing them (IDAAN).

d) Buy-Sell Contract: Upon conclusion of the Title Search, the parties sign a formal Buy-Sell Contract (also known as Public Deed of Title Transfer). The escrow agent pays the seller’s final balance and transfers title into the buyer’s name. I highly recommend using an established Escrow company to protect both parties.

e) Title Transfer: This process is known as the “Closing” in the United States. Property ownership officially transfers to the buyer when both parties sign the Buy-Sell Contract (Public Deed of Title Transfer) and registers it with the Public Registry. If title is in a corporation’s name and the buyer chooses to, the seller merely transfers the corporation’s sharesto the buyer without transferring title. In order to facilitate the Closing by assuring the seller will be paid and the buyer will receive full Title; the attorney prepares a “Promise To Pay Letter” from a local bank. This letter guarantees full payment to the seller when the Title Transfer registers at the Public Registry.

Problem Solved: The “Promise To Pay Letter” solves a typical Closing problem. Sellers usually require full payment when they sign the Public Deed of Transfer prior to the actual registration of Title Transfer at the Public Registry. There have been instances when the seller received full payment, but the Deed was not registered (or the government rejected the deed). The buyer did not become the new owner because there was no record of the title transfer in the Public Registry. The “Promise To Pay Letter” guarantees payment to the seller by a local bank while assuring the buyer that payment is not made until actual transfer of title.

2. RIGHTS OF POSSESSION

This is similar to “squatter’s rights”. This is where government owned property is “occupied” by a Panamanian (or entity) over time. Possession rights granted to the squatter through a simple certification document issued by either municipal mayors, sheriffs, or other government agencies such as the Agricultural Reform Department (Reforma Agraria). There are no property taxes because the possessor does not own the property. However, any structures built on the property may incur municipal and/or national taxes if they are registered. Possession rights become titled by purchasing the property from the government. However, certain coastal areas, national parks, or islands are “protected properties” where the possessor can apply for an administrative “Concession” over the land guaranteeing use of it.

To acquire possession rights over a property, it is important to follow these steps:

1. Promise to Purchase Contract: Pay a small down payment at the signing of the Promise to Purchase Rights of Possession Contract securing the property and providing enough time for the due diligence. During this time, the buyer coordinates payment arrangements for the closing. Contracts for the purchase of Rights of Possession cannot be registered at the Public Registry; therefore, a public notary should authenticate them.

2. Due Diligence: Unlike titled property that is easily verifiable through the Public Registry, the due diligence procedures on Possession Rights property is more complex. Panama has no central database of Possession Rights properties. Therefore, buyers of Possession Rights should take extra precaution during the due diligence process. Generally, the extent of the due diligence investigation that one can realize on Possession Rights property is the following:

a. Verification of Certification of Rights of Possession: The Certification of Possession Rights validly issued from a competent government authority containing the possessors’ name and correct description of the property in terms of location, size (area), limits, boundaries, and neighbors on all sides.

b. Verification of Survey: A survey stamped and signed by a professional, licensed, surveyor engineer. This identifies the possessors’ name, location and reflects the same information in accordance with the Certification of Possession Rights.

c. Inspection: The main elements to verify are: physical occupation, no opposition by third persons, and good faith. Your surveyor identifies and marks the points of the property confirming these points with the neighbors to ensure that there are no future
boundary conflicts. This requires a physical inspection. In addition, the property should be marked and fenced, delineating
the boundaries.

d. Permit Verification: In some cases, if the buyers’ intentions are to build a certain type of structure or project on the Possession Rights property (for example, a marina, port, hotel, airstrip, etc.), it is necessary to verify if there are any national or municipal regulations prohibiting those activities in the area.

3. Buy-Sell Contract: After verification, the seller expects the final balance at the signing of the Buy-Sell Contract. If you use an escrow agent, payment of the final balance is made once the Possession Rights Certification transfers to the buyers’ name. Contracts for the purchase of Rights of Possession cannot be registered at the Public Registry; therefore, a public notary should authenticate them.

4. Possession Rights Certification Transfer: The possession rights over the property officially transfers to the buyer in the Possession Rights Certification. This occurs immediately after each party signs the Buy-Sell Contract. If the possession rights are in a corporations’ name, the buyer agrees to purchase the corporations’ shares. Then there is no transfer of Possession Rights Certification, only a transfer of the corporation shares to the buyer.

