Another Bella Vista house goes

Latest victim of the construction boom

The Arosemena house in Ave. Justo Arosemena.

Another landmark building in the Bella Vista sector of Panama City has gone. The historic home of a former president on the corner of Ave Justo Arosemena and 42nd Street was torn down last week by the new owners.

"I was surprised to see it go so fast" said Luis Carlos Arosemena. His grandfather, Alcibiades Arosemena built the large multi-family home in the early 1940s and gave apartments to each of his children. He lived there during his short presidency in the 1950s.

The old house was full of memories and the family was sad to see it go. The common owners, all family members, sold the property together.

Luis Carlos' 97-year-old aunt and a sister of the former president, moved out two weeks ago.

The Gariche Trail, Panama’s oldest highway?

A journey down the road of the ancient people

By David Dell

Archeologists have established that in the western part of Panama, people have lived for about 2,400 years. Many people I am sure are familiar with the great archeological treasures of Sitio Barriles in Chiriqui. I am also sure that few individuals are aware of the existence of Panama’s oldest highway – the Gariche trail.

It was a warm sunny day in October when I ventured on what was to be a long, exhausting journey along this ancient thoroughfare. My guide was José Luis Landau, owner of Sitio Barriles. He had told me that in 2001, a group of German archaeologists from Berlin’s Free University theorized there was a trail running all the way from Puerto Armuelles on the coast, direct to Sitio Barriles, 6 kilometers west of Volcan. The total distance of the trail is more than 40 miles.

The highway still gets plenty of
local traffic.

We arrived at the small hamlet of Gariche and were joined by a class of local schoolchildren. This was no doubt a welcome break from the humdrum routine of school life. The youngsters set off at a good pace down the hill toward the Gariche river. The trail roughly follows the course of the Gariche river and several times crosses its tributaries.

For most of its length the trail is a narrow gorge about 15 feet deep and about 4 to 6 feet wide. It is easy to believe that this trail was not carved out by the water, but was worn down to its present height by thousands of ancient travelers. The trail has just enough room for a horse or a single file of people. The composition of the base of the trail is small, rough rocks… very rough rocks. At times even the horses were having difficulty maneuvering around the tight twisting curves of this ancient highway. After an hour and a half of tough hiking we reached the one piece of evidence that gives this trail its authenticity. The Gariche Petroglyph. I was disappointed to find, not a multiton megalith, but a small stone barely 2 feet across. But this stone, insignificant as it might first appear, has some startling similarities to the larger stones at Sitio Barriles. It links several spirals that experts believe represent small towns or villages along the route. There is another, larger petroglyph close by. This stone is devoid of the usual markings but does appear to show numerous local springs and water sources.

Chiriqui is rich in ancient artifacts. This might well have been the main landing place of the Ainu seafarers about 2,400 years ago. They brought a rich and sophisticated culture to the American continent. One just has to see the ornate and exquisite jewelry on display at the national museum to realize that these ancients were culturally far advanced.

We encounter a signpost — a petroglyph at the side of the trail.

More questions than answers.
The questions about the Gariche trail are many. Why did they travel so far north to Barriles? Why not live on the coast? How many years did they travel back and forth along this ancient rocky road? The most intriguing question of all is, did the eruption of the Baru Volcano in 600 A.D. cause their sudden disappearance?

Visitors welcome.
The Gariche Trail remains in constant use, 2,400 years after it was first carved out. Farmers, schoolchildren and the people of the area walk its long, rough pathway every day. Modern development has obscured most of the trail but visitors can hike this ancient "road less traveled." In Volcan, turn left at the Agro-Chemico store and head west to the El Valle school. Then you have two kilometers of unpaved road before you reach a fork. Turn left and after a further eight kilometers you reach the small community of Gariche. Locals will direct you and might even, for a small fee, guide you along the trail. Bring sturdy boots and lots of water. The road to Gariche does require a sturdy 4x4 vehicle.

Caveat emptor—with the help of Panama’s new laws

By Steven Rich, Marketing Manager for Panama Offshore Legal Services

Panama strengthens the rights of consumers when purchasing real estate and other goods and services. A year ago, Panama enacted a law prohibiting advertising fraud by real estate developers. Now a new law specifies additional rights for buyers.

