Farm plans on hold due to authority dragging their feet
This is another follow-up article about our issues with aquiring land in Panama. It is now more than a year ago that we signed a promise to purchase contract and paid a significant amount of money to the owner of rights of possession on a strip of land in the eastern part of the Panama province. Initially all went well and we were starting to get to work the land. We even put some work in building a new access road by extending an old trail. But at some point the former user of the land decided to step back from the deal and although on paper we have been handed over the right of possession we were effectively denied access by this person. The local office of land reform has not been helpful and by not taking any action actually permitted the former user to deny us access to the land.
Back in March I wrote about a visual inspection of the land in question and the fact that local authorities fear to act. Although it looked like we were close to a solution it eventually turned out that this is going nowhere and our lawyer managed to get the case be forwarded to the head offices in Panama City. Initial meetings with the lawyers there confirmed our existing right to the land but then they too started to drag their feet. While they were having us wait the former user appeared at the head office with new lawyers representing him and started to whine and threat as he has done before at the regional office. His way of objecting hasn't changed a bit. He tells people we were in violation of the contract without showing any proof for that. The authority does not insist on getting proof shown. Then he cries and presents himself as a poor campesino who doesn't want to loose his land to a big foreign corporation. He talks about the big foreign corporation because the contract between him and us is in the name of a Panamanian corporation whose principals are we and we are foreigners.
Our lawyer presented the head office with lots of evidence about our true intentions and that we are sincere about doing agriculture on the land plus the fact that we have been and intent to further employ local people while the former user never provided any significant income to anyone. That point is important as the law governing land use specifically talks about the social function which is to provide a tangible benefit to the people.
Things in many meetings between our lawyer and the representatives of the head office of land reform have slowly been shifting to our side but the former user still had them blocking us. Lately he dropped all the other stuff from his story and focused simply on his fear that we might not pay him the remainder of the purchase price according to the rules laid out in the contract.
Well... We did perform all our duties specified in the contract. He passed his right of possession over to us which has been his only duty based on the contract. So there is actually no reason to believe that we may screw him over during the titling process which is the next step as specified in the contract. He simply wants to keep the downpayment and the land and basically steal the money from us. We learned from reliable sources that he did the same with another foreigner before.
So another few months went and passed and all the while nothing really moved because the former user kept pretending he were fearing we might not pay him. While he did that he was renting the land out to someone (which is strictly illegal under the law governing land use; but nobody bothered about that) and he did other actions aimed at getting some financial benefit out of the land while denying us - the legal buyers - access to it.
It became very clear a long time ago that basically the authorities were kind of collaborating with him. We would have lost already a while ago, if our lawyer were not reminding the office of land reform that they are actually overstepping their boundaries and it might be seen as they were helping the other guy to fraud us.
Some reading this might ask themselves where does that guy get the money for his lawyers from. We learned that he does not retain any lawyer at all. He simply tells the story about the big foreign company and there is always a lawyer who thinks he can earn a little fortune by making the big foreign company pay up. As a funny tidbit I can tell that one of his lawyers after learning about all the details he did not tell even asked us to pay his fee in exchange for stopping to block us at the office of land reform. I think it doesn't get any clearer. On the other hand that tells a story that might worry quite a few potential foreign investors. As there are many "starving" lawyers and much is done through negotiation and authorities are afraid to act also on paper everything is clear, there is a lot of opportunities for even the poorest but streetsmart guy to set up a trusting foreigner. Well connected locals have ways to deal with that but those ways (let's not get into the ugly details) are not recommendable for foreigners.
As I write this there is some new movement in the case but I should not be writing about this just yet. I'm confident that in time this will be solved in our favor but for the time being our plans about setting up a cattle farm have been on hold.
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