Warning-real estate in Panama is not what it seems
Make the long story short, delivery was expected to be in 2009, well it took them another 3 years to finish and schedule delivery of the unit in 2012. We actually got the Deed on May 21, 2013.聽 Once they got our initial 30% deposit there was little if any communication as to construction progress or even an apology for the delays. Even post full payment it was like pulling teeth to get any kind of information from them. Every time we had a question a physical visit to the Aleman Arias office was necessary to get a response. At the time of purchase we were led to believe that over 90% of units were sold, well again that was just talk.聽 At delivery they still has unsold units. The developer is far from a capable builder.聽 On delivery we noted a number of items that needed to be fixed and a year and half later nothing has been done.聽 Here are a few worthy of note albeit a far cry from a complete list of聽 unfinished items
Literally every item used in the construction was the cheapest you could find from plumbing, the AC unit, tiles, cabinets, electrical outlets.聽 You name it and you could not find any thing less expensive even in Panama. The staff while pleasant do not get much done.聽 It's always the sub who is not responsive......the developer simply collects the checks and then let's you hang.
Air conditioner - the day we took possession we noted the loud noise from the compressor such that you can not sleep.聽 I don't think it has a "DB" rating!聽 It looks as if it was a used unit on delivery.
Shower - the water flows away from the drain.聽 So we use a squeegee to push the water towards the drain.
Pool - the pool has never been completely finished.聽 It looks far from clean, the tiling is incomplete and I wouldn't let my dog swim in it.
Gym - the charged each unit buyer (230 of them) in excess of $1000 to furnish and equip the gym.聽 Well my basement is better equipped and furnished then Oceanaire.聽
All of this can happen anywhere but the difference is once noted it gets fixed else where around the world but not at the projects that Aleman Arias Developers promote and profit from. They are promoting a Ocean reef now and thrust me you don't want engage in a transaction with this group as you will undoubtedly be disappointed.
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I have a couple of questions if you don't mind.聽 Prior to the real estate nightmare, how long had you lived in Panama?
Assuming you rented prior to purchasing, how was your rental experience, and your overall living in Panama?
Thank you,
Anna
karen1604 wrote:Hello Prboss---> An introduction may be?
Thanks
Karen
How rude of me. Sorry.
Judicial Recourse
The judicial system聮s capacity to resolve contractual and property disputes is weak and open to corruption. The World Economic Forum ranks Panama聮s level of judicial independence to be 133 out of 142 countries in the world. The World Bank聮s Doing Business in 2012 notes Panama is 120 out of 183 on the Registering Property measure, and 119 on the Enforcing Contracts measure.
I think they're being kind. In my experience, no meaningful legal recourse exists, especially for expats, to recover against unscrupulous developers and other perpetrators of fraud in Panama. Indeed, find yourself on the wrong side of a dispute against any number of politically connected families and you'll be lucky if your bank accounts and other assets are not seized without any notice or imprisonment for no reason or both. Contracts, like the word of most Panamanians, means nothing.
SawMan wrote:The U.S. State Department describes Panama's judicial system as follows:
Judicial Recourse
The judicial system聮s capacity to resolve contractual and property disputes is weak and open to corruption. The World Economic Forum ranks Panama聮s level of judicial independence to be 133 out of 142 countries in the world. The World Bank聮s Doing Business in 2012 notes Panama is 120 out of 183 on the Registering Property measure, and 119 on the Enforcing Contracts measure.
I think they're being kind. In my experience, no meaningful legal recourse exists, especially for expats, to recover against unscrupulous developers and other perpetrators of fraud in Panama. Indeed, find yourself on the wrong side of a dispute against any number of politically connected families and you'll be lucky if your bank accounts and other assets are not seized without any notice or imprisonment for no reason or both. Contracts, like the word of most Panamanians, means nothing.
Ok, thank you. But are you implying that there is no rule of law in any RE transaction? If a condo is owned on Balboa Ave, by an expat, than that expat has less legal rights than a Panamanian?
Prboss wrote:SawMan wrote:The U.S. State Department describes Panama's judicial system as follows:
Judicial Recourse
The judicial system聮s capacity to resolve contractual and property disputes is weak and open to corruption. The World Economic Forum ranks Panama聮s level of judicial independence to be 133 out of 142 countries in the world. The World Bank聮s Doing Business in 2012 notes Panama is 120 out of 183 on the Registering Property measure, and 119 on the Enforcing Contracts measure.
I think they're being kind. In my experience, no meaningful legal recourse exists, especially for expats, to recover against unscrupulous developers and other perpetrators of fraud in Panama. Indeed, find yourself on the wrong side of a dispute against any number of politically connected families and you'll be lucky if your bank accounts and other assets are not seized without any notice or imprisonment for no reason or both. Contracts, like the word of most Panamanians, means nothing.
Ok, thank you. But are you implying that there is no rule of law in any RE transaction? If a condo is owned on Balboa Ave, by an expat, than that expat has less legal rights than a Panamanian?
why no answer?
Yes.聽 There are contracts and laws of course, but recourse as an expat for breach or other civil wrongs are limited at best, as the U.S. government describes, by design:
(i) Remedies, like suing for money damages, typically do not exist.
(ii) The reality of Panamanian justice is that some people get more justice than others! My rights as, say, an aggrieved condo buyer, are far less important and far less protected, if at all, than the powerful, politically connected Jewish developer
(iii) If a procedure for recourse exists, lawyers will claim they'll proceed on your behalf and will take your money, but will not vigorously pursue knowing who is on the other side and knowing even if they advance the claim the judge will never hear it, the file will be "lost" multiple times over the years until you go away.
Prboss wrote:thanks.聽 guess the solution is to rent vs buy. that way you can pack up and leave if legal issues arise.
