Chiriqui Coastal Real Estate has just opened another office, in David. We need an experienced sales professional, preferably with a real estate background, but will consider someone with other sales experience. Must speak English fluently.  Ability to speak Spanish is a plus, but not required. Compensation by commission, specifics to be negotiated.

Please email Allen with your resume: allen@chiriquicoastal.com

Allen Rosen

The new law for titling coastal and island right of possession properties (which started out as Ley 71 before it morphed into Ley 80) was signed into law by President Martinelli on the last day of 2009.

In my humble opinion, Law 80 is much inferior to Law 23, which the previous Torrijos administration passed into law only a few months before leaving office. However, Torrijos used Law 23 to title a number of huge properties at remarkably low prices for some of his friends, before ordinary people were allowed to title anything, and that gave the Martinelli government an excuse to kill Law 23 and bring in their own titling legislation.

Though far from perfect, Law 80 is better than nothing, and nothing is exactly what we have had for several years in Panama with respect to titling right of possession properties. 

The major points in Law 80 are these:

• Anyone owning RoP can get 5 hectares titled free. 

• The law draws no distinction between RoP owned by individuals and corporations.

• You must own the RoP for 5 years before you can apply to have it titled. 

• Fees ranging from $0.10 per sq. meter to $37.00 per sq. meter will be charged after the first 5 hectares are titled for free. There is one set of fees for property up to 30 hectares and another set for over 30 hectares, the latter being more expensive.  The legislation includes a price chart for various regions of the country. 

If the Martinelli government ever gets around to drafting regulations for Law 80, that may resolve a few questions not dealt with in the statute — e.g, if you own, say, 50 hectares of RoP, who decides which 5 hectares get titled free? 

Whatever its flaws, and they are many, Law 80 at least offers some hope, after many years of  waiting, that progress can finally be made toward titling island and coastal properties, thereby providing thousands of RoP owners with peace of mind and security of tenure.

(Anyone wanting a copy of Law 80, with price chart, should email me — allen@chiriquicoastal.com)

Allen

Okay, you’ve all heard that there is corruption in Panama. Well, yes, there is. But you need to keep two things in mind. First, it is not as widespread as many people think. There are honest people working in government here. (I said “honest”; I didn’t say “efficient”).

Second, there is corruption everywhere, even in our home countries such as Canada and the US.  The difference between corruption in a place like the US and Panama is that in advanced, post-industrial countries like the US it goes under a different name, it’s legal, and it’s available only to a select few wealthy individuals and large corporations.

If your name is “Bank of America”, “Goldman Sachs” or “J.P. Morgan”, the government will spend trillions of taxpayer dollars to bail you out of a financial collapse you set in motion. And you don’t have to worry about the government regulating you to prevent another collapse, because …., well, you have people who will take care of that.

Such people are called “lobbyists”.  They don’t (usually) carry around paper bags full of cash. Instead, they write cheques to election campaigns. And if that doesn’t get what their corporate paymasters want, they will let their favourite congressman or legislative aide know that a highly paid job or directorship will be waiting for him should he lose the affections of his constituents at the next election. No need to be crude and mention a quid pro quo. That would be illegal, and anyway, he will understand what you mean without having it spelled out.

The best part is that it’s all totally legal!  Yes, you can peddle influence to get the government to do what you want, and you will never go to jail. The only constraint is that in the US (or Canada or Europe) you have to play in the Big Leagues to benefit from this kind of corruption.

In Panama, on the other hand, corruption is more democratic. You don’t have to spend millions on expensive lobbyists and fancy offices in Washington. Here, anyone can give a traffic cop ten dollars to avoid a fine, or pay a government employee something under the table to speed up a decision that has been taking too long. 

I’m not saying there isn’t any Big Ticket corruption in Panama. If you want a favour from someone like Balbina Hererra, the former PRD presidential candidate and minister of MIVI, it could run into seven figures (just ask David Murcia).  But in Panama bribery is more of an equal opportunity business. Even poor people can find a few dollars to grease the wheels in a government office.

