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Overview of Landlord - Tenant Laws in Panama

Overview of Landlord – Tenant Laws in Panama

This is an officially translated version of Panama’s Law 93, which deals specifically with the rights of tenants and landlords when it comes to leases.

Law 93 of October 4, 1973
– Journal of Laws: 17.456 of October 22, 1973 –
“By which measures leases are issued and it is created in the Housing Ministry’s General Directorate for Leases ”
As it was left after being modified and added by law N °. 28 of 12 May, 1974, N °. 55 of September 7, 1976, N °. 29 December 31, 1986, N °. 22 July 29, 1991 and regulated by several decrees that developed it.
THE NATIONAL COUNCIL OF LEGISLATION
CHAPTER I
ARTICLE 1. “It is law enforcement the leasing of private property intended for habitation, showrooms, professional use, industrial and educational activities.
Except as provided in Articles 4, 5, 6, 7, 8, 10, 13, 16, 20, 65, 66, and 68, the Executive Authority may exclude from the field of application of this law, through Decree and based on sections of Canons of leases or other characteristics, leases of real property shall be governed by free contract. ”
NOTE: Pursuing the development of this rule, the Executive issued The Executive Decree No. 37 of 15 September 1974 which excluded from the field of application, the contracts intended for habitation whose lease fee is greater than TWO HUNDRED FIFTY DOLLARS (B / .250.00) ; the contracts for commercial establishments, industrial and educational activities, whose rental rate is greater than FIVE HUNDRED DOLLARS (B / .500.00) and the contracts for furnished habitable rooms provided that the period of occupation was not more than three (3) months. (Official Gazette No. 17,554 of March 18, 1974.) Subsequently, the Executive Decree No. 7 of 10 January 1995 (GO No. 22.709 of January 24, 1995), established the exclusion (except as provided in the aforementioned provisions of the Law 93 of 1973), the field of application thereof, private real estate properties for commercial establishments, professional use, industrial, or educational activities, disregarding the amount of rental fees. On the other hand, the Executive Decree No. 294 of December 7, 1994, in the case of real estate properties for habitable rooms, lowered the rental rate of B /. 250.00 to B / .150.00.
According to Ministry of Housing interpretation of the wasteland (empty) are excluded from the field of application of the Law 93 of 1973 (Note ADMVAJ-361-76).
ARTICLE 2. This Act provides, also, the sublease and applies to the lease of furnished rooms and apartments.
ARTICLE 3. It excludes the application of this Act to those leased properties whose lease fee is established per day, such as hotels, motels, lodges and pension houses. The housing centers that are leased for summer season also excluded, provided that the term of lease its extensions, if this is the case, does not exceed six (6) months.
NOTE. Law 38 of November 8, 1984 (GO No. 20,186 of November 16, 1984) states in Article 1. that the provisions of the Law 93 of 1973 “shall not apply to Leases of buildings whose construction starts from the effective date of this Act which is intended for habitable room, commercial establishments, one (sic) professional or industrial activities or educational activities, regardless of the agreed lease fee, except for the provisions contained in Articles 4, 5, 6, 7, 8, 10, 13, 16, 19, 20, 65, 66, and 68 of the Act. ”
ARTICLE 4. No person shall be denied the lease of real property referred to in this Act by reason of race, marital status, sex, national origin, age, color, political or religious beliefs, or because the lessee has children.
ARTICLE 5. All lease must be formalized in writing on forms provided by the Directorate General of Leases and will express: date, names, numbers, personal identity and addresses of the parties; the real property or portion comprising the lease stating the number, street or square and township in which it is located; cadastral number of the estate, volume, and page number of your registration and all other particulars thereon; cash value representing the rental rate, even if the payment is agreed to be in services or in different species; the term of duration; and the purpose that is given to the leased property.
ARTICLE 6- THE LESSOR has the obligation to deliver to the General Directorate of the Ministry of Housing Leases, within five (5) business days, following its signature, a copy of the Lease Agreement to hold everything. The omission of the Lessor to submit a copy of the Agreement, or the refusal of the tenant to sign when occupying the property, shall be grounds for punishment in accordance with the provisions of this Act. The provisions of this Article shall also apply to sublease.
ARTICLE 7- It is not considered violation of the lease, the fact that in a rented house for habitation, the occupants are exercising the trade or profession which derive their income, provided that their exercise does not violate applicable law, sometimes additional costs to the landlord or disturb the peace and quiet of the neighbors.
ARTICLE 8- All houses intended for habitation must meet the conditions of hygiene, health and safety under the present Law.
