I want to restore a building, what do I need to know?
Buying and renovating a building in Casco Antiguo is an enjoyable, and sometimes profitable, venture that will be enhanced by a good understanding of the process and issues involved. We hope that the following steps are a helpful guide.
a) Determine your goals and learn the rules. The first step is to clearly identify your goals. Are you looking for a house for private use? A building to convert into a condo? Is commercial space important to you? Views? Parking? Each building has its own characteristics and, because of the historic preservation rules, your project’s features will be largely dictated by what currently exists on the property. You can obtain a copy of the historic preservation rules from Oficina del Casco Antiguo.
b) Research the costs involved in renovating. As a rule of thumb, gut renovation construction costs for condominiums start around $100 per square foot and can go up considerably from there. Soft costs can range from 15-30% of construction costs. Understanding this upfront will help you determine the size of the project you want to take on.
c) Find the right building. Typically your search will start either on the websites of brokers working in the area or by walking the streets looking for signs on buildings that appear to fit your criteria. Because there is no comprehensive multiple listing system in Panama City, we recommend working with a licensed real estate professional. They typically have many more listings than they put on their websites and often have a walth of knowledge regarding attributes of specific buildings that may not be apparent from their fasades (e.g. views, internal courtyards, historical significance, future nearby projects, etc.) They also know which buildings are problematic.
d) Find the right architect. An architect experienced in the Casco is essential for two reasons. First, historic building renovations are inherently tricky. They require very careful site analysis, knowledge of traditional building materials and the willingness to delve into a level of drafting detail that is unusual in new construction. They also require knowledge of the historic preservation laws in the Casco, and the procedures for getting projects through the approval process.
e) Do your diligence. Once you have identified a potential building, several items of due diligence are necessary. First, consult with Patrimonio Historico to determine exactly what historical preservation guidelines apply to that specific building. For instance, if you are told that the building has an opening for parking, confirm with Patrimonio Historico that it is so. Second, determine if the building is occupied and, if so, how many residents are in the building. Do not attempt to negotiate a desalojo using an attorney who does not have experience in the area. The attorneys who specialize in this type fo work know the neighborhood dynamics and how to approach the process. Using an inexperienced attorney will cost you time and money, and may have implications far beyond your project.
f) Settle on closing mechanisms. Once you have found a property you like, work with your attorney and broker to establish closing mechaniscs that fit your timetable and needs. Closings in Panama are typically much simpler affairs than in the US. They can be handled remotely through powers of attorney and wire transfers or lovally by a visit to the notary and a certified check. In all cases, a reputable attorney is a must. If you do no speak Spanish, find an English speaking attorney, but do not be mislead into believing that good language skills and slick marketing translate into good legal skills. Ask around, interview and get references.