Key concepts for developers and owners enjoy the benefits of their condos in Panama.
In Panama, condos are rules by what is named the “Horizontal Property” regime, or “PH” by its Spanish acronym.
By definition, the horizontal property regime is one that regulates the coexistence of private properties that share some common properties between them, such as apartments (private) in a building (with common areas).
Similarly, it is understood as a “horizontal property” the property forming part of a horizontal property regime.
The Horizontal Property is a legal institution in Panama that has over 60 years of experience, which has allowed a sustained housing growth and has contributed to improving the quality of life of Panamanians .
Thanks to the PHs, developers can:
- take advantage of the vertical and horizontal spaces,
- design new forms of development,
- facilitate their financial processes,
- have a grip in the administration of the PHs of their projects until they are finished and
- provide significant benefits to its customers, who surely appreciate the existence of a good horizontal property regime.
Meanwhile, those who buy a property in a PH get real benefits:
- support of all participants in the maintenance, preservation, use and enjoyment of their property, enabling them to preserve or increase their property value.
But this is a system that works and is useful if the same actors, promoters and buyers, have clarity of what it means, of its possibilities and limitations, and, in general, if they know the rules that govern the matter.
So, we want to highlight some key concepts to be considered both by the developer as by the condo buyer, if they want to enjoy the possible benefits of this regime:
- The legal reserves: are measures of custody and guardianship established on a horizontal property regime, requested by the developer and of forced compliance by their customers. These legal reserves can modify the use that can be given or not to the PH; may relate to provisions relating to the future development of the PH; or they can about rights the promoter reserves for itself, among others.
- Promises: The developer should be careful when drafting the promises offered to its customers, in the contract of promise of sale or when advertising the project since they constitute minimum guarantees for the buyers; and the developer is obliged to fulfill them. These promises are contained in the legal reserves, in the characteristics of the project, in the limitations and other conditions that the developer agrees to comply and then become an obligation for him. Also, buyers must exercise their bargaining power and verify that the documents protect their present and future interests and let them avoid misunderstandings.
- Approvals: The developer must meet regulatory approvals in the design, land use, construction, environmental and occupation permits prior to starting the development or might otherwise suffer the consequences of such omissions. These permits ensure the community that the project is done correctly and in compliance with current legislation.
- Administration: It is very important, and never will emphasize this enough, that the owners of a PH participate in the administration, in the PH community. A PH is governed from its Board of Proprietors and its Board of Directors, and the quality of a PH depends critically on cooperation, collaboration and assistance of the owners to manage the administration, either as part of the board, committees, attending meetings or simply engaging.
- Common expenses fees: The maintenance and operation of a PH depends on the economic contribution of all participants and for this, those who want to participate in a PH must consider the real possibility of assuming the cost of living in it. To the extent that all owners of a PH collaborate with their share of common expenses, the PH may meet its needs and become a true hub of quality of life for its members
- The rules: at a PH there are ownership rules and usage rules, two different and complementary rules that lay down what can be done or not in a PH. These rules facilitate the conservation, maintenance and management of the PH and is always recommended that participants know them, to better fulfill their obligations and know what rights they have.
And behind all the above factors, the most important factor is the human interest by which the PH participants become aware of the need to get involved and give their contribution to the whole.
Ultimately a PH, as a social organization, is the sum of strengths and weaknesses of its participants and overall happiness will be the result of the work of all.