ARTICLE 9- No lease or extension of it, may be for a term of less than three (3) years; the lessee is entitled to have the contract extended, for the same term, if at the expiration of the contract if it is at current on their payments. If the landlord refuses to receive the amount in lease, the lessee may deposit it in the General Directorate of the Ministry of Housing Lease. The corresponding certificate is issued to show that they have verified their payments and for all legal purposes means to have verified their payments and for all legal purposes shall be extended the contract.
ARTICLE 10 – (Modified by Articles 2 of Law 28 of 1974 and 9 of Law 55 of 19769)
The duration and extension of the lease of immovable property intended to be binding for habitable room for the lessor and the lessee waived at any time without further obligation than to give the landlord written notice prior not less than thirty (30 ) calendar days prior to vacating the rented premises.
When the tenant omits totally or partially the prior notice referred to in this Article, the Directorate General Lease without warning investigation and after hearing the lessor and the lessee shall issue a resolution ordering the delivery of the landlord of deposit proportional to the number of days left to warn or all of the deposit if the notice is completely omitted.
ARTICLE 11- (Modified by article 3, Law 28 of 1974). The lease payment is payable the following month. Notwithstanding the above, the lessee, of their own volition may pay in advance, thus receiving a discount of no less than 10 percent of the established fee. The act of making advanced payments of the lease payment fee does not signify an obligation to the lessee and the impact of default always takes into consideration the monthly arrears in accordance with the date of the contract.
NOTE: The Minister of Housing has sustained that “The discount is an element which must constitute a contractual stipulation or prior agreement between the parties, through which the lessee commits themselves to carry it out. It would be an erroneous interpretation that leads to believe that the lessee shall be obliged to pay in advance” (Note No. DDG-433-77).
ARTICLE 12- It is prohibited to demand any compensation from the lessee in any form whatsoever, outside the amount of the corresponding lease payment.
ARTICLE 13- In Lease Agreements that take place on or after the enactment of this Act, it is
the duty of every lessee, with the exceptions as established by the Ministry of Housing, to allocate to the lessor an amount equal to the lease payment by way of a deposit. This amount will be given to the Department of Leasing of the Ministry of Housing, whose care it will remain under until it is returned to the depositor at the end of the lease agreement, except in the case of claim against the lessee other than those due to normal wear and tear of the goods; these circumstances must be duly verified.
The Department of Leasing of the Ministry of Housing will regulate the manner and date on which the deposits referred to in this Article shall be verified.
NOTE. Based in the ability of this Article to establish exceptions regarding the duty of the lessees to allocate an amount equal to the lease payment by way of deposit, the Ministry of Housing enacted Resolution No. 20-77 on April 5, 1977 establishing said exceptions (Ver. G.O. No. 19, 147 on September 3, 1980).
ARTICLE 14- Unable to be stipulated in the lease agreements:
1. The duty of the lessee to pay the lease payment in advance;
2. The duty to pay any additional sum to the lease payment stipulated in the contract;
3. The waiver of any of the rights contained in the provisions of this Act.
ARTICLE 15- Those stipulations involving the waiving, dropping, tampering or relinquishing of any right recognized in favor of the lessee are null and void and, thus, not binding on the parties, even if expressed in a lease agreement or any other contract.
ARTICLE 16- As of the enactment of this Act the lessees of the rental building who join the Horizontal Property Scheme will have preference in the sales transactions that are verified on the property being leased. The option that hereby establishes in favor of the lessee shall have a maximum period of ninety (90) days. If the lessee fails to exercise the option and must leave the property, they will be entitled to enjoy the terms established in Articles 47 and 48 of this Law and the landlord will not be able to sell to a different person at a lower price than that requested of the lessee. The Executive Body shall regulate the manner, conditions and procedures for the exercise of this right.
NOTE: This provision was regulated by the Executive Order No. 42 of June 2, 1978 (G.O. No. 18,593 June 7, 1978). With respect to Article 16 please consult Cabinet Decree No. 217 of 1970 and Act 99 of 1973, amending Articles 29 and 30 therein.
ARTICLE 17- In all instances of sale or transfer by any other title of a property given in lease, the buyer or recipient is obliged to respect the existing leases held by the seller, provided they do not go against the provisions of this Act.
ARTICLE 18- Lessees shall not transfer the rights arising from the lease agreements signed in accordance with the formalities of this Act.
Notwithstanding the provisions set forth in the previous paragraph, the spouse, children or relatives up to the fourth degree of consanguinity who live with the lessee, in the event of his or her death, shall assume all rights and obligations, without needing to sign a new lease agreement. Similarly, when the lessee has just cause to vacate the property, relatives living with the lessee shall assume the rights and obligations of the contract.
CHAPTER II
REGARDING SUBLEASES
ARTICLE 19- Any sublease agreement must always have the express prior consent of the lessor. In lease agreements of commercial, professional, industrial and educational premises, the clause prohibiting sublease shall be considered invalid.
