In Panama, the term Derecho Posesorio basically means right of possession, which is a more familiar term for most foreign investors. Derechp Posesorio is really a kind of land reform that came along back in the 1960’s while under the leadership of General Omar Torrijos, the father of Panama’s Martin Torrijos.
For the rights of possession, the original purpose of the land reform was to give Panama’s farmers, who had little resources but worked the land without having the title, some initial form of legal right to the land that they were farming.
Regarding real estate in Panama, the biggest difference between rights of possession and having the title is that with the title you’ll have a registered deed in the public registry, which of course eliminates all the questions that would come up regarding ownership of the real estate in Panama. Basically, with the title nobody can contest the ownership of land. In addition to this, banks usually do not give out loans for land that has right of possession.
It’s important to know that it is possible to title land that is owned through rights of possession, but this method of acquiring land does come with a certain level of risk. However, if done right this method of obtaining real estate in Panama can be a very economic way to go about it. There are a number of steps required to title land that is own through rights of possession.
Firstly, the land with the right of possession status has to be surveyed and it has to have the boundaries formalized by a licensed surveyor. Second, a formal request needs to be presented to the neighbors of the land in question and signed by them. Third, after all the neighbors have signed off on the property with rights of possession, the Agricultural Reform Office (Roforma Agraria) must do a complete and formal inspection of the property in question. Fourth, after the inspection has been approved, and after all the neighbors have been able to confirm the boundary lines, the agricultural reforms office will have to emit a resolution. Fifth, the value the government sets forth for the land must be paid. This value of course will depend on the location of the land. Lastly, the documentation for the land is promptly sent to the Public Registry to finally receive the title.
All in all, the process of receiving a title for a land you wish to own from rights of possession status usually takes somewhere between six and eight months, and it is a right that is solely reserved for Panamanian Nationals.
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