3. CONCESSION PROPERTY

Concession property is similar to a land lease arrangement, common in Mexico or Hawaii. This is where the government grants a Concession to an individual or an entity for a specific purpose, such as a real estate development, hotel, or marina. Most Concessions in Panama are granted for a maximum of 20-year (renewable) periods. However, some Concessions are granted for up to 40 years (renewable) in specially designated areas such as the Amador Causeway where there are commercial and condominium developments currently being sold. Concession Property exists in special coastal or other governmentally protected areas where actual title is prohibited by law. In many cases, real estate developments on Concession properties offer investors time-share or fractional ownership arrangements, which are very common in Mexico and other resort-type coastal areas around the world. Unlike Possession Rights property, the government through a specific contractual agreement guarantees Concession property. Therefore, there is very little risk to the investor. Title insurance companies generally offer title policies for Concession properties.

ACQUIRING TITLE OVER POSSESSION PROPERTIES

“Titling Process” is the official administrative procedure to purchase Rights of Possession property from the Panamanian government. You are buying the property from the government and registering the Buy-Sell Contract with the Public Registry. Island properties cannot become “Titled” according to the Constitution of the Republic of Panama (only mainland can become titled). However, there are some titled Island properties registered before the Constitutional restrictions existed which can be sold. All beachfront titled properties require a 22 meter set back due to high tide.

TITLE INSURANCE

Even though Panamanian laws are setup to protect foreign investors, you should always take precautionary measures to insure your investment. I recommend Title Insurance for every property transaction. This is readily available in Panama through major international title insurers, such as LandAmerica Lawyers Title and Stewart Title. Title policy costs are minimal and the peace of mind is definitely worth the cost.

In Conclusion: Now that you have learned the different types of real property rights in Panama, you can take steps to protect your investments. Look for “titled” properties first. Make sure that you use a competent real estate lawyer to prepare your Promise to Purchase Contract, to conduct a thorough Title Search, and to prepare your Buy-Sell Contract. Hire a good Escrow company to ensure that all documents registered with the Public Registry before making final payment.

If you purchase Rights of Possession, hire a competent real estate lawyer to prepare your Promise to Purchase Rights of Possession Contract, conduct Due Diligence, and to prepare your Buy-Sell Contract. Hire a professional surveyor to verify all-important facts. Protect your original documents from loss because they will not be registered.

Obtain Concession rights for using government property whenever you can. Again, hire a knowledgeable real estate lawyer to prepare your contracts.

Finally, purchase Title Insurance to protect your investments.

With these precautions, you should be able to enjoy full rights of ownership or possession of your new real property purchases.

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Autor: Brittney Foster

Are you an individual who is looking for a relaxing place to retire? If not, are you just someone who wants to relocate to a beautiful and relaxing place of the world? If so, have you discovered Panama yet? If you haven’t, what are you waiting for? After a close examination, you will find that Panama not only has everything that you want, but also everything that you need.

When it comes to relocating, no matter where you wish to relocate to, you need to find a place to live. When relocating, most individuals choose to buy, instead of rent. If you are serious about relocating to Panama, you are advised to thoroughly examine the real estate market and everything that it has to offer. With this examination, you will likely find that just about any type of home or property can be purchased in Panama. Essentially, this means that whatever you are looking for, there is a good chance that you will be able to find it.

When it comes to Panama real estate for sale, you will find that one of the most popular types of real estate listings includes listing for condos. In Panama, especially in larger cities, such as Panama City, you will find a number of condominiums. These condominiums allow you to purchase a living space inside of them. This living space can be as small as a few rooms, or as large as a few floors, the choice is yours to make. As previously mentioned Panama condos are popular in larger cities. If you are planning on working in Panama or enjoying many of the popular vacation destination hotspots, you will enjoy the central location of many Panama condos.

In addition to Panama condos, you will also find traditional homes. These homes are not to be confused with vacation rentals, which are completely different things. Panama homes are similar to homes located anywhere else in the world; they are homes in which someone tends to reside in all year long. With the popularity of Panama retirement, the sale of these homes has skyrocketed in recent years. In fact, Panama retirement is rapidly increasing in popularity, so much that new home construction projects have started to develop.

Panama land is also just as popular as condos or homes. In fact, Panama properties are often considered “hot sellers.” The land available for sale in Panama tends to vary. There is land that is available for sale in country areas, as well as popular vacation destinations. Despite the difference in locations, Panama is a beautiful place to live; therefore, no matter where your Panama land is located, there is a good chance that you will have an absolutely remarkable view.

