For the most part, Panama offers a safe and secure environment to buy and sell real estate. Unfortunately, there are some loop holes in Panama’s laws that can leave a person homeless.

Panama has a few different types of properties, the two most common are titled and right of possession. Titled land is the most simple and safe way of owning property in Panama. Right of possession property is land that you do not own the title to, but you have been granted the right to live on it or build on it. Right of possession properties are most common in the coastal areas of Panama.

Usually people who own possession rights have few problems with that legal document. They can sell their land and the rights to a second party, and the land can be built on with no problems. A recent incident in the Pedasi area has lead some people to be very worried about the security of owning a possession rights property.

Playa El Toro, just a few weeks ago, had 26 modest homes standing on properties along the shoreline. One of those homes was owned by a friend of mine who is a US citizen, but the other 25 owners (or possession right holders) are Panamanian families. My friend had not visited his house on the beach for about a week. When he returned, his house and the 25 others, were gone. A demolition crew had moved in and flattened all 26 houses on the beach.

Apparently a battle had been going on between the residents of the beach, provincial government and a wealthy Panamanian family who owns the title to the land behind these beach houses. The ROP owners became involved in a court battle once it was discovered that the prominent Panamanian was trying to sell his land and the beachfront land in front to international developers. The 26 ROP owners were told by the supreme court of Panama that they do in fact, own the possession rights and they can keep their properties.

Unfortunately, in Panama, money talks. Some of the wealthy parties involved were able to “pull some strings”, and submit permits to demolish these houses. The permits were missing two necessary stamps, basically rendering the permit invalid. Whoever was in charge of the demolition simply overlooked the missing stamps and tore down the 26 houses, some which have been in a family’s possession for 30 years.

When a situation like this occurs in Panama, it should always serve as a reminder that the laws in Panama are not like the laws in North America. You are much more likely to find success if you are a wealthy or well connected person, but if someone more important comes along and wants something you have, be prepared to hand it over.

These former property owners from Playa El Toro, are continuing their legal battle in the hopes of regaining their land. Most are not optimistic.

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Filed under: News, Real Estate on November 11th, 2008