20 years

What to check when buying property in Panama

If you’re thinking of buying property in Panama, you may find the following checklist handy. Print this page and take it with you.

  • Checking the title on property is quite straightforward. The public registry has records of all titled property organized by finca (lot) number. The register shows the size of the lot, ownership, and whether there are liens against the property or mortgages on it. This will show whether the person selling the property is the real owner.
  • Rights of possession cannot be bought or sold, but they can be transferred. Before closing such a deal, though, make sure the neighbors are in agreement with the sale, the boundaries and the lot survey. Check the property’s history, and whether there have been disputes between ‘owners’ or others. Right of possession should be registered with the municipal authorities. Have a lawyer draw up the transfer, and make sure that there are not already six other ‘owners’ to whom rights have been transferred.
  • Speak with neighbors and let them know you are buying property in Panama and looking in their area. Do they know of boundary disputes? Is there adequate water and electricity? Can you get cable or Internet connections? Be especially wary in Bocas del Toro, where there is very little titled property.
  • If it seems as though there might be boundary problems, especially in rural areas, get a proper survey carried out. Look for fence lines where you don’t expect them, or for things such as shared driveways.
  • Check the qualifications of surveyors when buying property in Panama. Not all of them are fully trained. I have read that it is difficult to get a good surveyor in Bocas, for instance. Some surveyors are merely incompetent, others might be in league with the seller.
  • Check for potential planning and zoning issues. Are changes proposed in the area? Be vigilant in cities and near nature reserves. Will you have problems constructing the type of building you propose to erect? When buying property in Panama, make sure it is exactly what you want and that it will likely stay that way.
  • Are there environmental issues? Issues including protection of vegetation and trees may create impediments. If you plan to build something other than a home, you may need an environmental impact study. This will not affect you if you are buying property in Panama to build a home.
  • Make sure you get a building permit and certificate of occupancy history from the local building inspector’s office if you plan additions or conversions to an older home.
  • If you will need a septic system, get soil percolation tests carried out. A soil and geological study will warn of earthquake risk, flood zones, soil condition, toxic sites and existing environmental reports.
  • Home inspection, even of new homes, can reveal defective construction of workmanship. When buying property in Panama, a home inspection only makes good sense.
  • Make sure, if you are buying real estate that is already built, that you ask for blueprints and specifications.
  • When buying property in Panama that includes membership in a homeowner’s association, find out about covenants, conditions and restrictions.
  • Get copies of certification and warranties for major systems, such as the roof, electrical and plumbing systems.
  • Make every effort to discover the reputation of the builder, the seller and any real estate professional with whom you deal when buying property in Panama. Find out how promptly and willingly they deal with problems. Are they reputable. Have they been involved with scandals and, if so, what kind? Talk with lawyers, realtors or community officials, and check on the Internet.
  • Be wary of ‘creative’ financing, seller financing and adjustable rates. These things may be helpful, but understand the financing documents thoroughly and don’t sign them until you do.
  • Don’t rely on the seller’s transfer disclosure statement. Verify the information through your own investigation and inspection, when possible.
  • Visit schools, parks, medical facilities and any other public or private facility you may need to rely upon.

Work through this list and any other items that may be important to you before putting your name on the dotted line. Buying property in Panama should then be a lot less dangerous than it otherwise could be.