Giselle Moncada de Vasquez, senior associate, Morgan & Morgan
The loan agreement secured by mortgage is a legal and financial concept that has undoubtedly been a pillar of world economic progress. Hence, the Supreme Court of Justice of Panama in some of its judgments has given it its importance as part of the economic public order.
Certainly, this optimal progress is possible as long as the majority of the debtors pay off the loan punctually, and in cases when they are not able to comply with said payment to its creditor, by activating a mechanism to achieve the expedited collection of the real mortgage loan through a safe conversion system.
Mortgage loan or security trusts
It is important to mention that in recent years the lenders have increased the use of security trusts to guarantee their loans, instead of loans secured by mortgages. Despite of the benefits offered by security trusts to creditors and customers, there is another sector of the market that keeps using the loan agreement secured by mortgage.
Recovery process of mortgage debt
The success of the legal concept of mortgage loan requires the summary proceeding of the real estate guarantee, for cases in which the loan falls into arrears. In the Panamanian legal system, the judicial process generally used for the collection of this type of mortgage debt is the so-called “executory process with waiver of procedures”, thus we have a process that is very special and very summary at our disposal.
The reality is that the aforementioned process is not usually as expeditious as it faces delays both in the processing of the judicial process itself, in the procedure following the registration of the award (mainly in the physical taking of the auctioned property), until achieving the actual sale that is when the collection shall be satisfied.
This time we will list five lines of action that would reduce the harmful damages of a delayed and deficient conversion of the liquid asset through the aforementioned collection process:
- To apply to the Judicial Branch for an adaptation to the regulation of the way these processes are distributed in the Single Window System [known as Registro Único de Entrada (RUE)] so that judges who have links with credit entities, when the latter are executors, can be previously excluded from each distribution. In practice, the processing of a judicial impediment of this type can delay the admission of a process more than two months. The foregoing would even enhance the valuable time of our judicial officers.
- To insist on a procedural reform that empowers the Judge who is acquainted with the execution process, to order the eviction of occupants who do not hold an ownership title of the auctioned property. In comparison to the handling that was given by officials named Corregidores, the eviction proceeding to remove squatters, which is currently the responsibility of the Justices of the Peace, has not presented the improvements in response times expected by users. There are cases in which foreclosed properties are invaded by opportunists who then try dilatory actions in bad faith, postponing the proceeding indefinitely.
- To urge the corresponding authorities (Judicial and Executive Branch) to have the necessary funds for the implementation of Law 12 of May 19, 2016 (Insolvency Law), which creates the Insolvency Circuit Judges and the Fourth Court of the First Judicial District, which would have the power exclusively to hear the bankruptcy proceedings and all executory processes for major claims (that is, also the executory process with waiver of procedures). Despite the fact that the Law came into force on January 2, 2017, the aforementioned judicial offices have not yet been created nor have their personnel been hired.
- To benefit the real estate tax situation of the guarantees auctioned or granted as payment in kind. At the moment, the cadastral value of a property is raised considerably with interest, fees and legal expenses when auctioned or granted as payment in kind. The clearance of said property becomes even more difficult for its later sale if the debtor of the loan omitted to declare the improvements before the auction. This hinders its immediate sale while trying to resolve the tax situation.
- To promote in the population the culture of managing their budget properly and emphasize this teaching from school education. Although sometimes an unpaid debt can be due a health problem or loss of employment, the vast majority of cases seem to be resulting from consumerism.
Let us consider for a moment the economic repercussions that a high default rate in the payment of mortgage loans and the impossibility of making the real estate guarantee effective can have at the national level. It is imperative to take the corrective actions mentioned above.
Foreigners with nationalities that require an entry visa may enter Panama with visas from Korea, Japan or Singapore
Executive Decree No. 521 of August 6th, 2018
As of August 8th, 2018, foreigners of nationalities that require a visa to enter the Republic of Panama may enter with a Schengen Visa or current Residency from Korea, Japan or Singapore.
- By means of Executive Decree No. 521 of April 6th, 2018, any foreigner who requires a visa to enter the national territory, holding a Visa or valid residency in Korea, Japan or Singapore, may enter Panama, as a tourist, without an entry visa.
- The Visa must: (i) be granted for multiple entries and exits; (ii) be used at least once to enter the territory of the granting State; and (iii) have a validity of at least six (6) months.
- This Executive Decree became effective as of August 8th, 2018.
Aspects to be considered:
- This Decree includes Korea, Japan and Singapore within the list of exceptions. Previously, the list only included the United States of America, Canada, Australia or the United Kingdom, and those holding a Schengen Visa from the European Union.
With this Executive Decree it is provided that the validity of the visa or residency of the above mentioned countries, must be of at least six (6) months, reducing the time established in the previous decree of at least one (1) year of validity.
