The National Assembly of Panama has recently approved Bill 421, which limits the abusive real estate developer’s practices.
Developers who charge a deposit from purchasers must now sign a bond/guarantee with Panama’s Ministry of Housing and Land Management. This secures the buyer if the developer abandons the project where the bond will be used to repay the buyers deposits.
For contracts between buyers and developers with clauses that allow for them to raise the price of the sales price due to increased costs of building materials, they are now capped at a maximum of 2% of the total price of the property. The developer, in this case must also be able to prove or demonstrate that the costs of the materials for the building actually did increase through thorough documentation.
Lastly, the developers of these projects in Panama are now required to deliver projects with adequate water and sewer connections and services before anyone moves in.
More protection for the buyers will only help to increase demand in real estate giving developers an extra boost in home sales in Panama.