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Concessions for Island Properties - Bill before the Legislature: the Constitutional backgroundCurrently there is, before the Economic & Finance Commission of the Legislature, a Bill which will reform the Concession application process and requirements for island properties. A copy of the draft bill is available on the Legislative Assembly website. Today (Thursday, October 6th) is the second debate by the Commission on the proposed bill. Update: January 26, 2006 - Regulation of Property Concessions in Panama for Tourism Investment and Sale of Island Property for Tourism Development The purpose of the following pages is to provide some insight and information regarding these changes and the background information which should be known in order to understand the changes. {constitutional framework} {types of property ownership - definitions} {eminent domain} Any discussion of property concessions of Government Lands in Panama should centre on Articles 257 and 291 of Panama's Constitution. The issues which currently are being debated, and the bill which is being passed, concern property which belongs to the Panamanian Government. But, the property is currently not being used by the Government and is in fact being occupied and used by private persons. This occupation and use is the subject of the debate before the Legislature, since the new law for granting concessions (between 60 to 90 years) will provide the concession holder with legal rights far and above those of "rights of possession". Basically, what the concession will provide the holder is legal tenancy (leasehold estate) for a period of 60 to 90 years. Currently, concessions are issued for 20 years, renewable for a further 20 years if the concession holder is current with the payment of the concession annuity and is continuing to use the property for the purpose for which it was established. The first day of debate regarding the bill was held on Tuesday, October 4th. In this session, the discussion was to cover Chapter I (articles 1 - 13). However, most of the discussion focused on Article 1, and the general objections to the law as a whole. Article 1 fails to define "derechos posessorios" or rights of possession, as they are currently known in Panama in the ex-pat community. It also only deals with island property, whereas the discussion centred on island and coastline properties. One of the points of the discussion is the inability to obtain loans and financing from banks and financial institutions over derechos possessorios properties, because the holders have no title or right to property (being owned by the Government). Therefore the need for the concessions and legalisation of the property is important in order to finance development. Another one of the strong points under discussion was the legalisation of properties which have been held by families for various generations. Article 27 of the law (not yet under discussion) deals with persons that have occupied the land for 10 or more years. However, what if the property was occupied by the persons father or grandfather before them, and was "inherited", and they have only received the property 3-4 years prior to the entry into effect of the law. They obviously wish to have recognition of this occupation of the property. A further issue under discussion arose in Article 4, which indicates the requirements in order to apply for the concession. Among these requirements are the need to provide a bond to the IPAT department, regarding the tourism development to be done. However, this appears to put the cart before the horse. Why would a developer obtain a bond (which they might lose, should they fail to undertake the project), when they have no guarantee that the government will give them a concession over the property on which they are going to build the project. Obviously, the logic in this article was flawed. The applicant should be required to present proof of ability to provide the bond upon the concession being approved, and in the event that the concession is not approved, should not stand to lose the bond. Article 9 was also discussed, as it includes a 60-metre easement along the coastline. Currently, this easement is limited at 22 metres. It appeared to be agreed upon, that the easement would be left at 22 metres. More information will be made available as the discussions continue.
Last modified 26-Sep-2007 17:38 -0400 |
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