It is at least arguable that the kind of generally small scale and widely acknowledged corruption one finds in places like Panama is preferable to the large scale, yet invisible and hidden corruption that is pervasive in rich countries like the US.  

Here in Panama everyone has a fair shot at buying favourable decisions from government officials, while in rich countries like the US only the wealthiest and most powerful are allowed that privilege. 

At least in Panama, we understand that something is wrong and needs to be fixed. Sadly, in richer countries like the US, many people have not recognized the problem.  To the extent that they are aware of it at all, they tend to think that corporate influence peddling is just part of the democratic process.

Some people will argue that influence peddling of this sort is protected by the First Amendment guarantee of freedom of speech.  Such people are called “lobbyists.”

Allen

Early in 2009, just before the last presidential election, the Panamanian legislature passed a new law — Ley 23. It was a good law that made sense for the people of Panama, the government of Panama, and foreign investors. It allowed all owners of Rights of Possession on coastal and island property to have their lands titled at nominal expense. This made sense for the people of Panama, because it allowed them to acquire secure ownership of their properties at very little cost. It made sense for the government of Panama, because it would have eliminated much confusion concerning property rights, reduced the massive backlog of property disputes clogging up the court system, and vastly increased tax revenues, since all the newly titled properties would have been subject to annual realty taxes. It also made sense for foreign investors, since it would have put them on an equal footing with Panamanian citizens and given them security of tenure on their Right of Possession properties.

The ex-pat community had high hopes when President Martinelli was elected several months ago. He is a business man and we were encouraged when he spoke favourably about foreign investment and promised to titled all Right of Possession properties in Panama, whether on islands, the coast or inland.

Alas, President Martinelli is proving to be a serious disappointment to those of us who hoped he would follow through on his campaign promises. The new Martinelli government has just introduced a draft law — Ley 71 — that would effectively repeal Law 23 and create, in its place, a new statute whose effect, inter alia, will be to allow most Panamanian citizens to title the coastal and island properties they have held by Right of Possession for many years, while preventing foreigners from acquiring title to their Right of Possession properties, because, in most cases, they have not owned the Rights of Possession long enough to qualify for title under Law 71.

Law 71 contains many bad ideas, but the most obnoxious from the perspective of the ex-pat community is doubtless that it is designed to discriminate against foreigners, the vast majority of whom will not qualify under this law to title their Right of Possession properties on islands or the coast.

For investors, Law 71 represents an opportunity for some and a bad bet for others. If you have already purchased Right of Possession property expecting that its value would increase when you are able to title it, you are likely to be disappointed if Law 71 passes in its current form. The value of coastal and island Right of Possession properties will drop sharply, as few foreigners will want to buy Rights of Possession if they cannot get the properties titled.

On the other hand, if you have already purchased titled property on the coast or on an island, or if you are considering doing so, Law 71 will work out well for you, since it will create a long-term shortage of titled ocean-front property, thus driving up prices.

Allen

Carelessness can be expensive – very expensive. This is an ongoing  lesson we learn in various ways throughout our lives.  If you hand in a last-minute, poorly researched college essay, you can expect a lousy grade. If you marry someone during  a spur-of-the-moment infatuation, you can expect problems down the  road. If you start a new business without properly researching your product and market, you can expect to lose money.

Everyone understands this. So why is it that people think that is appropriate to fly from North America or Europe to a foreign country such as Panama, Costa Rica, Thailand, or anywhere else, and spend hundreds of thousands of dollars on property without doing as much research as they would on a college essay?

