Panama has no title insurance industry doing verification on your behalf. Your protection is the due diligence your own attorney performs during the two-to-four week window after signing the promise-to-purchase — and what that period covers is largely determined by what you ask for.

Here is the complete checklist, in the order it should be worked, with what a failed item means for the transaction.

1. Registry and ownership

• Confirm the property is titled and registered in the Public Registry, with a finca number. If it is rights of possession, stop and read our guide on titled property vs rights of possession before going further.

• Verify the registered owner matches the person or entity selling. Mismatches happen — inherited property where the estate was never transferred is the classic case.

• Review the ownership chain for irregularities.

• Confirm capacity to sell — that the seller is legally able to transfer, including spousal consent where applicable and proper corporate authority if a company owns it.

If this fails: do not proceed until it is resolved at the seller’s cost. An unresolved ownership defect is not something to fix after closing.

2. Liens and encumbrances

• Search for mortgages registered against the property

• Check for judicial liens, embargoes, or pending litigation

• Look for easements and servitudes affecting use or access

• Identify usufruct or occupancy rights held by third parties

If this fails: encumbrances must be cleared before or at closing, usually from the sale proceeds, with the mechanism written into the purchase agreement. Never accept an assurance that something will be cleared later.

3. Tax status

• Confirm property taxes are current. Arrears attach to the property, not the seller — you inherit them.

• Obtain a tax clearance confirming no outstanding balance.

• Check whether the property is registered as Family Patrimony, and understand that you will need to file for the exemption yourself after purchase. See our property tax guide.

• For new construction, ask what exoneration applies, for how long, and get it in writing from the developer.

4. Condominium and HOA matters

For any apartment or property in a PH (propiedad horizontal) regime:

• Obtain an HOA solvency certificate confirming no outstanding fees

• Ask for the actual monthly fee, not the advertised or historic figure

• Review the reserve fund position — an underfunded reserve means future special assessments

• Ask about pending special assessments for repairs or upgrades

• Read the PH regulations, particularly any restrictions on renting, short-term letting, or pets

If this fails: unpaid HOA obligations and a depleted reserve become your problem after closing. This is one of the most frequently skipped checks and one of the most expensive to skip.

5. Physical property and boundaries

• Verify boundaries against the registered plan; commission a survey on land and larger parcels

• Check for encroachments from or onto neighbouring property

• Confirm legal access — that a right of way exists and is registered, not merely used in practice

• Commission a building inspection, especially on older construction. In the highlands, check specifically for damp and mould; on the coast, for salt-air corrosion

• Verify utilities are connected and legal — water, power, sewerage

6. Permits and legal use

• Confirm construction permits were obtained for the building and any additions

• Check the occupancy permit exists

• Verify zoning permits your intended use — particularly for short-term rental plans

• For coastal property, confirm compliance with concession and setback rules

If this fails: unpermitted additions can require regularisation or demolition, and can block a future sale. Price it in or walk.

7. The transaction itself

• Escrow is arranged with a specialised company and clear release conditions

• The promise-to-purchase specifies what happens to your deposit if due diligence fails

• Your attorney is independent — not the seller’s, not the listing agent’s

• Power of attorney is prepared and authenticated if you will not attend closing

• Closing costs are estimated in writing

The one-page version

What buyers most often skip

• The HOA reserve fund. Everyone checks the monthly fee; few ask whether the building can afford its next major repair.

• Independent legal representation. Using the seller’s or agent’s attorney to save a fee removes the only person in the transaction working solely for you.

• Boundary verification on land. Registry boundaries and fence lines are not always the same thing.

• Permits on additions. That extra room or enclosed terrace may not legally exist.

• Escrow. Sending funds directly to a seller or agent to speed things up is the riskiest shortcut available.

Frequently asked questions

How long does due diligence take in Panama?

Typically two to four weeks within a 30–60 day transaction. Land and rural property with survey requirements can take longer.

Who pays for due diligence?

The buyer, generally as part of legal fees (0.5–2% of the purchase price), with surveys and inspections charged separately.

Do I need a survey?

For apartments in registered PH buildings, usually not. For land, houses on their own parcels, and rural property, yes — boundary disputes are among the more common problems and a survey is cheap insurance.

What if due diligence uncovers a problem?

That is the point of the period. Depending on what the promise-to-purchase says, you can require the seller to resolve it, renegotiate the price, or withdraw and recover your deposit. Make sure those rights are written into the agreement before you sign.

Considering a specific property? Book a free consultation — we will tell you what to verify on that listing in particular.

General information only, not legal advice. Due diligence requirements vary by property type and location. Engage an independent Panamanian attorney.

Sources

• Relofirm — Buying Property in Panama: Legal Guide (2026)

• PanamaRE — Step-by-Step Guide for Foreign Buyers

• International RE — Panama Foreign Buyer Legal Guide (2026)

• Prime Solutions — Panama Escrow Guide