By means of the Executive Decree No. 114, as of April 4th, 2018, foreigners of nationalities that require a visa to enter the Republic of Panama may enter with a Schengen Visa or current European Union Residence.
- By means of the Executive Decree No. 114 of April 4th, 2018, any foreigner who requires a visa to enter the national territory, holding a Schengen Visa or valid residence in the European Union, may enter Panama, as a tourist, without an entry visa.
- The Schengen Visa must: (i) be granted for multiple entries and exits; (ii) be used at least once to enter the territory of the granting State; and (iii) have a validity of at least one (1) year.
- The Executive Decree became effective as of April 4th, 2018.
Aspects to be considered:
- This Decree complements the list of exceptions for foreigners that require an authorized or stamped visa, who by holding a Schengen Visa or visas issued by the United States of America, Canada, Australia or the United Kingdom, won’t need to apply for entry visas to the Republic of Panama.
By means of this Decree, the Schengen Visa is reincluded, after being eliminated by Executive Decree No. 591 of December 28, 2016, published in the Official Gazette as of January 2017.
By means of the Executive Decree No. 113 of April 4th, 2018, the Republic of India is included within the countries that require Stamped Visa issued by Panamanian Consulate, to enter the national territory.
- This Executive Decree only applies to nationals of the Republic of India.
- Officials from the National Immigration Authority and the National Security Council will be appointed at the Panamanian Consulates in India to verify the immigration requirements and the security backgrounds of each applicant.
- The cost of the Stamped Visa may not exceed Fifty Dollars (US$50.00).
- Stamped Visas can be granted for multiple entries and exits, and up to three (3) years, according to the verification criteria of the designated officials.
- This Decree will become effective as of June 1st, 2018.
Aspects to be considered:
Nationals of the Republic of India:
- Will not require a Tourist Visa (authorized) nor Certification to file residence (VTR) before the National Immigration Authority, which will considerably reduce the requirements and time to obtain immigration processes in Panama.
Holding a Visa duly issued by the United States of America, Australia, Canada, the United Kingdom or a Schengen Visa, (i) granted for multiple entries and exits; (ii) that has been used at least once to enter the territory of the granting State; and (iii) with a validity of at least one (1) year, may enter the national territory without the requirement of a Stamped Visa (Executive Decree No. 591 of December 28th, 2016 and Executive Decree No. 114 of April 4th, 2018).
As of April 1st, the travel permits for minors must be done only digitally.
- The interested party must access the website of the National Immigration Authority (migracion.gob.pa), then go to the section “Online Immigration” – option “Requests” and thus access to “Minors Permits”.
- Attach the following documents in PDF:
- Copy of Passport (Residents) or Panamanian cédula of the Minor (Panamanians); and,
- Copy of Passport (Residents) or Panamanian cédula of both parents (Panamanians).
- Once the online application is completed, the interested party must carry the printed authorization letter to any of the Notaries nationwide, where they will verify the data and register a digital copy of this process in the electronic platform.
- It is also recommended to carry the original documents to the Airport, since the National Immigration Authority may request them for verification.
- In the event that the two (2) parents travel with the child, they will only require their passports, Panamanian cédula of the minor (Panamanians) or Birth Certificate (Residents).
By Giselle Moncada, Associate, Morgan & Morgan, Chiriquí office
The possibility of buying real estate rests normally on the capacity of an individual or company to acquire debt, reason why credit entities play an essential role in the success of the real estate market. Lately, we have noticed that in addition to the traditional loan guaranteed by a mortgage, there is an offer for loans guaranteed by a security trust.
The vehicle becomes more common every day thus making it essential for consumers to understand it because although it’s been used for such purpose for decades, it’s becoming more popular nowadays to guarantee bank loans.
In Panama, the trust is governed by Law 1 of January 5, 1984, “Whereby matters concerning trusts are regulated in Panama and other provisions are adopted”. This legal figure allows for several uses in the real estate sector as well. Notwithstanding the foregoing, we will focus on the security trust used to finance the purchase of real estate.
Doctrine states that “in a trust with these characteristics, the debtor (trustor) delivers part of its patrimony to a trustee to be kept by the latter, appointing the creditor as beneficiary of the guarantee agreed thereby and to proceed, in case of default, as mandated, to encumber the trust fund. Upon payment of the credit as established in the contract clauses, the trustee shall return the trust fund to the debtor (trustor)”.
