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Shores of Panama Oversimplified

Shores of Panama Condominium

Shores of Panama conveyed in 2007 at the same time as the Financial crisis of 2007-2008. The 307 unsold preconstruction condos went back to Silverton Bank which was promptly taken over by the FDIC in 2010. The FDIC began selling the units individually. The absorption rate was slow. Then they put the entire block of remaining condos up for auction in 2011. A bulk buyer purchased the inventory in 2012. I don’t believe the bulk inventory rented or sold as the bulk buyer expected. Owners get control of the board in 2014. The association wins a 12-million-dollar judgement in 2016 against several directors. Then releases the directors from the judgement in 2018 while purchasing the pool and club amenities from the bulk owner. The association chose to take out a loan to make the purchase. The bank put budget requirements on the association that shed some light on glaring financial issues. 2019 dues went up again as Shores of Panama begins to face their financial reality.

Still Oversimplified, But Longer

Shores of Panama conveyed under very difficult timing and circumstances. Phase one preconstruction prices were 250-360 dollars per square foot (fair market at the time). Phase two prices were well over 400 per square foot (which was just . . . silly, even at that time). The developer was having challenges selling out phase two. Phase one owners began taking occupancy in 2007. This is just as we were entering the 2007-2008 financial crisis. Phase two began conveying in 2009.

Occupancy didn’t go well. 2007 – 2012 was a disaster. The developers bank foreclosed on the remaining inventory. The bank failed and was taken over by the FDIC. Phase-one has 411 units and 73 of those didn’t sell until the bulk buyer purchase. Between the financial crisis and high preconstruction, only a small number of the condos in phase-two actually closed. 234 of 298 were left over for the bulk purchase.

Condo Association Boards

Board member positions are unpaid. Owners volunteer and then are elected by owners. Many board members mean well, but good intentions only get you so far. Many associations in Panama City Beach do not have a clear understanding of the association finances. They have no experience to qualify and evaluate the information being given to them. Shores of Panama is not a normal condo. Their situation is more complicated for all the reasons already mentioned. The challenges this board has and is currently working through are easily the most challenging in Panama City Beach.

Owners get control of the association board

2014 the owners recalled the association board members. They were busy working through the litigation with the bulk owner. I do not understand why they did not get a handle on the budget, reserve schedule, and reserve study the first year. To be fair, over 50% of the associations in Panama City Beach don’t have a good handle on their budget and reserves.

In 2016 they did win a 12 million Jury Award against several directors associated with the bulk owner at Shores of Panama.

The board releases the judgement and buys the pool and amenities

The Shores of Panama Condominium Owners Association came to an agreement with the bulk owner in Shores of Panama. They agreed to purchase the amenities for 16.2 million and released the Jury Award of 12 million in damages. They make this purchase of the amenities by taking out a loan.

Construction Litigation

Shores of Panama is in the middle of litigation with the builder’s insurance carrier. Some associations do a phenomenal job with this. Others fail miserably. It remains to be seen how the Shores of Panama Association does.

2018 Hurricane Michael

October 2018 Hurricane Michael hit. Many condos in Panama City Beach have done very well with these insurance claims. If done correctly the 1% deductible already paid in a special assessment would be well worth the claim and resulting repairs to the building. It remains to be seen how Shores of Panama does.

2019 Association Dues

In 2019 Association Dues went up again. You can get a detailed breakdown of the dues in my Shores of Panama Association Dues 2019 article.


It appears the association began to address the distressed state of the building reserves a couple years ago. The specifically referenced the reserves in the 2019 budget.  This could easily cause the next loan or special assessment. A construction defects settlement and/or Hurricane Michael claim could just as easily bring the reserve balance in line. This is currently an unknown.

It is important to understand there are several large reserve projects that should have already been started. The current reserve balance does not currently meet the needs of the projects needed at this time. Without a successful resolution to the construction defects lawsuit and/or Hurricane Michael claim, owners are likely see special assessments or new loans in the future. Several associations have had successful construction lawsuit settlements that exceeded fully funding reserves. Others have failed miserably. For Shores of Panama, time will tell.


Shores of Panama has 15 years of loan payments to pay for the club and pool purchase. The association needs to get a handle on the large maintenance projects that are due for the building. They also need to get a firm grasp on how much it cost to operating the building. People should also be aware of the remaining bulk owner inventory. I believe understanding these things will allow owners, buyers and sellers to make more informed decisions. For more information feel free to contact me.

Christopher Arnold

Many people also find my testimonials page informative.

Shores of Panama

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