“Do you think he’d take US$10,000?”
“Yes, I’m pretty sure he’d jump at that.”
“Would he take US$8,500? At US$8,500, I’d cash him out on the spot.”
“Well, that’d be US$1 a meter. He might go for it. Then you’d have money left to use to title the property if you decide you want to.”
“Right…and maybe I won’t worry about it. I’ll fix the house up, and it’ll be a great place to stay when we want to go fishing.
“If you really think I could get the place for US$8,500, that’d be tremendous. Other places I’ve looked at that could work as a fishing getaway have been US$200,000 and more.”
“Yes, well, you need to understand. You can have problems with rights of possession property. You need to be careful. Still, US$1 a meter…you can’t beat that…”
I continued to swing back and forth in my hammock, eavesdropping in silence.
I offered no comment to the two gentlemen speaking at the table across the patio from me. I kept my opinions to myself as I swung in my hammock…but I’ll share them now, dear reader, for your benefit.
Right…rights of possession property can cost a fraction as much as titled property…but there’s a reason for that. To say that you “can have problems with rights of possession” is understating the reality.
You can purchase rights of possession property, but you don’t own it. You’ve bought the right to possess the property. But, if you treat it like it’s yours…investing in improvements, building a house on it, making plans related to its long-term use…you can have a real shock one day when you show up after some absence to discover someone else living in your house, enjoying your improvements, and making his own long-term plans related to the property’s use.
Rights of possession land isn’t uncommon in parts of Panama, specifically Bocas del Toro, for example, and, we’re discovering, out here on the western coast of the Azuero Peninsula. Nearly every gringo owner we’ve met this weekend has an ROP story to tell.
Not all land in this part of the country is ROP…but there’s enough of it that you want to understand the distinctions before you make a purchase. In fact, you want to understand the difference between ROP and title before you even begin shopping.
“I’ve learned my lesson. I just don’t believe anyone, not any attorney, certainly not any real estate agent,” explained one American we spoke with who’d invested in a couple of pieces of ROP land near Torio about three years ago.
“My attorney insisted all along that I’d be able to have the property titled. I went through the titling process, filed all the paperwork, paid all the fees…then my application for title was returned with a big “Denied!” stamp on the front. No reason that made any sense…simply denied. Now I have no idea what to do.”
In fact, sometimes, ROP land can be converted to titled property. Meaning that buying ROP can be one of the best ways to buy for investment, because, as the gentleman sitting across the patio from me last night pointed out, the cost can be a fraction the cost of comparable titled land. Buy for US$1 a meter…successfully convert the ROP to freehold title…and you can turn around and flip for many multiples of what you paid.
The key, of course, is to be really, really sure you’ll be able to convert the ROP to title. To make that determination with confidence, you need the counsel of an attorney who knows what he or she is talking about and who has experience dealing with ROP issues.
Kathleen Peddicord