Although, as previously mentioned, a large number of individuals travel to Panama after they have retired, a large number of other individuals are just looking for new opportunities in beautiful places of the world. If this is the case, you may not only be looking to find a home, condo, or land, but you may also be looking for commercial opportunities. In Panama, you will find a large number of these opportunities. At any given time, you should be able to find numerous Panama real estate listings that include commercial buildings or commercials spaces. As Panama continues to increase in popularity, as a place to live, as well as a place to vacation, you will find that many businesses have an unlimited amount of potential to succeed in this area.

Once you have decided that you would enjoy a move to Panama, and you know which type of Panama property you would like to purchase, you will need to make another decision. That decision involves the purchase of that property. Your first thought may be to contact a local Panama real estate agent. While this is ideal, you have another alternative. If you have never been to Panama before, you are advised against relying solely on the recommendations of others, including real estate agents. Instead, you will want to see and feel Panama for yourself. You can easily do this with Panama Real Estate, also commonly known as New World Real Estate.

New Real Estate is not only known as a real estate company, but they are also, in a way, known as a travel agency. With New World Real Estate, the focus is not just placed on properties, but on Panama as a whole. With guided real estate and investment tours, you can not only experience Panama and everything that it has to offer, but you can also mix a little bit of pleasure with it. One of the most common reasons why Panama is such an amazing place to live is because of its beauty. For that reason, it is only fair that you get to experience that beauty at all times, even when shopping for your next real estate purchase.

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Autor: Sandy McBride

ave you ever wanted to live in an area that is affordable, safe, popular, and beautiful? If so, you are urged to examine what Panama can do for you, if you haven’t already done so. After this examination, you may very well find yourself looking to purchase property in Panama, whether that property be a home, a condo, a piece of land, or a business.

Perhaps, one of the easiest ways that you can go about familiarizing yourself with Panama is by using the internet. Online, you will find a large amount of valuable information. This information may have a focus on Panama real estate, the economy, tourism, the employment outlook, as well as the local school systems. As nice as it is to research Panama online, there is only so much that you can learn and see from the comfort of your own home. For that reason, you may be interested in scheduling a visit.

When it comes to scheduling a visit to Panama, there are many individuals who make a mistake. There are some individuals who place too much of a focus on a vacation, instead of examining the Panama real estate market. However, there are also many individuals who place so much of a focus on the Panama real estate market that they forget to have fun. You are urged not to be one of those individuals. If properly done, you should not only be able to examine the real estate in Panama, but you should also be able to enjoy yourself as well. You can easily do this with professional assistance.

Professional assistance; if you are wondering what type of professional assistance you should be seeking, you are not alone. Many individuals automatically think of real estate agents while others think of travel agents. While they are both ideal for a trip to Panama, you shouldn’t have to choose one or the other; you should be able to choose both. Unfortunately, this may not be as easy as you would believe. Despite the fact that many companies could benefit from merging Panama travel agencies and Panama real estate companies together, very few do. That is except for New World Real Estate.

Although New World Real Estate is most well-known for being a top real estate company, that is not all that they are. The staff at New World Real Estate also has over three years experience in the travel industry, specifically the Panama travel industry. Although this may not seem important right away, it is extremely important once you think about. The travel industry and the real estate industry, in Panama are closely related. That is why a focus isn’t just placed on real estate in Panama, but it is also placed on the area as a whole. To do this, vacation tours, with a touch of real estate are offered.

With the vacation tours, offered in association with New World Real Estate, you will not be one of those people mentioned above; the people who focus either too much or too little on real estate or having a good time. With a Panama tour, you can enjoy the best of both worlds. This includes the close examination of real estate properties, as well as exciting adventures, which are commonly found on most family or adult vacations.

When on a Panama tour, one that mixes business with pleasure, you will get to examine the Panama real estate market, as mentioned above. This examination may include inside information from those who are familiar with the real estate market, as well as those who live in the area. In addition to examining Panama properties that are for sale, on paper, you will also likely receive tours of the area. These tours typically not only include tours of Panama City, but tours of the beach areas, as well as the mountain areas. These are areas where numerous Panama properties can be found for sale

As previously mentioned, it is important to examine the real estate market in Panama, especially if you are interested in residing there, but you will also want to enjoy yourself. That is why a Panama vacation tour, with a touch of real estate, is beneficial to you. In addition to examining Panama properties, you will also get the opportunity to enjoy numerous adventures. These adventures may include, but are in no way limited to, white water rafting, snorkeling, scuba diving, as well as boat tours. In addition to having a fun time, you will also be educating yourself on Panama and the adventures that you could partake in, should you decide to relocate to the area.

If you are interested in further examining the Panama real estate market, or if you would like more information on Panama tours, you are advised to contact New World Real Estate. A company representative would be more than willing to assist you by providing you with more information or by answering any questions that you may have.