Law 45 of 2007 (known as The Consumer Protection Law) prohibits clauses in contracts allowing excessive delays or limiting the rights of consumers. If the delivery of services or goods takes too long, purchasers have the right to end the contract without penalties. This new law prohibits contracts calling for penalties such as loss of down payments or installments if the contract cancels through no fault by the purchaser. Sellers no longer have the sole right to cancel the contract. This new law eliminates the cancellation of contracts by developers wishing to resell for greater profits.

Abusive clauses will become invalid if the contract excessively favors the vendor. What does that mean?

Abusive clauses are defined in the new law as follows: Those restricting the inherent rights of consumers by limiting the obligations of the vendor. Those that excessively favor the vendor; or exempt the vendor from personal injury liability; or allow the vendor to cancel or modify the contract (unless the purchaser fails to comply); or require consumers to waive rights in advance; or waive rights of consumers to take legal action. Other abusive clauses are those which are illegible; or written in a language other than Spanish.

A contract is also illegal if it allows excessive time for completion. The consumer now has the right to terminate such contracts without being subject to any penalties.

New residential construction projects must establish clear written terms and conditions of the guarantee of workmanship. All advertising must be truthful. The consumer will have the right to demand fulfillment of such advertised promises. Every contract must specify delivery or completion dates unless the property is available immediately. Consumers have the option to terminate the contract if those dates pass without any penalties. The exact price and adjustments for increased cost of materials must be in writing. Consumers have the right to demand proportional price discounts for new construction when final specifications change substan-tially from what the contract stated.

Panama’s Consumer Protection Agency (Autoridad de Proteccion al Consumidor y Defensa de la Competencia) will create rules and regulations for enforcing this new law in the near future. This agency also investigates complaints against developers and real estate agents regarding false advertising and breach of contracts.

Aside from this new law, other Panamanian governmental agencies regulate the real estate construction industry.

Law 6 of 2006 prohibited fraud in advertising in the construction industry. On May 16, 2007, The Ministry of Housing (MIVI) created regulations preventing developers and their promoters from advertising or selling properties before the Master Plan approval, facing fines up to 1% of the entire project’s value.

In the meantime, Panama’s National Authority of the Environment (ANAM) recently levied a $930,000 fine on a real estate tourism development for illegally cutting down trees that threatened the local ecosystem. The company failed to comply with their approved Environ-mental Impact Study and began other projects without a proper evaluation of the environmental impact.

In 2004, ANAM imposed a record fine of $1 Million against the developer of a large project in Panama.

Local courts are now ruling against property developers too. On November 27th, a Panama Superior court ruled against another property developer by declaring certain sections of a purchase contract null & void because they were "abusive". One clause allowed the developer to rescind the contract and to keep the buyer’s deposits. Another clause allowed the developer to stop construction without any compensation to the purchasers or liability for damages caused. The last clause dealt with price increases because of rising costs of materials. However, this ruling does not create a precedent meaning that it does not have to be followed by other courts with similar claims.

Panama is quickly protecting consumer rights in order to bolster foreign investments.

They put it through professionally and fast

Let a mortgage broker handle your property loan

Pan-American Mortgage Bro-kerage, a Miami company recently opened a branch in Panama because some of their clients bought property here. Since more than 50 per cent of their clients in the U.S.A. are foreign nationals from Europe, Canada and Latin America, they are used to working with customers new to the country, often with a language barrier.

The Visitor asked Mr. Yuri Gusev, vice president of Pan-American Mortgage Brokerage to answer some questions.

Do you see a lot differences for the borrowers in the process of obtaining a mortgage in USA and in Panama?
Absolutely! In the US the underwriting process is mostly based on a computer decision and borrower credit scores vs manual underwriting of each loan application here in Panama. Panamanian banks require more documents from the borrower, especially foreigners, and aproval takes longer.

How many local banks are you working with?
Almost all local banks. About 15-16 banks work with residential mortgages, and I would say another 5-6, which work only with commercial loans, including construction loans.