NOTE: In a 21 April 1981 ruling the Third Chamber of the Court found that without the consent of the lessor the sublease is null and void.
ARTICLE 20- The properties may be totally or partially sublet. The total sublease shall fall upon the entire property including areas devoted to services and it shall be held by one person only. The partial subletting may be of one or more rooms or premises and with different people.
ARTICLE 21- The authorization of the lessor to sublet shall not result in an increased lease payment. By reason that the lease payment is fixed, any sublease including an additional benefit to the lessor or a direct benefit to the sublessor is prohibited. The provisions of this Article shall not be applied with respect to commercial, professional, industrial and educational premises.
CHAPTER III
REGARDING THE TRANSFER OF COMMERCIAL, PROFESSIONAL,
INDUSTRIAL AND EDUCATIONAL PREMISES
ARTICLE 22- In the case of transfers that take place under any title, of businesses or commercial establishments, professional offices, or industrial and educational establishments, located on the property referred to in this Act, the acquirer of those shall assume the rights and obligations stipulated in the lease agreement. The lessee shall, in writing, notify the lessor, his representative, or manager, of their decision to transfer the establishment.
CHAPTER VI
LEASE AND SUBLEASE OF FURNISHED ROOMS AND APARTMENTS
ARTICLE 23- The lease of furnished rooms, apartments or houses intended for habitation are governed by the provisions of the Articles of this Chapter and the general provisions of this Act.
NOTE: With regard to this rule, art. 3 of Executive Order No. 37 of 1974 ordered to exclude from the scope of application of Act 93 of 1973, “Lease agreements of furnished rooms of private property intended for this activity on a permanent or casual basis, provided that the period of occupation does not exceed three months”. Subsequently, the Executive Order No. 7 of January 10, 1995, in art. 1, a) eliminated the final sentence, beginning with “provided that…”
ARTICLE 24- Lease agreements to which this Chapter applies shall have the lease payment determined separately corresponding to the housing and its furnishings.
ARTICLE 25- The portion of the lease payment relating to furnishings may not exceed the amount of the lease payment which legally corresponds to housing.
In the case of this limit being exceeded, the lessee, while continuing the current lease may request the revision of the lease payment agreed or novation of the agreement, leaving it ongoing only with respect to housing, as well as reimbursement of any amounts unduly paid to the lessor for such reason.
The Department of Leasing shall establish rates for the part of the Lease Payment that corresponds to furnishings.
NOTE: This rule has been regulated by Resolution No. 02-78 of the Ministry of Housing, May 15, 1978 (G.O. No. 18,592 June 6, 1978).
ARTICLE 26- If the furnishings delivered to the lessee are insufficient or inadequate, this, as long as the agreement continues may require that the lessor provide supplementary furnishings as well as the reimbursement of any amounts unduly paid to the lessor for such cause.
ARTICLE 27- The Ministry of Housing shall regulate the cases in which housing, as referred to in this Chapter, may be subleased.
NOTE: This provision was regulated by Resolution No. 2-78 May 23, 1978 issued by the Ministry of Housing (G.O. 18,588 May 31, 1978)
CHAPTER V
DUTIES AND RIGHTS OF THE LESSOR
ARTICLE 28- The lessor is obliged to:
1. Keep the property in leasehold in a hygienic and safe condition, as determined by the relevant public agencies;
2. Carry out necessary repairs in order to maintain the leased property and its facilities in a state to be used for the purpose for which it was intended;
3. To extend or assume the lease agreement in accordance with the provisions that this Act establishes;
4. Ensure the peaceful enjoyment of the leased property for the duration of the contract;
5. Provide the lessee with a supply of drinking water;
6. Maintain the lighting and cleaning of common areas such as corridors, halls, staircases and vestibules; and
7. Provide the Department of Leasing of the Ministry of Housing with a signed copy of each binding lease agreement, and notification of its extension or subrogation.
NOTE: The Department of Leasing, through Resolution No. 102-75 October 2, 1975,
authorized that if the parties could voluntarily agree on the lease agreement of a commercial or industrial premises then the lessee would be obliged to pay for the water when this is used as an element or product of commercial speculation.
ARTICLE 29- Expenses incurred in compliance with the obligations expressed in the previous Article shall be borne by the owner.
ARTICLE 30- The lessor has the right to:
1. Perceive the value of the lease payment on the dates stipulated in the agreement;
2. Receive the value of the lease payment by direct deductions from the wages of the lessee in the manner and instances foreseen in the Act;
3. Request launch or notify lessee of eviction in cases foreseen by this Act and by its Regulations; 1
4. The payment of compensation for damages caused to the leased property from the lessee for those damages where the lessee is at fault;
5. The fee of the lease payment from the Housing Assistance Fund in appropriate cases. 1 Refer to Executive Order No. 87, September 28, 1993 (art. 34)
ARTICLE 31- On the grounds of urgent social concern, the Ministry of Housing may immediately occupy, in pro tempore, any leased property that is unoccupied. In such cases, the owners are forced to hand over use of the property in question to the Ministry of Housing.
