Legal Services for Panama Property

May 31, 2008

Are you thinking of buying real estate in Panama? Whether for living, retirement or investment services, or simply as a second tax-free home, we would like to warn you about free or cheap legal services offered by realtors or real estate agents. Basically, advice in this case is probably worth what you pay for it, or worse, it could end up costing you money!

It is relatively common for a Panamanian real estate brokerage firm to offer free corporations for the buyers of properties they are selling. Frequently they have an in-house attorney or their own law firm (in other words, that is an in house lawyer masquerading as a third party law firm) doing the corporate administration and formation work.

The real estate is then titled into the name of the corporation. The corporation has nominee directors, and a resident agent who is tied to the real estate company that sold you the development through their lawyer. The lawyer forming the corporation does not have an arms length relationship. There is a definite conflict of interest in that the realtor is the one who is paying the lawyer not you. All the lawyer cares about is seeing that the real estate deal closes and the developer gets paid.

What if you need to start a lawsuit concerning the real estate because something was not done correctly? Now having his lawyer do the work on the corporation that owns the real estate that your hard earned money paid for does not seem like such a good idea, does it?

Second Year Fees – A decent price for second year fee is $1500 including three nominees, resident agent, resident address and the $300 tax. Some of these law firms charge $5000 or more for the second year fees and that is how they make their money. So the free corporation may not be that free.

Free Immigration Work from Broker – Again be careful if there is a dispute over the real estate why do you want your broker or their lawyer to have involvement with your immigration case. What if a lawsuit is necessary regarding the real estate?

Always get an independent lawyer that represents you without any conflicts of interest. Our firm does not sell any real estate and we are proud to independent.