The requirements of local banks are very similar aren’t they?
Not really. Even though all local banks require the same documentation, they have different loan requirements. For example, some banks allow foreign borrowers to have as many mortgages as they can qualify for, while others allow only one or two. Some banks will finance a maximum of $1200.00 per sq meter, others up to $1500.00

Because of the real estate boom here, banks are adjusting their mortgage guidelines and requirements. This makes the situation even more confusing for foreign borrowers and our company tracks all those changes.

Do you work with US banks, which provide mortgage financing for properties in Panama?
Currently there is one US bank doing this. We are approved with this bank. They require the same type of documentation as local Panamanian banks and it is not necesarily the best option. It is available only for US citizens and US residents. Also local banks in some cases offer better terms and rates. I always advise our clients to review all the options available.

Is the role of a mortgage broker here in Panama similar the to US?
In the USA mortgage brokerage is a very developed and well--regulated industry. More than 60% of residential loans are generated through mortgage brokers. Here in Panama mort-gage brokerage as a service is just starting to develop.

A service has been available here through some real estate agents and attorneys who offer clients various services, like immigration documents, regis-tering an offshore corporation, selling and buying land and properties etc. but assistance with obtaining a mortgage is not their specialization. The loan application is submitted to the bank without prior analysis and often denied.

Another group of mortgage brokers has "virtual" presence here in Panama. Usually they are located in US or Canada. But it is almost impossible to close the loan when you are not here in Panama.

We have a trained staff with 10 to 15 years local banking experience. Each loan is processed quickly and each borrower gets personal attention. Clients receive a constant update.

In US there are thousands of mortgage products available for the borrower. In Panama, only one. That is a full documentation loan with full payment (principal and interest) and adjustable rate. There are no stated loans, no interest-only loans etc.

Here we help borrowers to apply simultaneously with several banks. Customers can email us all the documentation and later on when they come for the closing they bring the originals with them or they can simply send them to us through Fedex or DHL.

There is also a lot of leg work involved, when we physically have to visit the banks to follow up with the application. We help our clients to save a lot of time and money. Our customers do not need to come here often, buy expensive airline tickets and spend their precious time visiting the banks.

Finally I would like to wish all of you happy holiday season, Merry Christmas, and Happy New Year!.

Volcán Barú and La Yeguada

They’re dormant but still bubbling

When the US Congress was debating where to build an inter-oceanic canal on the American continent last century, Nicaragua produced a postage stamp showing a volcano.

This is said to have been used by the proponents of the Panama route to dissuade the American politicians from choosing Nicaragua as the canal site.

Panama itself has the remnants of several volcanoes although not as active as some in neighboring countries. This was probably unknown to the builders of the Panama Canal.

The best-known is the Volcán Barú (also known as Volcán de Chiriqui). It is the tallest mountain in Panama at 3,474 meters (11,398 feet) high.

Volcan Baru is a dormant volcano just south of the Continental Divide in the western Chiriquí Province. It is surrounded by a fertile area of cool highlands drained by the Chiriquí and Caldera rivers. The towns of Volcan and Cerro Punta are on its western side, while Boquete is on the eastern flank. The last major eruption of the volcano is said to have been about 500 AD, but there are reports and some evidence of a minor eruption around 1550.

View of Volcan Baru.

In the Central provinces is La Yeguada, 1297 meters, or 4255 feet high. It’s last known eruption according to vulcanologists was in 1620. La Yeguada is also known as Chitra-Calobre, and is a massive volcanic complex located in Veraguas Province, north of the Azuero Peninsula.

The region was explored by several Panamanian adventurers who discovered that the mountain range was not the home of a volcano, but more of a cauldron.

A Nasa perspective of the volcano at El Valle.

The closest volcano to Panama City is El Valle, 1185 meters or 3888 feet high.
El Valle is a lava dome complex comprising of Cerro Pajita, Cerro Gaital and Cerro Caracoral, peaks which are a part of this volcano. El Valle underwent an explosive eruption about 3 million years ago, forming a crater 5 kilometers (3.1 miles) across, one of the largest in the Americas.

Whatever was then living in what is now Panama City and on the route of today’s Panama Canal must have been quite shaken up by the event as the huge boulders scattered around the country tend to suggest.

There are many signs that, even though the El Valle volcano may have been dormant for millions of years, things may still be bubbling underground.