Any act or omission of the owner or any person with the intention of avoiding compliance with the requirements of this Article, shall be penalized in accordance with the provisions of this Act.
CHAPTER VI OBLIGATIONS AND RIGHTS OF THE TENANTS
ARTICLE 32- The tenant is obliged to:
1- To timely pay the rental fee or deposit stipulated in the terms of Section 9 of this Act.
2- Use the leased property solely for the purposes set out in the lease contract, with the exception defined in Article 7 of this Act;
3- To take care and keep the leased property as it was received and be responsible to pay for any damage caused by negligence.
4- In the event of damage or destruction of the property, timely communication shall be given to the landlord;
5- Allow any urgent or necessary repairs of the leased property.
If, the city approved property work and the tenant must vacate the property to allow for the repairs, the effects of the contract and payment of rental fees are suspended throughout the duration of the project and will be able to return to the property once the repair is done. During this period, the landlord won’t be able to increase the rental fees;
6- Allow the landlord to perform periodic inspections of the property to verify its condition and determine if any repairs are needed;
7- Return the rental property in the same conditions that it was received, aside from any normal wear due to the ordinary use and the effect of time.
ARTICLE 33- The tenants are not allow to make improvements to the structure, or any division changes of the property leased without the consent of the landlord.
ARTICLE 34- The tenant has the right to:
1- Use the leased property, according to the contract and throughout the duration of the lease, except as provided in Article 7 of this Act;
2- Extend the period of the lease, using the Article 9 of this Act; and
3- Allow the landlord to make necessary repairs to the leased property.
CHAPTER VII THE RENTAL FEES
ARTICLE 35- The Department of Housing regulates the tenant’s fee and the landlord asses according to this Law.
NOTE: Regulation by Article No. 44 of June 2, 1978 (GO No. 18.593 of June 7, 1978)
ARTICLE 36- All existing lease or rental fees with or without contract before this new Law, shall be equal to the existing fees on December 31, 1972.
ARTICLE 37- The increase in lease in contravention of the provisions of this Act shall not bind the tenants. ARTICLE 38- (Amended by Art. 4 – Act 28 of 1974). The Department of Housing may authorize higher rent payment if maintenance and operation cost increase, or if the rate of return falls below a level considered fair and reasonable. The authorization could affect all leasing sectors according to their use, location, leasing sections and other features. The landlord could also, issue individual request to tenants that will allow him/her to improve the condition of the property to increase profitability.
For any increase on the rental payment not framed within the application of this law, an increment of up to 15% of the total value of the property, will be consider reasonable. However, when such an increment exceeds 10% of the current payment, this will be annually prorated until it reaches the total authorized increase. The housing authority will regulate all the terms and conditions on this regard.
The landlord might request a rental increase to the tenants while this contract is active.
NOTE: Regulated by Resolution No. 43 of June 2, 1978 (GO 18.593 of June 7, 1978).
ARTICLE 39- The housing authority regulates the legal protocol to fulfill the dispositions of the previous articles.
NOTE: Regulated by Resolution No. 5-78 of May 23, 1978, issued by the Housing Authority G.O.
CHAPTER VIII
THE EVICTIONS AND VACANCIES
ARTICLE 40- The landlord will exercise a vacancy only in cases established by the Law.
ARTICLE 41- An eviction process for overdue payment in a rental property used for housing will not proceed when the tenants are unable to pay the rent due to sickness, unemployment or lack of other sources of unearned income. Such conditions shall be verified by the respective Housing Commission.
ARTICLE 42- In the case of a commercial, professional or educational lease; the eviction and vacancy is under the Housing Authority, in accordance with the relevant laws and the provisions of this Article.
If automatic renewal occurs, the contract becomes indefinite. In these cases the grounds for vacancy will be established by the Civil Code and when the contract is for an indefinite period the following causes of eviction will apply:
1- When the owner uses the property for commercial, industrial, professional or educational purposes, will be subject of checks and the penalties provided under of Article 46.
2- When the property is sold to any public or private entity.
3- When the property needs repairs and when the vacancy is required from the Engineering City Department and,
4- When the landlord intends to demolish or rebuild the property, upon presentation of the appropriate permissions.
In case of eviction due to late payments, the closing of the trial can be reached by honoring the total debt. Is understood that overdue payments take effect after a month of the due date.
When the property is sold, the new owner must respect the lease contract until the expiration of the agreed period is expired and the copy of the contract is provided to the Housing Authority.
ARTICLE 43- The evictions and vacancy related to a house property is responsibility of the Housing Commissions within the effective date of this Law.
