Requirements that are important to keep in mind in order to be sure that we legally own our home.
The sales agreement is the one for which the ownership of the new property is acquired, and as such it has a list of requirements that are important to have in mind in order to make sure that you legally own your property .
It is formalized through a public instrument called deed which must be signed before a public notary, by oneself or through a representative.
This deed must contain the basic information of the sales transaction:
- The property information
- The seller information
- The buyer information
- The purchase price of the property
- The manner in which the payment is being made
- The consent of both parties to conclude the contract
- Any other agreements that the parties want to do
It is in this document that the seller usually sets limitations on the right of ownership of the buyer, called “domain constraints” such as co-ownership regulations, what may or may not be build, etc.. and it is important to check whether they are established.
If the purchase is not paid right away but through a financial institution loan, that institution loan has to be cited as well, and the guarantees we provide to the financial institution.
The Public Notary, once he has received the signature of interested parties in the deed, proceeds to sign the document along with two witnesses to attest to the operation.
Along with this deed must accompany a certificate of good standing of the property taxes on the buyed property, the receipt of payment of the transfer taxes, receipt of the payment of water consumption and a certificate of good standing of the condo the house or apartment is part of, if any.
This deed will be kept on file at the Notary Public for life, attesting to the legal act and those involved in it and the Public Notary will give to the person concerned authentic original copy of the deed for registration due in the Public Registry, which only bears the signature of that authority.
The Public Register of the Republic of Panama is the official body attesting the rights of property and land titles, as well as all acts which are related to real estate, providing legal certainty and security of our ownership, ensuring our estate.
Once the document enters the Public Registry, officials will review whether all the details of the operation are correct, then order the registration of title in favor of the new owner.
All documents that are registered in the Public Registry are considered public knowledge and from the time of registration they generate rights to the owners, before the whole world.
This registration is effected by affixing stamps and scanning the document and placing it on the website of the Public Registry for the record of all interested parties. From that moment we can consider ourselves the new owner of the property and from that moment we are responsible of all costs and expenses related to it such as property taxes, fees for common expenses if part of a condo, maintenance, etc.
Once this procedure is done, the deed – which must have the Public Registry seal – is returned to the concerned party. We must keep this deed safe, as it is our title deed.
If the buy was paid with a loan, it is common that the financial institution that made the loan keeps the deed, and when we finish paying it, the deed is returned to the owner.
Finally, it is important to mention that we need to update the information before the Ministry of Economy and Finance of Panama to reflect that we are the new owners of the property. It will also be necessary to apply for any exemption from property taxes corresponding to the new buildings – if applicable – in order to take advantage of the tax benefits offered by Panama.
These two steps can be done without a lawyer, directly by the same applicant.