I have seen the results of this many times. Sometimes foreign buyers get lucky and don’t have serious problems. Often, though, their carelessness leads to major, but completely avoidable, mistakes. Here are a few real-life examples:

•  An American comes to Panmama, falls in love with a beautiful tropical island and buys it. He is in a hurry. His lawyer doesn’t do enough due diligence. The American knows that he is buying a right-of-possession property (squatter’s rights) instead of titled land, but he goes ahead anyway. He later learns that someone else owns an old title to the island from 90 years ago. Big problem.

•  Another American buys a property that he can only access by a driveway running through a neighbor’s orange plantation.  After the purchase is completed, the  neighbor puts up a gate to prevent the American from accessing his property through the orange grove. It turns out that the new owner does not have a legal right-of-way to pass through the orange grove.  Neither the new owner nor his lawyer bothered to make sure he had such a right of way. Another big problem.

•  A European couple buy a nice ocean front lot and proceed to build a huge luxury home on it. They are told that the lot is titled, but it isn’t. It is a right-of-possession property. Now they have a big problem: they plan to sell  the house for a good profit, but no one will spend the kind of money they want for their huge new house if the land is not titled.

• A retired couple from Florida find their dream property — a spectacular ocean front parcel of land with great ocean views. They buy the land from a local farmer. Soon they decide they are going to build a small resort on the property. They build a lovely main house, then several nice cabanas, then a pool, then a dock, and so on. Pretty soon they have invested over $1,000,000 in the property. There is only one problem. They don’t own it. The land the farmer sold to them wasn’t his land. It belonged to the government when they bought it, and it still belongs to the government. It always will. Big problem. The retired Florida couple got scammed by a local farmer and now their $1,000,000 investment is worthless.

All of these cases have one thing in common: the purchasers didn’t do enough research. Someone told them there would be no problems with buying rights of possession, or that there was a legal right of way across a neighbor’s field, or that the property was titled, or a local farmer claimed to won a particular piece of property and had a right to sell it.  The purchasers accepted such claims at face value without doing any of their own research. 

Now the buyers are angry and disillusioned. They feel they have been cheated or misled. I sympathize with them. They were cheated and misled. At the end of the day, however, all of these mistakes could have been avoided if the buyers had done a little more research. A farmer says he owns a piece of property and can sell it to you?  Fine. Hire your own surveyor and get a new survey of the property made. The surveyor will be able to tell you who the owner of the property is.  Your lawyer can double check. The seller says the property is titled?  Fine. Hire the best lawyer you can find and make sure he checks the title.  The vendor says there is a right-of-way across the neighbor’s farm?  Fine. Check it out. Ask to see it on the Deed. The seller tells you he has lived there for years without any problems, based only on rights of possession?  Fine. Talk to all of the neighbors. Do any of them have any claims against the property? Have any of them heard of any problems with this property — for example, someone claiming to own an old title to the property?

In the examples cited above, all of the problems could been avoided by asking a few simple questions. It is safe to buy real estate in Panama and most other places, as long as you are careful, do your homework, and ask the right questions. Above all, you have to use your common sense and always double check what people tell you. If you do that, you can safely buy your dream property in a beautiful foreign country and sleep soundly at night.

Allen Rosen

Panama is not immune to the Great Economic Slapdown affecting the rest of the world. Many foreign buyers who purchased property in Panama a few years ago now have financial problems back in the U.S. and Europe. Some of them need to sell their properties and are willing to give steep discounts.

There are also bank foreclosures. These are hard to find in Panama because you have to know the right people inside Panamanian banks who control the sale of foreclosed properties. But there are some very good deals. Recently, for example, a very nice, small coffee farm near Volcan was sold for about one third of its normal value — just enough to pay off the owner’s bank loan. That’s all the banks care about — getting enough to pay off what they are owed. And that is not usually a large amount, because banks in Panama have always been very conservative about lending money.

What kinds of properties are foreclosed? Every kind: houses, farms, large development parcels, partially completed condo buildings and developments where the owner has run into trouble and cannot service his bank loans.

