Hey, Buddy, You're On My Property

Date: 09/01/2006

International Living Postcards-- Saturday Edition

Saturday, Sept. 2, 2006

Kathie and I are interested in purchasing another building renovation project in Casco Viejo, Panama. In the city last week, we spent an afternoon walking around looking for prospects. Prices have doubled in the past three years, so it's harder and harder to find a good deal. That's why, when a contact told us about a big corner building just a couple of blocks back from the main plaza available for a bargain price…our first question was, "What's the catch?"

"The place is occupied by maybe 50 people," came the woman's reply.

Not so many years ago, nearly every building in Casco Viejo came with a similarly impressive number of residents, some legal, some not. Your first challenge as new owner of a building under these circumstances is to identify tenants paying rent, tenants not paying rent, and squatters. Then you work your way through, offering a cash payout to each, depending on his status. The process can be lengthy, costly, and a big pain in the neck.

Squatters are an issue not only in Panama, of course, but everywhere. Your first best protection against finding yourself in a situation where someone acquires some legal claim to a piece of property to which you hold title is information. Here's what you need to know regarding adverse possession (that is, the occupation of your property without your permission for a period of time long enough to result in title for the occupier-user) in the Latin American countries we recommend to you most often:

In Argentina: After 20 years of peaceful adverse possession, a squatter can go to court to claim title.

In Costa Rica: Squatters obtain some rights after only 30 days of adverse possession. You'd need then to obtain a court order to evict them from your land. You'd give the court order to the local police for enforcement. (This is the process for eviction in any of these countries.) After 10 years, a squatter can gain title to the land.

In the Dominican Republic: Right of adverse possession is not possible against land with a Certificate of Title (that is, a registered title). Otherwise, 20 years of adverse possession is required before a squatter can claim title.

In Honduras: It is not possible in this country to obtain title to registered land by adverse possession. In the case of unregistered land, the squatter must show 20 years of adverse possession.

In Mexic A squatter can obtain title after 10 years of adverse possession.

In Nicaragua: After 10 years, the claimant can obtain possessory rights; after 30 years, he can claim full title.

In Panama: After 10 years, the claimant can obtain a right of possession to the land. In 15 years, this right of possession can be converted to fee title.

Now, please, dear reader with a legal background, don't write to tell me I've glossed over or overlooked the details here. I'll admit now that you're right. I certainly have. These are complicated issues, and each case is different. You should check the particulars of rights of adverse possession in any country where you're considering investing with your in-country attorney.

Lief Simon
Real Estate Editor, International Living

P.S. How can you avoid the issue altogether? Fence your property and employ a full-time caretaker.