The person asking for a loan to purchase property will deliver this to a trustee who will keep it encumbered at the Public Registry until the debtor settles the loan in full. The trust names the creditor as beneficiary since if the debtor defaults the loan, the trustee proceeds to transfer the property to the creditor expeditiously in accordance with the procedures set forth in the trust. However, if the debtor fulfills the obligations under the loan, the trustee returns the property to the debtor evidencing this at the Public Registry. For all purposes, the debtor holds the same rights and obligations of the property owner except for the restrictions established in the trust.
In the event the debtor defaults the loan making its collection impossible, the security trust seems to represent a swift manner to execute the real estate guarantee and more effective the process of converting a bad asset into a good one. This is one of the advantages for credit entities and indirectly, also for consumers seeking more comfortable interest rates since, in theory, a bad or illiquid credit portfolio could affect the structuring of interest and expenses in the granting of loans.
Another advantage is the possibility of designating a substitute beneficiary in case the beneficiary (debtor) dies. Another scenario in case of the debtor’s death is a formal probate process to adjudicate the property.
Such is the usefulness of this figure that on March 18, 2015 Bill 189 was presented to the Assembly of Legislators, which is waiting its first debate at the Commercial and Economic Matters Commission, proposing an amendment to the current trust law. Without going into details, the improvements to be introduced by the Bill include more detail in the requirements that the trust agreement ought to contain, clarification on the exemption to pay the sales tax for the transfer of real estate placed upon trust or in case of return to the trustor or blood relatives up to the fourth degree or second of affinity (although in practice, this tax is not paid upon transfer of the guarantee to the trust or return to the trustor). Among other things, the goal is for this figure to receive the same tax treatment and benefit as mortgages provided that the trustee holds a license issued by the Superintendence of Banks of the Republic of Panama.
Despite its great acceptance among consumers, greater disclosure is needed about this legal figure and its use in financing the purchase of real estate.
 PAPA, Rodolfo G., Trusts for lawyers and accountants, 2014, pg. 300, quotes CAMPI, German, “The Security Trust. Superposition of trustee-beneficiary roles”. Published in the financial supplement for lawyers of Universidad del Cema (Ucema), included in newspaper La Ley of 18/12/2009.
Por Giselle Moncada, Asociada, Morgan & Morgan, oficina de Chiriquí
La posibilidad real de comprar un inmueble depende generalmente de la capacidad de endeudamiento de una persona o empresa, motivo por el cual las entidades crediticias juegan un papel esencial en el desarrollo exitoso del sector inmobiliario. En los últimos tiempos, nos hemos podido percatar que adicional al tradicional préstamo con garantía hipotecaria se nos ofrece un préstamo pero con garantía fiduciaria.
Cada día la figura es más usada en la plaza, por eso se hace indispensable que los consumidores comprendamos la misma, que aun cuando ya se ha usado con ese propósito desde hace décadas, hoy día se ha popularizado para garantizar préstamos bancarios.
En Panamá el fideicomiso se rige por la Ley 1 de 5 de enero de 1984 “Por la cual se regula el Fideicomiso en Panamá y se adoptan otras Disposiciones”. Esta figura jurídica tiene varios usos y también en el sector inmobiliario. No obstante lo anterior, nos vamos a enfocar en el fideicomiso de garantía utilizado en el financiamiento de compra de bienes inmuebles.
La doctrina ha señalado que “en un fideicomiso con estas características, el deudor (fiduciante) entrega parte de su patrimonio a un fiduciario para ser conservado por este, designando beneficiario al acreedor del crédito que por dicho contrato se garantiza, para que, en el caso de incumplimiento, proceda de acuerdo a la manda, enajenando el patrimonio fideicomitido. Cumplido el pago del crédito, conforme lo establecido por las previsiones contractuales, el fiduciario devolverá el patrimonio fideicomitido al deudor (fideicomisario).”
Quien pide el préstamo para comprar una propiedad entregará ésta a un fiduciario que lo conservará gravado en el Registro Público hasta que este deudor cancele todo el préstamo. En el fideicomiso se designa como beneficiario al acreedor del crédito ya que si el deudor incumple con el préstamo, el fiduciario procede a transferir el inmueble al acreedor en forma expedita, conforme a los procedimientos establecidos en el fideicomiso. Pero si el deudor cancela las obligaciones del préstamo, el fiduciario devolverá al deudor el inmueble haciéndolo constar en el Registro Público. El deudor para todos los efectos conserva los mismos derechos y obligaciones de un propietario de bien inmueble; salvo las restricciones que se establezcan en el fideicomiso.
En el evento que el deudor de un préstamo lo incumpla y se haga imposible su recobro, el fideicomiso de garantía parece representar una forma más expedita de ejecutar la garantía inmobiliaria y hacer más eficiente el proceso de reconvertir el activo malo en bueno. Esto es una de las ventajas para las entidades crediticias e indirectamente lo es también para los consumidores que aspiramos a tasas de interés cómodas; pues en teoría, una cartera de créditos malos o ilíquidos podría incidir en la estructuración de los intereses y gastos para el otorgamiento de préstamos.
