In Panama there exist two types of properties: “Titled Property”, and “Rights of Possession”, known in Spanish as Derecho Posesorio. This article will focus on the background of rights of possession property and how you can buy it and title it. In the 1960s, former president Omar Torrijos instituted rights of possession land reform with the purpose of providing farmer’s means to obtain legal rights to the land they farmed.

The land reform has now been extended beyond just farmers and has resulted in some confusion over legal rights to land ownership. Rights of possession, also known as “squatter rights,” does not provide the possessor with a title, therefore ownership can be contested.

Rights of possession property, is owned by the state, which is then possessed, or more appropriately “occupied,” by Panamanian individuals over a long period of time. Possession rights do not result in an individual obtaining a title, but rather individuals are granted a certificate of occupancy issued by provincial officials or governmental organizations, such as the Agrarian Reforma (Agricultural Reform Office).  Certificates granted are legal binding, even in the absence of a title.
Since only the right to occupy the land is granted, one cannot use the land as collateral for applying for a loan or as an investment when apply for a residency visa.  It should be noted that possession rights property does not incur property taxes, although registered improvement do incur local and/or national taxes. Also, right of possession property may be sold, but only the right to occupy the land is sold, not the property itself.
All rights of possession property are actually owned by the government, but one is able to purchase the property from the government and endure the process of having it titled. However, there are some regulations, for instance, no possession rights land may be titled in coastal areas, national parks and on islands.
How to Purchase Rights of Possession Land
Follow these steps when purchasing rights of possession property:
1. Promise to Purchase
A down payment is required at the time of signing the promise to purchase contract. This secures the property and allows sufficient time to conduct due diligence and prepare closing documents.  The promise to purchase contract, as well as other documents, are not recorded in the national registry, instead they need to be authenticated by a Notary Public. 
2. Due Diligence
Obtaining evidence and previous information regarding the properties legal condition, previous or current occupiers, etc., can be difficult. Opposed to titled land, rights of possession land has no central database for information on property, which can make it difficult to perform your due diligence before buying. 
With that said, here are some steps to follow in order to avoid potential pitfalls:
Review the Verification Certificate of right of possession. A certificate should have been issued by either the local municipality or a government entity which must contain the name of the holder, an accurate description of the property, including location, size, boundaries, limitations and any encumbrances.
The property must obtain an inspection certificate which needs to be signed and stamped by an authorized surveyor. It must identify the name of the owners, location and match the same information in the rights of possession certificate.
Inspect the property. Make sure that the land is not occupied and has no opposition by third parties. Also, it is necessary to have the land inspected by an expert in order to identify and mark the property’s boundaries. It is advised that you place a fence on the property’s boundaries, as well as confirm the boundaries with any neighbors to ensure no future conflicts will arise.
The use of rights of possession property is regulated by the government. It is necessary that you first check with the proper authorities to ensure that your future plans for development will be permitted.
3. Buy-Sell Contract & Transfer of Rights of Possession Certificate
The final balance is due upon signing the contract of sale. Following the final payment the right of possession certificate is transferred to the name of the buyer. Since the contact will not be registered in the national registry, it is necessary to have a public notary authenticate the contract. 
How to Obtain a Title for Rights of Possession Land in Panama
Once you have purchased rights of possession land in Panama it is possible to obtain a title. A summary of the steps required to title rights of possession land owned in Panama are as follows:
1. A licensed surveyor must officially inspect the property and formalize its boundaries.
2. A formal request must be made to neighbors to ensure that there is no opposition to the area in question.
3. After all neighbors have formally given consent the Agricultural Reforms Office will perform a second inspection of the land.
4. Once the inspection is approved, the agricultural reforms office will provide a ruling on titling.
5. The value of the land is then established by an evaluation officer. Furthermore, it will be certified by two government officials: the Cadastre and Controller of the Ministry of Finance and Treasury.  The property value is based on its location and price per square meter which is set by the government.
6. Payment is made to the government at the set price and the government will issue a resolution granting a title.
7. The official resolution and property documentation is sent to the Public Registry to receive the title.
The entire process from buying rights of possession land to obtaining a title could take up to two years, but a more common time frame is 10 to 12 months.