There are some especially good deals with distress sales of development properties — highland, ocean front and beach front — that were purchased by foreigners in the boom years. Now, the market has slowed and they cannot get bank financing to develop their properties, or they got bank financing and cannot pay the loans. Many of these vendors have financial problems in their home countries and need to sell. There are some spectacular deals out there for buyers who have cash and want to make sound, long-term investments in prime real estate

Can you turn around and flip these properties next week for a fat profit? No. Don’t even think about it. That is the kind of attitude that got us into this mess in the first place. Those days are gone. The kind of buyers who should get into this market are those with a 3-5 years investing horizon. We are now in a market that will reward patience and a long-term perspective.

But before you start calling and asking whether there are huge discounts on our listed properties, the answer is no. Property prices are not sinking in Panama, as they are in Florida or Las Vegas. Prices are generally holding firm.

The foreclosures and distressed property deals I am talking about form only a small part of the real estate market in Panama and they are rarely advertised as such.

I happen to know, for example, of a spectacular 100 hectare beach-front development property that is listed for sale at $20,000,000. That is the official price, but I know the owner and I know he will sell for half that price.

I also know of a beautiful 20 hectare property with over one mile of beach-front that was advertised 8 months ago for $4,000,000. It is now being sold to a client of ours for $1,400,000.

Those are the kind of deals that are available.

Right now, there is blood on the streets (metaphorically), and that is the time when smart money decides to buy.

If this interests you, email me at allen@chiriquicoastal.com or give me a call at 507-6447-3689.

Allen Rosen

I’ve been around Panama for about 4 years now and I’ve seen all manner of creatures in all sorts of places — capibaras in the jungle near Colon, coyotes prancing through fields, hummingbirds on my front porch, dolphins in the ocean, howler monkeys everywhere, even an ocelot dashing across the road in front of our house.

I’ve also seen things you really don’t want to see, like poisonous snakes and scorpions. (Warning to Panama visitors: always wear long pants and closed shoes when walking in fields and tall grass. That’s where snakes like to hang out.)

What I wasn’t prepared for was my encounter with a certain reptile a couple of months ago. I was showing an American couple some properties on the coast near Boca Chica. They were from New Jersey and were a bit nervous about being in the wilds of Panama. It was getting dark when I drove past my house on the ocean while I was taking them to see another property. Right there, in the middle of my driveway, at the top of a hill a few hundred meters from the ocean, was a strange looking thing standing on short stumpy legs, with eyes glinting in the near-darkness. Damned if it wasn’t a four foot caiman (small alligator).  Here I was trying to reassure the American visitors that Panama was a nice, safe place to live, when right in front of us was the first alligator I had ever seen in Panama. 

What on earth was he doing in the middle of my driveway, on the top of a hill, hundreds of meters from the ocean? Aren’t these guys supposed to live in swamps and mangroves, or at least near water? 

He wasn’t moving, so I picked up a stick and (gently) poked him on the snout. Sure enough, he lunged at the stick. He wasn’t very big and didn’t look too dangerous. In fact, I thought he was sort of cute — for an alligator. 

The Americans weren’t so charmed with the neighborhood reptile, but they bought a property in the area anyway. I assured them that it was only a small alligator, who probably wouldn’t eat anything larger than a 5 year old child,  and I had never seen one in the area before.

Surely, this would be their one and only encounter with an alligator around Boca Chica!

Well, a week or so later, after they had moved into their new home, they reported that they saw another alligator (the same one?) on their lovely, private beach. They also told me that their 5 year old grand-daughter would be coming for a visit soon. 

Allen Rosen

Everyone knows that Chiriqui is the most beautiful province in Panama. Well, okay, not everyone knows that, especially the people who live in the other provinces. But I do, and if you are going to spend some time in Chiriqui — which you should — then you must check out Boca Chica, because it’s one of the best places to spend a few quiet days just hanging out.

