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Real Estate Purchase Contract
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The importance of hiring a Panama Property Lawyer in a real estate transaction
o acquire Right of Possession (ROP) or buy Titled Property in Bocas del Toro (Islands) and Panama in general we recommend to follow these steps:
1. Hire the service of a Panama property lawyer.
Panama’s real estate landscape has its particularities and we strongly recommend to hire the service of a Panama property lawyer familiar with the matter. We at Anaya & Associates have over 10 years of experience assisting investors when buying Real Estate in Bocas del Toro area, therefore we could give you an accurate advice once you have decided to buy Land in Bocas del Toro.
2. Draft and Review of “Promissory Purchase/Sell Contract”.
Both parties should always agree to the clauses and/or conditions of the final closing. The purpose of signing the PPC is to tie up the deal, to secure the property and provide enough time to perform a due diligence on the property, as well as to coordinate payment arrangements for the closing.
3. Due Diligence.
Procedures on ROP are more complex since there is no centralized database of information on possession rights properties. Therefore, buyers of possession rights should take extra precaution during the due diligence process. This is where your Panama property lawyer stands out. Generally, the extent of the due diligence investigation that one can realize on ROP is the following:
A: Verification of Certification of ROP: The certification of possession rights should be validly issued from the local competent government authority (Chief of Police / Mayor) and should contain the possessors’ name, correct description of the property in terms of location, size (area), limits, boundaries, neighbors and time of possession.
B: Verification of Survey: The survey should be prepared and signed by a professional licensed surveyor, identifying a drawing of the shape of the property, exact area, field information, (possible with GPS points), the possessors’ name, location and reflecting the same information in accordance with the certification of possession rights.
C: Inspection: The Possessor should have physical occupation (improvements) of the ROP land and there should not be opposition by third person, or boundaries disputes. It should be in good faith, and acknowledge by the neighbors and local authorities. This inspection should be realized by a surveyor who can identify the points and marks of the property and confirm with neighbors ensuring that there are no future boundary conflicts.
D: Neighboring Property Owner’s Statement: After the inspection has been performed and boundaries lines are confirmed, it is very important that you get an affidavit or declaration from your neighbors where they give their “good neighbor confirmation” that there are not boundaries lines conflicts, dispute or pending claim on the land.
E: Permitting and Zoning Verification: In some cases, if the buyer’s 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 that may prohibit those activities in the area.
4. Buy-Sell Contract: The final balance is paid at the signing of the final buy-sell contract, or in some cases, if an escrow agent is used, once the possession right certification is actually transferred or changed to the buyers’ name.
5. Possession Rights Certification Transfer: The possession right over the property is officially transferred to the buyer once the possession right certification is transferred to buyers’ name, which is done immediately after the buy-sell contract is signed by each party. Contracts relating with the purchase of rights of possession cannot be registered at the public registry, therefore, they can only be authenticated by a public notary.
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