In Panama, several measures have been introduced to comply with international recommendations on transparency and the prevention of money laundering. As a result, real estate due diligence has become a key element in the sector. The real estate market is now classified as a regulated non-financial activity, meaning that transactions involving properties must follow specific legal requirements to guarantee transparency and legality.
These rules are designed to prevent unlawful activities such as money laundering and terrorism financing, as well as to ensure compliance with tax and property laws.
When selling or renting a property, conducting a real estate due diligence process with a risk-based approach is necessary. This process helps avoid future complications and confirms that the transaction proceeds without unexpected issues. Whether reviewing a property or assessing potential tenants or buyers, a detailed examination helps protect your interests and contributes to a fair and secure agreement for all parties involved.
What Does Due Diligence Involve?
Real Estate Due diligence in Panama consists of verification and analysis conducted throughout a property transaction. Its purpose includes complying with local regulations that prevent financial crimes in property transfers. Additionally, it helps confirm that the property meets all legal conditions, allowing the buyer to acquire it lawfully and without risks.
Among the most important aspects of real estate due diligence are:
Property Verification
- Checking the Public Registry of Panama to confirm property ownership and determine whether there are any mortgages, liens, or other restrictions that may affect the transaction.
Financial and Tax Status
- Confirming that the owner has paid all applicable property taxes, such as Real Estate Tax and Property Transfer Tax.
- Identifying any outstanding debts related to property maintenance (for condominiums or properties subject to monthly fees).
Physical Condition and Intended Use of the Property
- Inspecting the structure to identify hidden defects or structural issues.
- Confirming that the property’s use aligns with its intended purpose (residential, commercial, industrial, etc.).
Seller Verification
- If the seller is a legal entity, reviewing its legal status, authorized representatives, and ability to sell.
- If the seller is an individual, confirming legal capacity to sell and checking whether there are any pending legal disputes involving the property.
Advantages of Conducting Real Estate Due Diligence
- Avoiding Legal and Financial Risks: Reduces the chances of fraud, legal disputes, and third-party claims.
- Protecting the Investment: Confirms that the buyer is acquiring a property in suitable condition with proper legal standing.
- Complying with Legal Requirements: Helps transactions meet Panamanian laws.
- Facilitating the Purchase Process: Reduces unexpected delays and complications.
By performing a thorough review, all parties can move forward with confidence, reducing uncertainties and making the purchase process more secure. Real estate due diligence in Panama helps buyers and sellers avoid legal issues and move forward with greater certainty.
Kraemer & Kraemer brinda apoyo legal para guiarlo en cada paso del proceso. Contact our team for assistance with your property transaction.