Boca Chica (meaning “little mouth” in Spanish — it’s a bay, hence the name) is about an hour from David, the capital of Chiriqui province. The guide books will tell you it’s a charming little fishing village, and I guess you could call it that if you are feeling charitable, but the truth is that it’s a dumpy, ramshackle affair with mangy dogs and even mangier children playing on the streets. There are 4 bars and 1 restaurant (the latter is actually a bar that serves some food once in a while if you ask nicely), which gives you an idea of the priority of beer over food in the local diet. In Boca Chica, beer is the major food group, supplemented occasionally by rum.

But that’s not why you are here, unless you are into cheap brew (50 cents a bottle). You are here because it’s a great jumping off point for exploring this spectacularly pretty area. The first thing you will need to do is find a place to stay.  There are lots of choices. At the high end, my favorite is Seagull Cove resort, run by Flavio and Pillar — he from Italy, she from Spain. There are not many places in Panama where you will get first-class European service with great food and lovely surroundings. This is one of the few. For budget travelers, I recommend Pacific Bay Resort, a 15 minute boat ride from the public dock in Boca Chica. Pacific Bay has no road access and runs on solar power.  The accommodations are decent, and the food is …. well, it’s food. The big draw at Pacific Bay isn’t the food or the accommodation — it’s the natural setting: remote from everything, pristine, with great views of the ocean. This is a place you can really relax and soak in the ambience of the still unspoiled Pacific coast of Chiriqui.  

So, now you are settled in. What are you going to do? Again, there are lots of choices. I have a house in the area and one of my special pleasures is sitting on the deck between 6 and 7 P.M. watching the sun set over the ocean among the dozens of barrier islands that speckle the region.  There are no words to describe how awe-inspiring those sunsets can be. They make you forget all the trivial worries that crowd your frantic urban brain, and remind you that there really are more important things in life than yesterday’s irritating experience with the plumber who didn’t show up to fix your leaky toilet.  Nature has a way of helping you focus on what matters.

Speaking of nature, one of your first moves should be to rent a boat for a couple of  hours or a day with a local guide. Just go to the dock at Boca Chica and sputter a few words in Spanglish. One of the local fishermen will be glad to take your money (about $30 per hour) and steer you in a creaky panga around the barrier islands, where you will probably see dolphins jumping in and out of the water. You can also hike around some of the islands in the marine national park,  or spend some time lying on a deserted island beach. 

It doesn’t get any better than this — anywhere.

There is lots more to do around Boca Chica, but I’ll let you figure that out for yourself over one of the 50 cent beers in the local bars.

Allen Rosen

You’re thinking of buying property in Panama and you want to know what it’s like to live here.  After having moved from Canada and lived in Panama full-time for two years, this is my take.

The Good

For those of us who like year-round warm temperatures, the climate in  Panama is great. You can bake on the beach in the morning and then go up into the mountains for a respite from the heat later in the day.

Many parts of Panama are beautiful. I am especially partial to Chiriqui Province, where I live, because it has everything — beaches, mountains, rivers, huge national parks, and it’s green all year long, unlike some other provinces which become brown in the dry season.

The cost of living is low. I rent a large house in the city of David for $500 per month. In Toronto, where I come from, it would be $4,000 per month. Health care is good and health insurance is cheap — my girlfriend and I pay $55 per month. When I get a haircut, which is less often than I should, I pay $2. OK, it isn’t the best haircut in the world, but I’m 56 years old and women don’t look at me now anyway, so who cares?

The natives are friendly. Panamanians are usually very polite and welcoming.

The Bad 

If you retire here or just have a vacation home, life will be easy. The problems come in when you work here and need to get stuff done every day. If you work with Panamanians, you will discover very quickly that they are unreliable. They say they will show up tomorrow to do a job, and they won’t. They may never show up.