ARTICLE 44- Everything concerning evictions and vacancy will follow the procedure of this Law.
ARTICLE 45- (Amended by Art. 5 of Act 28 of 1974). Eviction and vacancy applications shall be determined under the following procedure:
The landlord must apply for an eviction or vacancy with a copy of the contract and a certificate of good standing of the property.
The landlord will be notified in person of the resolution that supports the application for eviction or vacancy within a period of forty-eight (48) hours. If not found, the notice shall be
delivered by the Housing Commission at his/her home. In the resolution will be set the appointment date to hear the parties and present evidences.
The Housing Commission shall, within fifteen (15) working days inquire and render the judgment and issue the corresponding resolution, which only can be appealed by The Department of Housing. The decision made by The Department of Housing will be final and mandatory.
ARTICLE 46- (Amended by Art. 6 of Act 28 of 1974). The application will be accepted only when the owner will use the property for personal use or a member of his family to the third degree of consanguinity; or when the property is subject to the Horizontal Property Regime under the terms of Article 16, or for demolition and subsequent construction of a new building, which should be duly verified by affidavit of the applicant or the presentation of the demolition permit, according the case. If the applicant or family do not occupy the property within three (3) months following the resolution that declared the eviction, the offender shall be punished by a fine of up to B/. 1,500.00, not excluding compensation for damages.
NOTE: Although the affidavit, is the means established by law as suitable to demonstrate the personal need of the property, it is also true that their actual and final estimate only is left to the discretion of the authority. The needs have different aspects and only the inquisitive actions and self-belief of the officer can determine the truth. (Note: 480, PG-74 18.12.74).
When the property on which rests the eviction was owned by a corporation, the family use provision cannot be cited since it is impossible to establish third degree of consanguinity between a corporation and an individual. (Res. From D.G.A. No. 178-77 of 08.11.77).
ARTICLE 47- In the cases referred in the preceding article, the tenant will have a term of one (1) month for each twelve (12) months of having paid the lease fee to vacate the property; in any case this period may not be less than one (1) month nor more than six (6) months. The period shall run from the date of notification in writing.
The Law forbids the landlord to lease, or a family member to occupy the property to a different person. This ban will be in effect for a period of two (2) years from the date of eviction by the original lessee.
ARTICLE 48- (Amended by Art. 7 of Act 28 of 1974). For the purposes of exercising the right set forth in the preceding article, the tenant may choose to stay in the leased property without the obligation to pay the rental fee for the entire time entitled by reason of antiquity;
or choose to leave the property and, in this case, the landlord shall pay an amount equal to the appropriate rent rate per month to be eligible for this.
If the tenant chooses to vacate the premises, the amount that must receive appropriate compensation shall be delivered by the landlord in the Housing Lease Department. This authority will in turn deliver it to tenant within a period not exceeding five (5) working days from the day of eviction.
ARTICLE 49- Evictions request for default are supported when the tenant fall behind for two (2) months or more, except for cases considered in Article 41 of this Law.
ARTICLE 50- When the formalities had been exhausted and the eviction take effect, the following shall apply:
1- The tenant is responsible for delivering furniture and fixtures in the place where it deems to be desirable;
2- If the house or room in dispute is occupied by a sick person, the assistance of a doctor will be needed so he can determine the terms of the transfer thereof, and the case will be put on hold and,
3- If the tenant does not designate the place to deliver the furniture, they shall be deposited in the place indicated by the Housing Authority.
The Housing Authority will regulate this matter.
NOTE. Regulated by Resolution No. 3-78 of May 23, 1978 issued by The Housing Authority (GO No. 18.588 of May 31, 1978).
ARTICLE 51- Under no circumstances, during the eviction process, the properties used for housing by the landlord and the people that lives with him can be confiscated.
CHAPTER IX
HOUSING ASSISTANCE FUND
ARTICLE 52- – (Amended by article 1 of Act 29 of 1986.). To establish a HOUSING ASSISTANCE FUND in order to meet social needs for housing in the following cases:
1- Payment of the amount of leasing fees in the cases referred to in Article 31 of this Law;
2- Temporary accommodation for those affected by disasters or catastrophes in the national territory such as earthquakes, fires, floods, windstorms and any other phenomena caused by forces of nature or beyond the control of man;
3- For repairing properties referred to in Article 31 of this law and for the construction of houses or warehouses to store the belongings of the families affected by the causes determined by this law or for properties that under special circumstances the Housing Ministry deems it necessary to intervene for humanitarian reasons or social interest.
ARTICLE 53 – – (Amended by article 2 of Act 29 of 1986). This Fund shall consist of:
1 – Fifteen percent (15%) of what the beer tax yields, as stipulated by Article 896 of the Tax Code, after any promised amounts are deducted to cover outstanding obligations. For this purpose, the Ministry of Finance and Treasury will send the corresponding amounts through the Government Accountability Office to the Ministry of Housing.
