Titling rights of possession (ROP) land can be relatively straightforward or may require a patient wait-and-see approach depending on the type of land.
- PRONAT titles whole districts at a time under 2 separate programs. In both cases, the process is automatic and there are low associated costs.
- The decision to title agricultural land is a lot easier than the decision to title coastal land. Agricultural land only requires the desire and a little bit of time and money.
- It’s a better idea to hold on to ROP in coastal areas and wait for the titling process to improve or to wait until the property gets titled by PRONAT.
Rights of possession are a foreign concept that leave many international investors ill at ease. For many, it is just not worth the effort to learn and do what is required to acquire and maintain a healthy ROP claim. It’s quite possible to possess and sell ROP land just like titled land, but someone who is uncomfortable with ROP should make the effort to title the land for the added security and comfort.
Currently the titling situation depends on the location of the property.For agricultural land, obtaining title is relatively straightforward. For oceanfront land, because of the new law, patience is probably the prudent approach.
Titling agricultural land is straight-forward. Agricultural land is all land except islands, national parks, indigenous territories, shores of rivers and a strip of land along the ocean shore between the high tide line and 200 meters inland.
Title is obtained from the office of Agrarian Reform. A surveyor from Agrarian Reform needs to inspect the land and issues title if there are no other occupants or possessors. There are a number of different options when titling the land, but typically an application requires the following:
- Power of attorney.
- A copy of your passport and resident ID, if applying personally
- A copy of the survey of the parcel.
- A detailed description of the parcel.
- Authenticated affidavits from the neighbors stating that they have no complaint with the borders.
- Corporations also need to submit a Public Registry Certificate.
The process usually takes about 7-9 months and costs about $3500 in legal fees plus a per hectare charge for the land that varies depending on the type of application. It’s best to start by contacting a lawyer experienced in titling agricultural land.
Catastro, under the Ministry of the Economy and Finance, also titles agricultural land. However, it seems like Catastro is being superseded by other bodies and it may be a good idea to try other options.
Titling oceanfront property is more of a challenge. There is a mechanism to title oceanfront property under Law 2, 2006, otherwise known as the Island Law, that allows people to title ROP holdings from before 2006. [/column] [column width=”33%” padding=”5%”]
Unfortunately, the Island Law has been applied unevenly and, in practice, it is virtually impossible for to get title through the Island Law. Applicants have made significant investments into the process without return.
PRONAT titles whole districts at a time under 2 separate programs. In both cases, the process is automatic and there are no associated costs.
The original program started in 2001 and is active in many of Panama’s prime locations.
The more recent program, established under Law 23, 2009, is so new that there hasn’t been enough time to witness its practical implementation. The plan is to transfer titles registered with Catastro to PRONAT and making PRONAT the main regulator of the titling process.
It’s prudent to have an attorney contact PRONAT when they start titling an area just to make sure everything goes as smoothly and quickly as possible.
Alternatives to Titling
With the deficiencies to the process of titling oceanfront property there are alternatives worth exploring until the titling process improves.
It’s possible to build and obtain title to a structure on the land under Panamanian law.
This will secure part of your investment and will further strengthen an ROP claim. It’s best to contact a Panamanian lawyer familiar with titling structures to get the process started.
Another option, although a bad one, is to attempt to obtain a concession under the Island Law.
Concessions are only available to developers within tourism zones, as designated by the Ministry of Tourism, and are granted only for a limited period of time. Getting a concession requires a significant investment in planning, time and money. However, just like the titling process under the Island Law, there is virtually no chance of success.
To Title or Not To Title
Obviously the decision to title agricultural land is a lot easier than the decision to title coastal land. Agricultural land only requires the desire and a little bit of time and money. If PRONAT is already titling the area, waiting for them to do it is also worth considering.
Coastal land requires desire and lots of money and even then the chances of immediate success are low. The consensus has already emerged amongst Panamanian professional classes that ROP land needs to be fully titled and successive governments have attempted to improve the titling process. It might be a better idea to hold on to ROP in coastal areas and wait for the titling process to improve or to wait until the property gets titled by PRONAT.
We have already seen a new law since we wrote this article. With Law 80, Panama has begun titling coastal land and islands. The current law provides a title for free on the first 5 hectares (12.5 acres) and a pricing table for larger tracts. The first regions seeing titles are Bocas del Toro & Las Perlas.