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After some investigation we have discovered that it is unusual that so many titles should be released by MIVI (the watchdog for development) with so little infrastruture in place. In December of 2008 we decided that we needed to have a meeting with John and Rose to impress upon them the importance of finishing this development and finishing it in a timely fashion. It was our feeling that 2 and 1/2 years had been sufficient time to complete what they had started, even for amatures. In a formal letter we asked for a meeting with them at the end of January. The expectation was that they would have a timeline for completion of the work, including power, ditches, sidewalks and the park. We also requested to see a plan for the park complete with final elevations drawn up by professionals such as engineers and landscape architects.
The day of the meeting dawned and 2 days before Alfonso announced that he was unable to meet that day as it was his Sabbath (even though he had 2 months notice of the date). We rescheduled it out of respect for him to Feb 4.
The minutes of the meeting are as follows:
Minutes of Meeting with Representatives of Tropical Places
4 February 2009, David, Panama S.A.
This meeting was scheduled on 4 December 2008. The original date was set for 31 January but was moved to 4 February in respect for Alfonso Serrano’s Sabbath. A copy of the agenda is attached. The meeting commenced at 10:00 with Mr. John Wade, Mr. Alfonso Serrano, Mrs. Rose Ryan, Mrs. Rosalie Lillo and Mr. Harry Lillo.
Harry provided his perception of the matters to be discussed at the meeting including the purpose and expected outcomes. John questioned the additional items on the agenda. Harry explained that the two additional items were a further breakdown of two points and did not constitute new issues. Harry made it clear that although he was aware that other lot owners in the development shared the same concerns as we do, we were not here to represent any others, just ourselves.
When asked, John Wade stated that the three of them represented Tropical Place. When asked if there were any other partners he stated there are other partners but that was “classified information and can not be disclosed. In this meeting we represent Tropical Place”; no further discussion on the matter.
John Wade, Rose Ryan and Alfonso Serrano proceeded to admonish the Lillo’s for their conduct with respect to Tropical Places and were told they were ‘trouble makers’; in particular Rosalie with her emails in October and November to other lot owners. They were obviously upset that the Lillo’s had provided factual information on the state of the development to other lot owners. The Lillo’s were told that it would not be possible to maintain the personal friendships which the Lillo’s had expected to retain outside of these business dealings with Tropical Place. The Lillo’s in keeping with their commitment to maintain a professional approach to this meeting chose not to respond.
Receipts for payment on the Lots:
The first item of discussion was the issue of receipts for the purchase of the property. In 2008 Rosalie requested official receipts for the purchase of the Tropical Places property from Alfonso Serrano. Alfonso stated that he would provide them but needed to get official receipt documents which would take three days. These receipts were the subject of many emails through December and January. At one point Alfonso requested the exact amounts paid which suggested that receipts were forthcoming. However at this meeting Alfonso stated that it was impossible to issue such receipts for our purchase; the title was the only document that would be issued. Rose Ryan and John Wade also stated that they would not issue a receipt. Rose Ryan further stated that in Canadian real estate dealing, receipts are never issued; bank statements must be used to demonstrate the exchange of funds. In a question from Rosalie, Rose did admit that the lawyers in Canadian real estate dealings did provide a reconciliation of disbursements. Rose Ryan undertook to provide the Lillo’s with a photocopy of the bank draft that they used to pay for the lots. Harry stated that this information had been requested by our accountant and if necessary we would have Revenue Canada contact John Wade and Rose Ryan directly to confirm the amounts paid to them for these properties in Panama.
Rosalie noted the discrepancy between the amount paid for the property and the purchase amount shown on the titles. Alfonso attempted to explain Panamanian law as it relates to property assessment and taxation. He pointed out, as our lawyer; he believed it was in our best interest to have a minimal amount shown on our title in order to reduce our property taxes. (The amounts are approximately 1/10 of the purchase price). We had the right to request a reassessment following the completion of the house. The Lillo’s expressed a concern about capital gains they would need to pay in the event they decide to sell the property as the value on title was only a fraction of the price paid. Alfonso stated that he had done what was best for us.