Panamanians are often economical with truth. It is such a rare and valuable commodity here that it is generally kept hidden, along with the family silver. Or maybe Panamanians just have a difficult time distinguishing the way things are from the way they would like them to be. You may look at a property, for example, and ask the owner whether it is titled. He will almost invariably say yes. But there is a fifty-fifty chance it isn’t. Why would someone lie about that, given that you will find out the truth at some point before you purchase the property?  Because he has probably applied to have the property titled, and in his mind that means it is titled, or at least close to being titled, and it is sure to be titled manana, so why quibble about minor details like whether he has the right paperwork to prove it now?  In Panama, truth is a more relaxed and flexible concept than in gringo-land, where everyone is so rigid about these things. 

Panamanians are very proud people. They do not like to admit ignorance — of anything. Ask a Panamanian a question about any subject, and he will instantly answer you with great certainty. “Jose, how far is it from Panama City to Bangkok, and what is the best way to get there?” “Senor, Bangkok is only 20 miles away. You can walk there in less than a day”. This is one of the cultural quirks you will get used to in Panama. It comes down to pride.  Panamanians think that it is an admission of ignorance and failure not to be able to answer a question – any question. So they will give you an answer — any answer, just as long as it is delivered with great self-assurance.  

The Ugly 

Panama is a melting pot of different peoples and cultures. It is also a young country, having gained independence from Columbia about a century ago. The result is that there is not much depth of culture here. If you can’t live without being close to great art, music or architecture, go to Italy, France, Spain or Great Britain. Panama is not the place for you.

On the other hand, if you like great climate, natural beauty, a low cost of living and a relaxed life-style among friendly people, maybe you should have a second home in Panama, or retire here, and make occasional pilgrimages to those much more expensive centers of  high culture — where you can’t afford to live anyway.  

That’s my plan. And I can tell you with great certainty that it is working out very well so far. You see, I’m already becoming a Panamanian! In fact, I may walk to London tomorrow to visit the National Portrait Gallery.

Allen Rosen

You’re shocked — shocked and horrified — to hear that there is corruption among traffic cops in Panama. Panamanians are generally very predictable people. They follow certain patterns of behavior which you will learn to identify fairly quickly. Traffic cops are no exception.

You hear the siren and look in your rear-view mirror. The cop pulls you over and walks up to the driver’s window. He very politely explains that you were speeding (or whatever) and that you are in very big trouble. The big trouble you are in will cost at least $50-$100.

He pulls out his ticket book and a pen. He holds the pen in his right hand directly above the ticket book, making sure this spectacle is taking place directly in front of your face. At this point, there is a pause. He doesn’t start writing the ticket. Instead, he waits, and reminds you what a really bad thing you did, and how much it will cost you if he gives you a ticket.

This is your cue. He expects you to offer a cash payment. If you were a Panamanian, he would be satisfied with $5. You, however, are a gringo, and in his mind that makes you both rich and stupid, so he wants $20.

What do you do? Well, you can pay the $20, or you can bargain for less, or you can pay nothing and tell him to give you a ticket. If you refuse to pay a bribe, he may threaten to keep your driver’s license until you pay the ticket, but that is illegal and he will push this ruse only so far. His objective is not to make life difficult for you; it is to make life easier for himself.

I always refuse to make a cash payment. I tell him to give me a ticket. This seriously irritates the cop. He doesn’t understand why I am not playing the game properly. Most of the time, though, he will not give me a ticket. He will just walk away in disgust. He believes fervently in the Law of Conservation of Energy. Why should he waste his valuable time and effort writing a ticket if there is nothing in it for him?

This is perfectly rational. The whole point of the exercise was to extract cash from the dumb gringo. The cop doesn’t care whether you were speeding. He doesn’t want to write a ticket. That would require effort, and why bother if it isn’t going to help him get beer money? 

That’s why he’s pissed. He was bluffing and he doesn’t like having his bluff called. All he wanted was some extra cash so he could kick back a few cold ones tonight with his friends and YOU won’t give it to him. 

You are a real pendajo!

Allen Rosen