2 – The proceeds from fines imposed by the General Directorate of Leases of the Ministry of Housing in exercise of the powers granted by this Act;
3 – Budgetary allocations made by the State for this purpose; 4 – Any other income from public institutions, municipalities, or private sources.
5 – Money recovered through leases, allocations, fees, or payments from tenants of buildings occupied under Article 31, the affected families or from interior property owners.
6 – Repealed by art. 62 of Act 22 of 1991.
7 – Repealed by art. 62 of Act 22 of 1991.
ARTICLE 54 – – (Amended by art. 3 of Act 29 of 1986) The use of the Housing Assistance Fund will be regulated in the following manner:
1- In the event of a natural disaster or urgent need, the Ministry of Housing will order the disbursement of funds needed for the relocation or care of victims and the repair of affected buildings intended for habitation;
2- The Bureau of Social Affairs or the respective Regional Directorate of the Ministry of Housing, will create a report for each case, that will state the number of people affected and establish a priority for the use of funds;
3- The Housing Ministry will be able to use funds previously designated for the construction of temporary housing solutions in cases where it is required;
4. In the cases provided for in Article 31 of this Law, the Ministry of Housing, through a previous agreement between the owner or lessor will order the release of the funds required for the repair of property used for the purposes in the aforementioned article.
5. Similarly, the Ministry of Housing will order it conducive to providing maintenance to temporary housing solutions in cases where this type of use is necessary.
6. The Housing Ministry will be able to allocate part of the funds for the construction of new single-family or community houses, and any other similar solution that is deemed necessary.
The entirety of the funds cannot be used for only one of the previously mentioned purposes. The Ministry of Housing will regulate the use of said funds; and
7- In general, the funds will be used to solve and give immediate attention to those affected by unpredictable events, such as maintenance and investment in temporary housing solutions.
When in any given fiscal year the Housing Assistance Fund generates a surplus, by virtue of which has not been fully used to meet the needs expressly this provision refers to, favorable balances will be used in the next fiscal year, the construction of permanent housing solutions for those families receivables that are temporarily housed in pensions and other similar places, as a result of accidents and natural disasters that have occurred.
In the cases provided for in this Article, the Ministry of Housing will coordinate with municipal authorities, the respective Community Board, and other public and private entities that can contribute to solving them.
ARTICLE 55- (Amended by Art. 4 of Act 29 of 1986). The rleasing fees paid from this fund will comply with a housing contingency plan prepared by the Ministry of Housing in accordance with the provisions of section 31 of this Act.
NOTE. Regulated by Resolution N °. 03-78 of May 15th, 1978, issued by the Directorate General of Leases, G.O. 18,592 of June 6th, 1978.
CHAPTER X
ADMINISTRATIVE AGENCIES
ARTICLE 56- To set up inside the Ministry of Housing the General Directorate of Leases that will have the following functions:
1- Propose rules and regulations on rental fees and security deposits;
2- Develop programs, conduct studies and research and prepare reports related to housing and other lease properties;
3- Ensure compliance with established regulations related to leases;
4- Coordinate, direct, and supervise the work of the Committees on Housing;
5- Process and resolve complaints and disputes between tenants and landlords;
6- Ensure that security deposits are effectively consigned and handle them as established by this Act.
7- Provide landlords, upon payment of a fixed amount, the types of leases prepared by the Ministry of Housing;
8- Review, monitor, and keep careful records of all leases;
9- Order the modification of leases that do not comply with the law; 10- Authorize the increase in lease fees subject to the provisions of this Act;
11. Manage the Housing Assistance Fund; 12. Provide assistance and training to representatives of the Communal Board through waivers and seminars that help improve in carrying out their duties; and 13. The other functions as specified by law, regulations, and the Minister.
ARTICLE 57 – To set up under the authority of the General Directorate of the Ministry of Housing Leasing commissions Housing who have the following functions: 1- File arrangements between landlords and tenants to pay overdue lease fees; 2- Conduct research in order to verify where unemployed tenants or tenants otherwise unable to work are entitled to the HOUSING ASSISTANCE FUND in order to pay rental fees, and determine the moment when they lose said entitlement; 3- Address tenant’s complaints due to unsanitary or unsafe housing conditions where they live and transmit them to the respective authorities for the purposes of the Act; 4- Receive requests for authorizations to increase the rents and forward them to the General Directorate of Leases for processing;
5- Process and resolve in the first instance complaints and disputes between tenants and landlords; 6- Attend to all eviction notices and requests for release of living quarters; and 7- All other functions as specified by the Act, the Regulations, and the Minister.
