RIGHTS OF POSSESSION
To understand Rights of Possession, you have to understand a little bit about real estate in general. Real Estate is from the Spanish for “Royal Estate,” as in, it was all the king’s land – you were just given the rights to use it by the king.
And in exchange for your fealty, the king will not only grant you the right to the property, but also stick a spear in anyone who would try to take that property from you. So long as you remained in good standing with the king, the land was yours to do with as you pleased.
And so it largely remains today, even in emancipated countries like the U.S. If you don’t believe that, just try not paying your property taxes (i.e., fealty) and see what happens to your property rights! Or read about the latest U.S. Supreme Court decisions regarding “eminent domain,” to see what can happen when your ownership of a piece of property no longer pleases the king.
Yet while the “king” will still stick a (legal) spear in anyone who tries to take your legally held property away from you, there are some common law exceptions. Most notably, if you willingly let others use your land – when you act as if they have a right to it and you fail to maintain your legal rights to your property – the courts will uphold the other parties rights of use. A startling example of this occurred near Austin, Texas, where a man let the community kids use his land for a ballpark, until he was ready to sell or build on it. He did this for the better part of a decade, even to the point of letting them build a stadium on his land. And when he went to sell, the courts upheld the communities right to use the land for a ballpark. In essence, he gave up his rights of use to the land.
ROP in Latin America
In Latin American Rights of Possession, these two concepts combine. Specifically, in Boca Chica Island, the Panamanian government owns title to the land, but has granted Rights of Possession to private citizens. And we have acquired Rights of Possession from them.
What does that mean? It means you can use the property any way you want, just as if you held title to the land and that you would hold title to any improvements you make to the land and anything you build on it. You own the right to use the land, just as if you had the title. Except, because you don’t own the title, you don’t have to pay fealty, or taxes, to the state.
Where Rights of Possession can differ from holding the title are twofold:
- Proving your claim to Rights of Possession
- Selling the property
In proving your claim to the land, you can’t just show title, which means you have to do more legal legwork to make user you can legally uphold your Rights of Possession. Basically, you have to show that the person you bought the Rights of Possession from actually did have proper claim on those rights.
And in Boca Chica Island, we’ve done that for you. To excess, in fact. And we strongly encourage you to call us so we explain the extensive process we have gone through to investigate, ensure, and document your rights of property.
In addition to the legal legwork, you have to act as if it’s your property. (Remember the guy in Texas?) When you build on your property and improve your property and maintain your property and use your property, you are establishing, beyond any doubt, that you physically hold the rights of use. And the courts will uphold that.
This is a huge reason why buying from a local, on-the-ground presence is so important. Because for the last 3 years, we’ve been establishing our rights of use of this property beyond any doubt, through everything we’ve done to and for it. And that certainty of ownership is entirely passed on to you, when you buy the property.
The second big question is, can you resell the property at a profit? Is there a market for Rights of Possession for Panamanian real estate? Absolutely! There is a huge market in ROP, which is routinely bought, sold and traded just as titled property is.
So can you sell your Rights of Possession to your Boca Chica Island Property for a profit? Yes. Especially because of how cheaply you’re acquiring the property compared to comparable real estate.
Rights of Possession is somewhat unique to Latin American real estate, and often something of a curveball for North American investors, but at the end of the day, it represents more of a benefit than anything else – the benefit of not paying property taxes!
Yet you may have additional questions or concerns regarding rights of property and we invite you to call us to discuss them. We’re more than happy to explain this to you in depth.