27
Apr
2009
Panama Real Estate Possession Rights: Buyer Beware
Not all properties in Panama are in the private domain. Many beachfront properties, islands, and real estate in special tourism zones and historically protected areas are owned and managed by the national or local municipal governments. In those areas, possession rights are granted for a determined period of time. Two such protected areas are the archipelago of Bocas del Toro (mouth of the bull), which to many visitors fits the description of tropical paradise, and Portobelo, a beautiful harbor on the Caribbean visited by Columbus and the final resting place of Sir Francis Drake. Some beachfront property is available for purchase but is subject to the law that all beaches are public. All beachfront properties must provide a right of way starting twenty-two lineal meters from the highest tide to the property line.
Because of the lack of uniformity regarding the granting of possession rights, possession rights should be approached with caution.
When considering properties located in such areas, you should ensure that the possession right has in fact been granted by the relevant national or local government authorities and that the length of the time right is adequate for the purpose of the investment. The possession right should also contain a complete description of the property, including boundaries, encumbrances, and any other significant features or details (with an accompanying complete blueprint drawn and approved). You should make sure that any anticipated construction, activity, or improvement is acceptable by the national or local government. Transferring a possession right can take up to six months, depending on many factors, such as the date of recognition of the possession right and inspection by the granting entity.