ARTICLE 58- The Ministry of Housing may create housing commissions as it deems necessary to address issues related to its jurisdiction. ARTICLE 59- Housing Committees are composed of three (3) members appointed by the Ministry of Housing, thus: 1- Arepresentative of the Ministry of Housing, who shall preside over; 2- A representative of the Community Board and an alternate who will replace him in his temporary absence and chosen by the respective Community Board; 3- A Social Services professional chosen by the Ministry of Labour and Social Welfare. The representative of each Community Board shall act only in cases where the tenant is within the jurisdiction of the township.
ARTICLE 60- (Amended by Art. 8 of Act 28 of 1974). In places where there are no Housing Commission offices, interested parties may present their cases through the respective Community Board. Decisions by community boards, including those about on evictions or releases are appealable to the General Directorate of Leases of the Ministry of Housing.
ARTICLE 61- The members of the Housing Committees shall meet at least once a week to resolve matters brought before them for consideration. In order to meet, the attendance of all members is required and decisions will be made by the majority. The representative of the Community Board will earn a stipend of B / .10.00 for each meeting they attend.
ARTICLE 62- The Ministry of Housing will regulate the responsibilities of the Chairmen of the Housing Committies. NOTE. The Ministry of Housing, through Resolution No. 1-78 of May 23, 1978 regulated this provision (G.O. No. 18.588 of May 31st, 1978).
CHAPTER XI
FINAL PROVISIONS
ARTICLE 63- Following the enactment of this Act, all existing lease contracts, verbal or written, shall comply with its provisions. For the purposes of Articles 5 and 6 of this Act, landlords will have a period of ninety (90) days to do so.
ARTICLE 64- (Amended by Art. 10 of Act 55 of 1976). This Act shall not apply in cases where the State, the Municipalities, and the Autonomous Entities are involved; but when they are themselves landlords they may benefit from the rules on eviction of this Act.
ARTICLE 65- Any violation of the provisions of this Act, except those which have a different penalty, shall be punished by a fine of between B /.10.00 and B /.100.00 or by sentences of detention for thirty (30) to ninety (90 ) days, or both. The fines will be paid to the General Directorate of Leases of the Ministry of Housing and will be deposited in the HOUSING ASSISTANCE FUND. The General Director of Leases of the Ministry of Housing, will apply in each case the corresponding penalty, and these are only appealable to the Minister of Housing.
ARTICLE 66- For the purposes of fulfilling their duties, the Ministry of Housing will summon the persons whose appearance it considers necessary, with attention to the matter in question, by tickets that will express the date, time and office where they need to appear.
The tickets will be delivered in person to the summoned person and they will need to sign it. If the person summoned is unable, unwilling to sign, the bearer of the ticket will call a witness, whose testimony can prove the fact that the person in question was summoned. Anyone summoned in such a manner, except in justfied cases, must appear at the Offices of the Ministry of Housing; if said person did not appear they will be sancioned with fines of up to B / .20.00 or arrested for up to five (5) days for each time such disobedience is committed.
ARTICLE 67 – Following the enactment of this Act, current valid lease contracts, when there is a commitment by the tenant to pay for the consumption of water or other services, the leasing fees shall only consist of the amount that may have been assigned for the use of the property.
ARTICLE 68- Following the enactment of this Act, deposits the tenants have verified will be delivered to the Ministry of Housing under the conditions and within the designated time period. In cases where the amount exceeds of the equivalent of one month’s lease payment,
they will be returned by the Ministry of Housing to the tenant or be credited to the payment of the following months lease fees.
Landlords who do not meet the delivery requirements stated in the preceding paragraph within the time period given by the Ministry of Housing shall be punished by a fine equivalent to ten (10) times the value of the amount withheld.
ARTICLE 69 – All landlords who have increased the value of the lease fees since the thirty-first (31st) of December nineteen seventy two (1972) on the date of enactment of this Act are required to return to the tenants, or apply toward future payments, the amount charged for this reason. If the landlord chooses the former, they will have a period of three (3) months to do so.
In cases in which it the lease has finished, the landlord will deposit to the General Directorate of Leases of the Ministry of Housing, in the name of the former tenant, all amounts paid in relation to the increase in fees.
The lessor shall be liable to a fine of ten (10) times the value of the amount in question if they were to not comply with the aforementiond obligation under this Article.
The Ministry of Housing will indicate the terms and conditions in which the return of the money will be carried out as referred to above.
NOTE. Regulated by the Ministry of Housing through Resolution No. 4-78 of May 23rd, 1978, (G.O. 18.588 of May 31st, 1978).
ARTICLE 70 – From the effective date of this Act, the Cabinet Decree No.3 of October 14th,1968 is officially repealed as well as all provisions contrary to this Act.