I think that's really the way to go.聽 After time if buying seems right, you'll be more aware of the traps.聽 Tell us how it goes!
聽 I take great exception to the comment that most Panamanians do not keep their word.聽 I've had the opposite experience.聽 I have found terrific properties with great prices.聽 The transactions went very well and the owners became great friends.聽 The key??聽 DUE DILIGENCE.聽 I found that having a good Panamanian attorney is a must!聽 The attorney will do the research in the National Registry, make sure all the appropriate documents are created, notarized, filed, etc.聽
聽 Most of the great bargains/properties are not advertised by "realtors". You will find by going to an area you like, and spending time getting to know the local people will generate lots of good possibilities.聽 If possible get a Panamanian to negotiate for you.聽
聽 Have a survey done, go to the Electric Company, water company, etc.聽
聽 The whole process doesn't take long, and is not expensive.聽 The seller normally pays the commission, and if anyone recommends "Title insurance" beware.聽 That's why Titled Property is listed in the National Registry (online).
聽 I'm sorry you had such a bad experience, but those type of people are everywhere.聽 I assure you it's not the norm.
Best of luck and I hope you find a solid answer.
Captain Steve
"PANAMA PRICES ON THE RISE
Make no mistake, the last six months in Panama have seen a noticeable rise in property values, especially along waterfront districts like Balboa Avenue, Punta Pacifica, and Costa del Este.
Strong demand from the US and Canada, Venezuela and Colombia, along with an uptick in the economy of European countries like the Spain and the UK in 2013, and a decreased supply of new apartments for sale have driven up prices by as much as 10% in certain areas.
Because developers were not building new high rises between 2009 and 2012, the next 12-24 months supply of brand new apartments will be limited to a handful of projects; this as opposed to the roughly 4,000 new apartments that hit the market over the last three years.
This slackening of new inventory, combined with steady/rising demand will continue to drive prices up.
Now is the right time to take a serious look at the market, which after being flat for over three years is once again trending upwards. In real estate, its not just about location, it聮s about timing.
2014 is going to be a game changer for Panama. The Metro will open and the road reorganization projects throughout the city will be completed, plus the historic renovations in old town and the Cinta Costera 3 will also all be completed, breathing new life into a city that聮s felt like it has been under construction for the last five years.
All the Best,
Kent Davis
Panama Equity Real Estate
Panama City, Panam谩
El Cangrejo, Argentina Tower
Office: +(507) 396-0931 Mobile: 011 (507)6030-6782 USA Number: 404 865 1629
Skype: kentpd22
Captain Steve
A list of approved FFIs will supposedly be available to search online later this year:
The big take-away from this story is DO NOT BUY PRE-CONSTRUCTION PROPERTY.
realtors in panama are like used car dealers trying to sell a lemon
panama is overbuilt and choking - prices are coming down
sooner or later the property tax issues have to be solved
or this huge real estate inventory will just rot unsold
there are so many nicer places than panama
What we learned:
You do not need or want a Real Estate Agent
You need a great lawyer to make sure all the titles and deed are clear and process the payment and check on taxes paid by the seller
Search through word of mouth
Have a contractor inspect the home
Get a land survey
Try to buy a home from someone that is moving back home..US or Canada, you will get a much better deal and smoother transaction
Talk to the neighbors in your new neighborhood as to the pros and cons and what other homes nearby have sold for.
Drive by late in the evening and walk around
Take your time!
Coming from Canada, I wonder if you would find that area unbearably hot.
BRUMMY wrote:We too are considering buying property in Panama to escape out ghastly Winters in Canada. We are coming to take a look at the Coco Beach develop in Puerto Armuelles. The project looks great on paper but we are still a bit leary- especially after reading this forum!
February we are coming over to take a look around.
So, you can't see there being any reality to Coco Beach ever happening?
You are from Canada. The majority of Canadians I know are used to a much cooler climate and aren't comfortable at sea level here. This is the tropics and it is hot and humid.
$50K or more? That's a lot to put into a property that may not go anywhere. double your money in 5 years? really?? how? There are so many stories of people who invested in things like this and ended up very sorry. Anyone can talk a good line, but it's only talk until something actually happens. I hate to rain all over your plans but I would be very very cautious. When you come in Feb you can see for yourself what it is like in Panama and in that area in particular.
I think you would be much safer to rent something for the couple months you plan to spend here. Also, who would rent your place for 10 months of the year? I wouldn't want something I had to leave for a couple months a year so the owners can use it. Your area could possibly be a tourist destination someday if improvements and developments happen but it certainly isn't now.
It will be interesting to see how you feel about things when you come. Me? No way. Rent a condo at Las Olas instead.
BRUMMY wrote:Oh boy, the more I read, the more I lose heart about buying in Panama.聽 How does this happen time after time?聽 The guy I have been speaking to from Holland appears to be very transparent and open with everything regarding Coco Beach, but now I am questioning everything.聽 We are coming in February to take a look at the lot we have put a deposit on.聽 聽We have the paperwork to say that our deposit is 100% refundable should we decide against it.
So, you can't see there being any reality to Coco Beach ever happening?
There's an endless stream of newbies for developers to prey upon.聽 Don't buy pre-construction, unless the funds are insignificant to you financially and you like playing "Panama Hold 'em."
Your second clue is that the developer posts no information about itself anywhere on the website.聽 Any reputable developer with "skins on the wall" and a track record in Panama would be boasting.聽 These guys are hiding.
Unrelated to the Las Olas project is a Las Olas project in Ecuador.聽 The U.S. developers are much maligned on the Ecuador forum:聽 /forum/viewtopic.php?id=243442
You might find the discussion interesting on the ability of non-local developers to successfully develop in another country.
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