Derecho Posesorio in Panama. What does it mean?

The term Derecho Posesorio simply means, right of possession. Derecho Posesorio is a type of land reform which came to be in the 1960´s under the direction of General Omar Torrijos, the father of Panama´s current President, Martin Torrijos.

The original purpose of the derecho posesorio land reforms was to give poor farmer´s who worked land, but did not have title, some sort of legal right to the land that they farmed. The main difference between having title and having derecho posesorio is that with title one has a registered deed in the public registry thus eliminating any questions regarding ownership. In other words, no one can contest ownership of land. Also, banks do not typically offer loans for land that has right of possession.

It is possible to title land that is owned through rights of possession. This method of obtaining land does have a degree of risk involved with it, however, it can be a very economic way of obtaining real estate. A summary of steps required to title land that is owned through derecho posesorio are the following:

• The land with right of possession status must be surveyed and have its boundaries formalized by a licensed surveyor. A formal request must be presented to, and signed off by the neighbors of the land in question.
• Once all of the neighbors have signed off on the property with derecho posesorio, the Agricultural Reform Office (Reforma Agraria) must do a formal inspection of the property.
• Once this inspection is approved and all the neighbors have confirmed the boundary lines, the agricultural reforms office will emit a resolution.
• The value set forth on the land by the government must be paid. This value depending on the location of the land.
• Last but not least, the documentation of the land is sent to the Public Registry to recieve title.
  The process of getting land titled from derecho posesorio status typically takes 6-8 months and is a right reserved for Panamanian Nationals alone.

Right of ownership by non Panamanians (Foreign Ownership) Foreign investments in all real estate areas are welcome and present in Panama. The procedures to adjust to the legal requirements in this area are simple and easy to implement. In the particular case of retirees (pensioners) who rent, Panamanian legislation provides for tax exemptions when taking cars as well as household items into the country and discounts on the cost of bureaucratic processing regarding moving and getting settled in Panamanian territory. Furthermore, it grants many other prerogatives and privileges to said retired persons (pensioners), as well as ample financial opportunities in Panama’s modern banking center.