UNDERTAKING:
Rose Ryan to provide the Lillo’s with a photocopy of their bank drafts for the three lots.
Ditches:
Approximately 30% of the concrete linings in the ditches were completed as of 4 February 2009; work had been suspended in early 2008. A contract has been let and concrete ditch construction is expected to be complete in 35 days (approximately March 15). The crew is about to begin construction. When asked how the tops of the ditches would be finished John stated that they would be finished to the edge of the road surface. Rosalie provided a picture of concrete ditches in a nearby Panamanian development which had a square curb edge on them and asked if this is how the edges would be finished at Tropical Places? John responded that that was not a Panamanian standard and would not be done at Tropical Places. There was then a question as to whether this development was to be completed to Panamanian standards or North American standards? At this point Juan Aguilera joined our meeting as legal representation for the Lillo’s. He had been delayed and was forced to join the meeting late.
North American or Panamanian construction standards for Tropical Places:
A discussion ensued as to whether there was an expectation that this development would be constructed to Panamanian or North American standards? John, Rose and Alfonso all stated emphatically that this development had always been reported to be to Panamanians standards and never expected to be to be to North American standards! The Lillos were told that if they had wanted to build in a development done to NA standards they should have bought in Valle Escondido or Los Molinos. John stated that Rosalie had only planted this idea that the development would be to North American standards in other lot owner’s minds and that this was never the stated intent of the developer. Rose Ryan stated that the roads were the only facility updated to North American standards. However upon further questions from Harry, Rose admitted that the road construction standards were the same as those set forth by the Panamanian regulators. The Lillo’s were told that for their $18,500 investment they should not expect anything more than a basic Panamanian development. The Lillo’s expressed that this was upsetting to them and believed it would be upsetting to other lot owners as well who they believed had higher expectations.
Roads:
The road construction is complete. When asked if the final topping of small crushed stone and a third coat of hot tar was going to be applied as seen in other Panamanian developments, John stated the roads were completed.
Sidewalks:
The Lillo’s asked when the developer was going to start construction of the sidewalks? John stated that was the responsibility of each lot owner. Alfonso went on to point out that he had to build the sidewalk in front of his own house in his upscale neighborhood. Harry indicated that it might be some time before everyone built their homes and therefore the network of sidewalks throughout the development would not be completed for quite some time. The Lillo’s then proceeded to show a copy of the Tropical Places development plan submitted to the Municipality. This plans clearly shows the design criteria for the sidewalks in the development; thereby the expectation that the developer would install the sidewalks. John accused the Lillo’s of obtaining the copy of the development plan from the engineer in charge and illegally obtaining ‘classified information’. Rosalie stated that this was a public document granted to her by the Municipality. John stated that he did not know if the sidewalks were the responsibility of the developer and would “take it under advisement”.
UNDERTAKING: At the end of the meeting John agreed to review the sidewalk requirements with the Municipality and advise the Lillo’s of the outcome of that meeting.
Water:
The domestic water system is now in place and working.
Electrical Power:
The power was promised in February 2008 and connected in January 2009. The developers could not explain the delay but blamed it on the power provider.
When asked if the Lillo’s could experience any issues with permanent electrical connection (perhaps because of an inadequate number of fire hydrants) they were told that all approvals were in place. Upon further discussion it was found that there had been some questioning about the number of hydrants by the bomberos. Rosalie asked to see a copy of the approvals to confirm that there would be no future problems. John and Alfonso stated that they did not have a document to confirm this. John and Alfonso agreed to check with the Fire Department to confirm that the current number of hydrants were satisfactory. John stated that if more hydrants were necessary Tropical Places would install them.
UNDERTAKING:
John Wade and Alfonso are to confirm with the fire department that the number of fire hydrants are adequate to have permanent power connected and there are no further impediments to permanent power connection. If necessary Tropical Places will install additional fire hydrants.
