Life in Panama and How Not to Get Ripped Off
Posted: Tuesday, December 01, 2009
by Aurelia Masterson
Panama Legal
Introduction – This is written for the newly arrived foreigner living in Panama, an Expat or Expatriate if you will. We are going to describe ways to not do things and ways to do some things. We are going to run down some of the common scams, flim flams, etc that you may encounter in Panama or in any other country for that matter, these games are even played in places as far away as Bangkok.
Panama Real Estate Scams - What we hear is more like this: I met John and Mary from a yahoo forum or a bar in El Congrejo and I thought they were such nice people. They told me about this great Panama Beachfront Property they were investing in and asked us if we also wanted in. They seemed so nice and warm and they really seemed to know what they were doing. We finally said yes. We did not go out and get our own independent lawyer to advise us; instead we used the lawyer they referred us to. Now it turns out the property had no clear title, the seller disappeared with our money and we are left holding the bag. John and Mary also said they lost their money but well we are not so sure about that and they are now gone too. This is more like the type of things we hear at our law firm.
Remember if the corporations and foundations holding the real estate are not in order the sale may be null and void because the corporation you are buying from may not really own or be able to own the property. It can be complicated and that is why you need good independent legal advice. There can be glitches with title especially regarding use rights. Contracts need to be in Spanish. How is your knowledge of Spanish legal terms? Panama uses a Roman law system without any case law. How good are you at a Roman type legal system with no case law in Spanish? See what I mean.
You need a lawyer to read anything you sign. Do not get a lawyer associated or affiliated with any of the parties – the friends, the other investors, the seller, any of the real estate brokers. The term is conflict of interest. Better yet enjoy your new friends but do not invest with them, do not talk about finances with them, and just keep things at an arms length for a few years. The con men that keep themselves available to befriend newcomers like you will soon lose interest in you. They do not need or want any new friends; they are looking for marks or targets.
Panama Short Money Hustle – This is street scammer slang for a scam to get a small amount of money from you - thus the term short money. Say you want to buy a necklace made out of oyster. Your new friends from the forums that lives here and really know their way around says – Oh we know this guy that makes beautiful jewelry he'll even bring the stuff over. They call Juan the jewelry maker and he comes over bringing the types of pieces you are looking for. Your new friends really like the jewelry too, imagine that. They think the prices are fair too, wow. Now you buy something and so do they. They buy it for real. What you don't know is Juan jacked up the prices and got enough out of you to give them the piece for free. Now you see your new friend wearing the jewelry some weeks later and this instills faith in your new friend. While you are still green in Panama they pull this on you a few times with different products – could be Panama Hats, furniture or maybe with a plumber, contractor, seamstress, auto repair whatever. If they think it is going to be a one time hit they will just get cash back from the jewelry seller. Gosh this is very common here in Panama. People in Canada, USA, UK, Australia never think of doing such things to newcomers in their country so they are wide open for this type of scam.
Taxi Driver Hustle – Oh wow we find a nice taxi driver who really knows English. Gee he takes us shopping and he even goes in with us and negotiates prices. Duhh!! He is negotiating in Spanish his commission and making sure your prices are high enough so he gets paid. When you go to restaurants and he goes in to see if there is a table while you wait in the air conditioned taxi he is trying to see if the restaurant will give him a commission, usually 10% for him bringing people to them. Generally the restaurant will be good and be busy so no worries there – he doesn't want you mad at him for taking you to a dump. If you are just a tourist and like the driver and figure heck he has got to eat to, well then just go for it and have a good time. If you are living here and using the guy a lot while you settle in just understand prices are getting inflated for you to pay him. Want to see how things work in Latin America for real. Go to the driver and tell him you will present yourself as a gringo to the restaurant and pay menu prices and he is to deduct half of the 10% he gets from his bill to you. He'll do it because he knows how the game is played. Try it not for the money but so it gets ingrained in you how this place really works, plus you might have more fun than you had in a long time. Just because it is how things work does not mean you cannot beat the system here. Think outside the box.