ARTICLE 71 – This Act shall take effect upon its enactment.1
COMMUNICATED AND PUBLISHED In the city of Panama, on the 4th day of October of the year nineteen seventy three.
DEMETRIO B. LAKAS
Republic President
ELIAS CASTILLO G.
President of the National Assembly of Representatives of judges
1. It should be noted that Executive Decree No. 5 of February 25th, 1983, excluded from the scope of this Act (as was amended by Law No. 28 of the 1974 Act), all leases of private properties which have been built after the term hereof, which took place on March 9th, 1983.
G.O. 17554
LAW 28
(Of March 12, 1974)
By which modifies and adds articles to Law 93 of October 4, 1973
THE NATIONAL COUNCIL OF LAW. DECREES:
Article 1. Article 1 of Law 93 of October 4, 1973 will remain as it follows:
It is of public order leasing private property intended for habitation, commercial establishments, professional use, and industrial activities and educational.
Except as provided in Articles 4, 5, 6, 7, 8, 10, 13, 16, 19, 20, 65, 66 and 68, the Executive Authority may exclude from the scope of this Law by Decree and based on sections of leases and other features, the leases of real property that will be governed by free contract.
Article 2. Article 10 of Law 93 of October 4, 1973 is amended and shall remain as:
The term of duration and extension of the Rental agreement of immovable property intended to live in, will be obligatory for the lessor and the lessee waived at any time without further obligation than to give the landlord notice of not less than thirty (30) calendar days prior to vacating leased housing.
In the case of immovable property intended for commercial establishments, professional use, industrial and educational activities, the term of duration and extension are required for the landlord and tenant. However, if the parties agree so, the tenant may waive the agreed period and overtime, in the terms and conditions set forth in the Lease.
Article 3. Article 11 of Law 93 of October 4, 1973 is added with the following paragraph:
Despite the foregoing, the lessee, at his own initiative may pay in advance if doing so he obtains a discount of at least 10% of the established price. The fact that actually making payments of rental fees in advance does not mean an obligation for the tenant and the impact of default always will be considered the months of delay of payment according to the date of the contract.
NATIONAL ASSEMBLY, REPUBLIC OF PANAMA
G.O. 17554
Article 4. Article 38 of Law 93 of October 4, 1973, is added with the following paragraphs:
For the approval of fee increases not excluded from the scope of this Act leases, it is considered fair and reasonable profit up to the annual net 15% of the total cost of the property. However, if the authorized increase exceeding 10% of the fee will be prorated annually up to the total authorized amount. The Executive Branch shall regulate everything concerning this matter.
Requests for permission for increases in lease may be made by landlords during the contract period.
Article 5. The last paragraph of Article 45 of Law 93 of October 4, 1973, is amended as it follows:
The Housing Committee has a period of fifteen (15) working days to conduct the investigations, rendering its decision and issue the corresponding resolution, which supports only appeal before the General Directorate of the Ministry of Housing Lease. The decision of the General Lease Directorate shall be final and obligatory.
Article 6. Article 46 of Law 93 of October 4, 1973 is added and shall remain as:
Only will be admissible the application for eviction when the owner will be in need for the leased property for his personal use or for the use of a member of his own family up until the third degree of consanguinity, or when the property is subjected to the Horizontal Ownership Regime under the terms of Article 16, or for demolition and subsequent construction of a new building, which should be due verified by affidavit of the applicant or the presentation of the demolition permit, according to the case. If the applicant or family member does not occupy the property within three (3) months following the resolution that ordered the eviction, the offender shall be punished by a fine of up to B / 1500.00, not excluding compensation to which shall be convicted of any damage caused.
Article 7. To Article 48 of Law 93 of October 4, 1973, will be added the following paragraph:
If the tenant chooses to vacate the property , the sum to be received by corresponding compensation shall be recorded by the lessor in the General Directorate of the Ministry of Housing Lease. This Directorate, at the same time, will deliver to the lessee for a period not exceeding five (5) working days from the day of unemployment.
Article 8. Article 60 will be added to Law 93 of October 4, 1973 with the following paragraph:
The decisions to take community councils, including those which may apply to evictions or releases are appealable by the General Directorate of the Ministry of Housing Lease.
Article 9. This Act shall take effect upon enactment.
NATIONAL ASSEMBLY, REPUBLIC OF PANAMA
G.O. 17554
TO BE COMMUNICATED AND PUBLISHED
Signed in the city of Panama on the 12th day of March one thousand nine hundred seventy-four
DEMETRIO B. LAKAS
Republic President
ARTURO SUCRE P.
Republic Vice-president
CARLOS ESPINO
President of the National Assembly
of Municipal Representatives
ROGER DECEREGA
General Secretary
NATIONAL ASSEMBLY, REPUBLIC OF PANAMA

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