Park:
The rancho has been completed and Rose Ryan stated that there would be no further improvements on it such as tile or paint. She had planted four climbing vines at each corner of the rancho but obviously someone had stolen them. The Lillo’s pointed out the waste concrete from the rancho construction still remained around the base of each pillar and questioned where her topsoil and plants had been placed. She stated that she had placed them there along with 60 some odd other plants in the common area. The Lillo’s pointed out that it was difficult to see the evidence of these plantings on the common area.
The Lillo’s were pleased to hear that CESTA had been retained to prepare a professional plan for the common area including the pool and attendant infrastructure. This is to be completed in March 2009. Once completed it will be available for review at Tropical Places office (in the office of Alfonso Serrano). John stated that it is Tropical Places’ intent to implement the common area development and complete the common area and the pool as soon as possible.
The Lillo’s applauded Tropical Places commitment to complete this development in a timely manner.
UNDERTAKING: Tropical Places will advise lot owners of the availability of the common area plan and avail the plan to them.
Financial Assurance:
When asked, John indicated that sufficient funds exist to complete the development. Under “no circumstance” would Tropical Places be prepared to place funds in a trust account to facilitate the development of the common area and pool at a later date.
Release of Titles:
Alfonso indicated that all of the segregations of the lots are completed. The Lillo’s questioned if it was common for all segregations to be released with so little infrastructure in place in a development. Juan indicated that it was unusual that this would occur before work on the development was completed; however there are anomalies and circumstances where this could possibly occur in Panama.
Outstanding Debts:
Harry indicated that he was aware of at least one outstanding debt against the development. He asked if this type of debt could flow through to the lot owners. AS stated that the owners had their titles and the debt could not be attached to them. Juan pointed out that a debtor could attach liens to property owned by Tropical Places including the common area and unsold lots. We were assured that negotiations were underway to settle the outstanding debt and it would be taken care of in the week following this meeting.
Outstanding Regulatory Commitments:
Tropical Places has no outstanding regulatory commitments remaining. John stated that they have met all commitments.
Conclusion:
Harry thanked everyone for attending the meeting and stated that he would provide minutes from the meeting and a list of undertakings as agreed to at the conclusion of the meeting. The meeting concluded at 11:50.
4 February 2009, David, Panama S.A.
This meeting was scheduled on 4 December 2008. The original date was set for 31 January but was moved to 4 February in respect for Alfonso Serrano’s Sabbath. A copy of the agenda is attached. The meeting commenced at 10:00 with Mr. John Wade, Mr. Alfonso Serrano, Mrs. Rose Ryan, Mrs. Rosalie Lillo and Mr. Harry Lillo.
Harry provided his perception of the matters to be discussed at the meeting including the purpose and expected outcomes. John questioned the additional items on the agenda. Harry explained that the two additional items were a further breakdown of two points and did not constitute new issues. Harry made it clear that although he was aware that other lot owners in the development shared the same concerns as we do, we were not here to represent any others, just ourselves.
When asked, John Wade stated that the three of them represented Tropical Place. When asked if there were any other partners he stated there are other partners but that was “classified information and can not be disclosed. In this meeting we represent Tropical Place”; no further discussion on the matter.
John Wade, Rose Ryan and Alfonso Serrano proceeded to admonish the Lillo’s for their conduct with respect to Tropical Places and were told they were ‘trouble makers’; in particular Rosalie with her emails in October and November to other lot owners. They were obviously upset that the Lillo’s had provided factual information on the state of the development to other lot owners. The Lillo’s were told that it would not be possible to maintain the personal friendships which the Lillo’s had expected to retain outside of these business dealings with Tropical Place. The Lillo’s in keeping with their commitment to maintain a professional approach to this meeting chose not to respond.
