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By: Staff atPanama Landlord and Tenant Laws
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In most aspects of living in Panama foreigners are accorded the same rights as nationals. Renting houses, apartments or commercial properties is no exception and foreigners are protected by a law passed nearly 100 years ago.
The civil Code of 1917 deals with lease agreements which protect foreigners and Panamanians equally. The Civil Code deals with residential leases of $150 per month or more along with commercial and business uses, industrial leases, and educational purposes.
Only one other law dealing with rentals was ever passed, and that was Law 93 of 1973. It is hardly relevant now since it specifies properties whose monthly rents are less than $150.
Under the1917 Civil Code, tenants have the right to enter written lease agreements specifying a set monthly rent amount. Most landlords require a damage deposit, and the last month’s rent security deposit and may ask for a reference letter from a Panamanian or a phone number to be contacted for a reference. The preferred method of paying rent is with cash or a local bank cheque.
The Ministry of Housing offers a service for security deposits. They will accept the security deposit and will refund the full amount to the tenant at the end of the lease unless the landlord claims past due rent or property damages caused by the tenant. Most foreigners are unaware of this procedure and pay the security deposit directly to the landlord making it potentially more difficult to receive a refund.
Written lease agreements have a termination date. However, tenants can break the lease by giving the landlord at least 30 days written notice before the next payment.
Leases are written in triplicate with a copy for the tenant, landlord, and the Ministry of Housing. Since most foreigners are unaware of this law many landlords ignore it and provide a copy only for the tenant.
Most utilities can be paid by the tenant except for the homeowner’s association fees, water, and in many cases natural gas which are the landlord’s responsibility. The cable TV, internet, phone, and electricity can be put in the renter’s name. Commercial leases differ because the renter pays for the building maintenance, water, and utilities.
Repairs of electrical wiring, structural crack, and plumbing are usually paid by the landlord. Appliances, TV’s, and furniture provided by the landlord will be repaired for wear and tear but not for the tenant’s breakage.
Last September Panama’s Tourism Authority proclaimed that home owners renting to tourists for less than 45 days are illegal subject to fines from $5,000 up to $50,000 .
Consult with a Panama real estate law firm before signing a written lease agreement.