Workmen Hustle – Warning is called for here first. Workmen that come to the home have been implicated in numerous home invasion robberies. Generally it involves a single-family house. They bird dog the house for the thieves who are often Columbians. They spot the expensive valuables, they might see a substantial safe, which means money, and so all safes need to be hidden from view like in a closet with a dead bolt lock or some place really out of sight. When the home invasion thief has the barrel of the gun in your mouth you will be only too glad to open the safe. So how do they get in? Well the workmen can disable a lock on a door or window. They can disconnect an alarm switch so that it will not throw a signal. Never open the door to someone just because they are knocking and tell your maid if she does this she is gone too. Most of the maids will know better and actually protect you from this since they do not want to go through being tied up, possibly raped etc. If you are living in Panama City get a Condo with the security guards. Maybe a couple of years later you can get a house. In the outlying areas houses are fine but not for newcomers in the city stick to a condo.
So the workmen do the work and say all is well the repairs are done and leave. Then you find out all is not fixed. Never ever let them leave and never sign any completed work order until you verified that everything works. Most of the time all will not be working correctly, not some of the time, almost all of the time. They are sloppy. This really applies to the phone companies, cable companies etc. They will tell you your cable works and it doesn't. They get you to sign off and they leave. That night you go to watch TV and it does not work. Now you have to wait another four days or longer for a new appointment. You get a locksmith to change locks and make new keys, check every key thoroughly.
If a workman wants a deposit for supplies etc you must get a receipt that states what it is for and that there is other work to be done and when he will do it, etc and get a copy of his cedulla and you both sign it or at least him. Just give him money and he may come back in a few weeks or not at all. Never ever pay all until it is completed no matter what the story is. If he cannot afford to pay his labor and buy raw materials treat it as a warning sign and get someone else.
Maid Hustles – So now you are so happy you have a wonderful maid. Do check her backpack when she leaves to go home for her day off. Don't be shocked when you find a five pound roast in there plus all other sorts of foods, heck people get hungry on those bus rides to the interior. You may not know that maids have cell phones but they do and they are prepaid and they hate to pay for calls. What is done is the maids call their friends and family (to their prepaid cell phones) from your home phone. Well this costs you a lot. They do not call their maid friends and relatives on their home phones since the other employers do not like that. You can get hit with $100 a month or more from these maid calls to the friends cell phones. Put in a security code or password which must be punched in to dial a cell phone or make a long distance call and never give this to her. They also run up long distance calls on the landline. Under Panama Law you cannot deduct the phone calls made without permission from her pay. You must pay her in full and then get her to pay it back. She will probably quit and not pay you back if it is a lot of money for her.
She may insist it was not her, etc. Make sure the maid cannot dial up any pay movies on the cable. Maids are notorious for watching TV when no one is home; they watch cartoons a lot (no I am not kidding). Maids steal clothes from the women in the house. Gringo men are often larger than the local boyfriend. Check the references on the maids seriously. No references, no hire. Watch them closely for a few weeks. Have a two-week trial period. Contracts in writing. Be mindful of boyfriends who may try to corrupt a nice maid, it is a common theme. Get a serious dead bolt on a bedroom closet and keep the valuables like jewelry in there and keep it locked with key hidden somewhere until you think you can trust the maid. This is if you do not have a safe. You could do same with for the bedroom and keep her out of there when you are not home. Maids have also been known to cause disappearing kitchen appliances, nice pots and pans, expensive knives, etc.
Duty Free Hustles – The duty free shops in Panama look like they have good prices. Bear in mind they will pay your taxi driver a commission of 25% to 40% on what you buy at those seemingly good prices. This is common worldwide by the way. Hey use the taxi driver to get you the discount and credit it against your bill with him. If you are hiring him by the day $100 is about right for the day with his car and gas so have the kickback go towards the bill. Explain this to him. If he does not agree make him park 100 yards away and tell him you insist on going in yourself and will not acknowledge that you know him if he comes into the store. He will not like that and will play ball with you. He may get 40% and try to tell you it is 10%. It is at least 25% I understand so you can decide how hard you want to play with him. Now the duty free shop got real cheap all of a sudden.
http://www.panamalaw.org
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