Receipts for payment on the Lots:
The first item of discussion was the issue of receipts for the purchase of the property. In 2008 Rosalie requested official receipts for the purchase of the Tropical Places property from Alfonso Serrano. Alfonso stated that he would provide them but needed to get official receipt documents which would take three days. These receipts were the subject of many emails through December and January. At one point Alfonso requested the exact amounts paid which suggested that receipts were forthcoming. However at this meeting Alfonso stated that it was impossible to issue such receipts for our purchase; the title was the only document that would be issued. Rose Ryan and John Wade also stated that they would not issue a receipt. Rose Ryan further stated that in Canadian real estate dealing, receipts are never issued; bank statements must be used to demonstrate the exchange of funds. In a question from Rosalie, Rose did admit that the lawyers in Canadian real estate dealings did provide a reconciliation of disbursements. Rose Ryan undertook to provide the Lillo’s with a photocopy of the bank draft that they used to pay for the lots. Harry stated that this information had been requested by our accountant and if necessary we would have Revenue Canada contact John Wade and Rose Ryan directly to confirm the amounts paid to them for these properties in Panama.
Rosalie noted the discrepancy between the amount paid for the property and the purchase amount shown on the titles. Alfonso attempted to explain Panamanian law as it relates to property assessment and taxation. He pointed out, as our lawyer; he believed it was in our best interest to have a minimal amount shown on our title in order to reduce our property taxes. (The amounts are approximately 1/10 of the purchase price). We had the right to request a reassessment following the completion of the house. The Lillo’s expressed a concern about capital gains they would need to pay in the event they decide to sell the property as the value on title was only a fraction of the price paid. Alfonso stated that he had done what was best for us.
UNDERTAKING:
Rose Ryan to provide the Lillo’s with a photocopy of their bank drafts for the three lots.
Ditches:
Approximately 30% of the concrete linings in the ditches were completed as of 4 February 2009; work had been suspended in early 2008. A contract has been let and concrete ditch construction is expected to be complete in 35 days (approximately March 15). The crew is about to begin construction. When asked how the tops of the ditches would be finished John stated that they would be finished to the edge of the road surface. Rosalie provided a picture of concrete ditches in a nearby Panamanian development which had a square curb edge on them and asked if this is how the edges would be finished at Tropical Places? John responded that that was not a Panamanian standard and would not be done at Tropical Places. There was then a question as to whether this development was to be completed to Panamanian standards or North American standards? At this point Juan Aguilera joined our meeting as legal representation for the Lillo’s. He had been delayed and was forced to join the meeting late.
North American or Panamanian construction standards for Tropical Places:
A discussion ensued as to whether there was an expectation that this development would be constructed to Panamanian or North American standards? John, Rose and Alfonso all stated emphatically that this development had always been reported to be to Panamanians standards and never expected to be to be to North American standards! The Lillos were told that if they had wanted to build in a development done to NA standards they should have bought in Valle Escondido or Los Molinos. John stated that Rosalie had only planted this idea that the development would be to North American standards in other lot owner’s minds and that this was never the stated intent of the developer. Rose Ryan stated that the roads were the only facility updated to North American standards. However upon further questions from Harry, Rose admitted that the road construction standards were the same as those set forth by the Panamanian regulators. The Lillo’s were told that for their $18,500 investment they should not expect anything more than a basic Panamanian development. The Lillo’s expressed that this was upsetting to them and believed it would be upsetting to other lot owners as well who they believed had higher expectations.
Roads:
The road construction is complete. When asked if the final topping of small crushed stone and a third coat of hot tar was going to be applied as seen in other Panamanian developments, John stated the roads were completed.
Sidewalks:
The Lillo’s asked when the developer was going to start construction of the sidewalks? John stated that was the responsibility of each lot owner. Alfonso went on to point out that he had to build the sidewalk in front of his own house in his upscale neighborhood. Harry indicated that it might be some time before everyone built their homes and therefore the network of sidewalks throughout the development would not be completed for quite some time. The Lillo’s then proceeded to show a copy of the Tropical Places development plan submitted to the Municipality. This plans clearly shows the design criteria for the sidewalks in the development; thereby the expectation that the developer would install the sidewalks. John accused the Lillo’s of obtaining the copy of the development plan from the engineer in charge and illegally obtaining ‘classified information’. Rosalie stated that this was a public document granted to her by the Municipality. John stated that he did not know if the sidewalks were the responsibility of the developer and would “take it under advisement”.