Otra ventaja de la figura es la posibilidad de designación del beneficiario sustituto en el evento de que fallezca el beneficiario (deudor). En otro escenario ante la muerte del deudor tendría que abrirse un formal proceso de sucesión para adjudicar el bien inmueble.
Tal es la utilidad que la figura está adquiriendo en la plaza, que el 18 de marzo de 2015 fue prohijado el Anteproyecto de Ley 189 en la Asamblea de Diputados y está pendiente de discusión en primer debate por la Comisión de Comercio y Asuntos Económicos, que propone una modificación a la ley vigente de fideicomiso. Sin el ánimo de describir en detalle las modificaciones, por las mejoras que el Anteproyecto podría sufrir, éste establece con más detalle los requisitos que debe contener el contrato de fideicomiso, aclara una laguna sobre la exención de pagar el impuesto de transferencia de bien inmueble por la transferencia de los bienes inmuebles transferidos al fideicomiso de garantía bancario, o en el caso que retorne al fideicomitente o a sus parientes dentro del cuarto grado de consanguinidad o segundo de afinidad (aunque en la práctica no se paga este impuesto al transferir la garantía al fideicomiso o retornar ésta al fideicomitente). Entre otras cosas, se busca dar a la figura el mismo tratamiento y beneficio fiscal que tienen las hipotecas siempre que el fiduciario tenga licencia expedida por la Superintendencia de Bancos de la República de Panamá.
A pesar de que el producto tiene mucha aceptación entre los consumidores, se le debe dar mayor divulgación a la explicación de la figura jurídica y su uso en los financiamientos para compra de propiedades.
PAPA, Rodolfo G., Fideicomiso para abogados y contadores, 2014, página 300, cita a CAMPI, Germán, El fideicomiso de garantía. La superposición de los roles fiduciario-beneficiario”. Publicado en el Suplemento de Finanzas para Abogados de la Universidad del Cema (Ucema), incluido en el diario La Ley, de fecha 18/12/2009.
[frame type=”lifted” align=”left”]http://www.morimor.com/wp-content/uploads/2013/07/Chiriqui_1.jpg[/frame]As part of our CSR strategy, on Saturday July 13th, 2013, a team of lawyers and volunteers from Morgan & Morgan participated in a Legal Orientation Day held in collaboration with Fundación Telefónica Panama, at the Elisa Chiari School in David, Chiriqui. More than 12 people received free legal assistance and participated in a workshop covering topics related to domestic violence and healthy relationships, emphasizing the importance of equal opportunities for men and women.
The aim of these Legal Open Houses is to promote access to justice and gender equality in the country’s most vulnerable populations.[frame type=”lifted” align=”right”]http://www.morimor.com/wp-content/uploads/2013/07/Chiriqui_2.jpg[/frame]
Attorneys Ana Frago, Lidieth Morales, Ileen Lezcano and Giselle Moncada, as well as volunteers Camila De Vengoechea and Yurisel Quintero made up the group that provided services for this initiative.
By participating in this conference, Morgan & Morgan reaffirms its commitment to the Pro Bono Declaration of the Americas being the first Panamanian firm signatory of this initiative.
[frame type=”lifted” align=”left”]http://www.morimor.com/wp-content/uploads/2013/07/Chiriqui_1.jpg[/frame]Como parte de nuestra estrategia de RSE, el pasado sábado 13 de julio de 2013, un equipo de abogadas y voluntarias de Morgan & Morgan participaron en una Jornada de Orientación Legal llevada a cabo, en colaboración con Fundación Telefónica Panamá, en la Escuela Elisa Chiari en David, Chiriquí. Más de 12 personas recibieron asistencia legal gratuita y participaron de un taller en donde se tratan temas relacionados a la violencia doméstica y promoción de relaciones sanas, haciendo énfasis en la importancia de la igualdad de oportunidades entre hombres y mujeres.
El objetivo de estas jornadas es promover el acceso a la justicia y la equidad de género en las poblaciones más vulnerables del país.[frame type=”lifted” align=”right”]http://www.morimor.com/wp-content/uploads/2013/07/Chiriqui_2.jpg[/frame]
El grupo que prestó sus servicios para esta iniciativa estuvo conformado por las abogadas Ana Frago, Lidieth Morales, Ileen Lezcano y Giselle Moncada; y las voluntarias Camila De Vengoechea y Yurisel Quintero.
Con su participación en estas jornadas, Morgan & Morgan reafirma su compromiso con la Declaración Pro Bono de las Américas al ser la primera firma panameña signataria de esta iniciativa.