How to Hire a Panama Builder

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Developing Panama Real Estate by Hiring a Panama Home Builder

In Canada and the U.S. there are certain steps and procedures which must be accomplished in an exact order before completing a construction project on raw land.  Knowing this process will help you understand what is necessary for a Panama builder to complete your real estate construction project.

Here are the required steps to build a home in the U.S.:

1.  Surveyors will stake out the site’s boundaries.

2.  Heavy equipment will be used to clean the site.

3.  A cement crew along with plumbers and electricians will build forms, lay conduits & pipes, pour footings, lay the foundation and slab.

4.  Carpenters will build the house frame followed by plumbers and electricians installing the wiring and water pipes.

5.  Roofers will build the roof.

6.  The windows, doors, and inner walls will be erected and installed.

7.  Cabinets will be installed.

8.  Finish carpentry will be completed.

9.  Painters and tile workers will paint the walls and ceilings and install tile floors and showers.

10.  Carpets will be installed.

11.  Occupancy Permit will be obtained.

12.  The owners can move in.

Knowing these steps allows you to contact Panama builders to interview them and ask what the steps they will take to build your Panama home. 

References are very important especially in a foreign country.  Ask around in the Panama expat community and Panama expat internet forums for their experiences with building their Panama homes.  It is better to get feedback from foreigners than locals because expats can be treated differently and have higher standards and require different home features and amenities than locals. 

What experience with building homes for expats is something you can ask Panama builders when you interview them.  The more experience working for foreigners will garner more expat references which you need to contact to hear about their experiences with each Panama builder.

Important things to know regarding building a home in Panama:

Cement Blocks: Most Panama homes are built using cement blocks to resist earthquakes rather than hurricanes or floods.  Traditional foundations and wood frames found in North American homes are rare in Panama.    

While labor is cheap, supplies are not.  Panama laborers are paid a minimum wage of around $2.14 an hour.  While the raw essential building materials (sand, rocks, trees, materials for cement) exist in Panama they are not being extracted.  Many building materials are imported which makes them more expensive than in countries with steel mills, lumber mills, rock quarries, sand processing, etc. 

Buy all of the necessary supplies upfront.  Make sure your builder purchases all of the supplies needed for the project early to avoid price increases or unavailability.  The same goes for equipment which may be rented out due to the large amount of construction projects occurring throughout Panama. 

Safety is a problem on Panama construction projects.  The U.S. Occupational Safety & Health Administration (OSHA) issues rules and regulations for the worker’s safety.  Every year a number of Panama City construction workers die on the job due to safety violations.

Estimates are not exact:  If supplies and materials for the project are not purchased upfront expect prices to rise by the time they are bought.  The estimated time to complete a project in Panama can change due to weather (heavy rain, strong winds) and availability of equipment. 

Lack of tools of the trade:  In the U.S., Canada, and in Europe the construction workers own their tools and arrive to work with the necessary hand tools of their trade.  Not so in Panama.  Expect that the cost of buying hand tools to be added to the construction costs.

Staying on Budget:  You need to be on top of the supplies, equipment and tool purchases and rental prices to make sure you are getting your money’s worth.

Foreign builders are hard to come by because Panama’s builders are a close knit community which makes it hard for expat builders to make an impact in this industry.

Panama Labor Laws:  Panama is very strict when it comes to paying social security taxes, vacation pay, sick leave, and other employee benefits.  The Ministry of Labor send out inspectors to construction sites to verify that all laborers are signed up with social security giving them social security medical/ health insurance coverage in case of an accident.  Some contractors pay their laborers with cash avoiding the required social security payments.  If they get caught they will be fined.  Otherwise, a construction worker can file a claim with the Ministry of Labor for not having their social security payments and other benefits.  If the contractor doesn’t pay, then they go after the property owner.  To protect yourself when hiring a Panama builder make sure the contract specifies it is the builder/contractor’s responsibility that all social security payments and benefits are provided for every worker and you are indemnified from that responsibility.    

Knowing all of this makes it imperative to ask the right questions when interviewing a potential Panama builder.      

Contact Us for all of your Panama Real Estate needs including hiring Panama Builders and Panama Relocation.

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