UNDERTAKING: At the end of the meeting John agreed to review the sidewalk requirements with the Municipality and advise the Lillo’s of the outcome of that meeting.
Water:
The domestic water system is now in place and working.
Electrical Power:
The power was promised in February 2008 and connected in January 2009. The developers could not explain the delay but blamed it on the power provider.
When asked if the Lillo’s could experience any issues with permanent electrical connection (perhaps because of an inadequate number of fire hydrants) they were told that all approvals were in place. Upon further discussion it was found that there had been some questioning about the number of hydrants by the bomberos. Rosalie asked to see a copy of the approvals to confirm that there would be no future problems. John and Alfonso stated that they did not have a document to confirm this. John and Alfonso agreed to check with the Fire Department to confirm that the current number of hydrants were satisfactory. John stated that if more hydrants were necessary Tropical Places would install them.
UNDERTAKING:
John Wade and Alfonso are to confirm with the fire department that the number of fire hydrants are adequate to have permanent power connected and there are no further impediments to permanent power connection. If necessary Tropical Places will install additional fire hydrants.
Park:
The rancho has been completed and Rose Ryan stated that there would be no further improvements on it such as tile or paint. She had planted four climbing vines at each corner of the rancho but obviously someone had stolen them. The Lillo’s pointed out the waste concrete from the rancho construction still remained around the base of each pillar and questioned where her topsoil and plants had been placed. She stated that she had placed them there along with 60 some odd other plants in the common area. The Lillo’s pointed out that it was difficult to see the evidence of these plantings on the common area.
The Lillo’s were pleased to hear that CESTA had been retained to prepare a professional plan for the common area including the pool and attendant infrastructure. This is to be completed in March 2009. Once completed it will be available for review at Tropical Places office (in the office of Alfonso Serrano). John stated that it is Tropical Places’ intent to implement the common area development and complete the common area and the pool as soon as possible.
The Lillo’s applauded Tropical Places commitment to complete this development in a timely manner.
UNDERTAKING: Tropical Places will advise lot owners of the availability of the common area plan and avail the plan to them.
Financial Assurance:
When asked, John indicated that sufficient funds exist to complete the development. Under “no circumstance” would Tropical Places be prepared to place funds in a trust account to facilitate the development of the common area and pool at a later date.
Release of Titles:
Alfonso indicated that all of the segregations of the lots are completed. The Lillo’s questioned if it was common for all segregations to be released with so little infrastructure in place in a development. Juan indicated that it was unusual that this would occur before work on the development was completed; however there are anomalies and circumstances where this could possibly occur in Panama.
Outstanding Debts:
Harry indicated that he was aware of at least one outstanding debt against the development. He asked if this type of debt could flow through to the lot owners. AS stated that the owners had their titles and the debt could not be attached to them. Juan pointed out that a debtor could attach liens to property owned by Tropical Places including the common area and unsold lots. We were assured that negotiations were underway to settle the outstanding debt and it would be taken care of in the week following this meeting.
Outstanding Regulatory Commitments:
Tropical Places has no outstanding regulatory commitments remaining. John stated that they have met all commitments.
Conclusion:
Harry thanked everyone for attending the meeting and stated that he would provide minutes from the meeting and a list of undertakings as agreed to at the conclusion of the meeting. The meeting concluded at 11:50.
You will note that Rose Ryan now states that the intent never was to do this development to North American standards. That it was always the intent to do the work to Panamanian standards, even though they have often laughed at the way things are done here in Panama. John stated that it was his intent to complete construction of the Park incuding pool ASAP, Rose is still maintaining that it will be done when there are sufficient houses to justify a pool. We maintain that we paid for a park with a pool and we would like a park with a pool. We will see what transpires. It is our observation based on past experience that what John and Rose say and what they do are often two different things.
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