Regulations to the Horizontal Property Law

In the midst of a state of emergency and ten (10) years after the approval of Law No. 31 of June 18, 2010, which establishes the Horizontal Property Regime in Panama, its regulations were approved by Executive Decree No. 151 of June 16, 2020.

This Decree formalizes what in practice already existed, but it also establishes clear criteria on relevant aspects that we highlight below:

  • Special concepts are introduced such as: Components, Original and Derived Horizontal Property;
  • It clearly defines the rights derived from the incorporation to the Horizontal Property Regime;
  • Eleven (11) concepts that may belong to the Horizontal Property Regime are expanded and conceptualized in detail;
  • It establishes that in order to incorporate the new improvements and lift the marginal imposed upon incorporation to the Horizontal Property Regime, the obtainment of the certification of payment of the respective fee issued by the Directorate of Horizontal Property of the Ministry of Housing and Land Management (MIVIOT) will suffice.
  •  It allows private street urbanizations governed by non-profit associations to join the Horizontal Property Regime;
  • It expands and clearly describes everything concerning the share of common expenses;
  • It details with precision the reservations that can be made by the Developers and the possibility of providing services, as long as they have the corresponding permits;
  • It introduces the possibility for the owners or proxies to participate in the meetings through any electronic or technological means;
  • The Decree establishes with greater precision the percentages of participation and votes required for decision-making at the owners’ meeting;
  • The property regulations must contemplate a procedure to be used by the Board of Directors for the application of fines and the same must be decided by means of a motivated resolution, which will be notified through the Administrator;
  • The figure of the Administration Committee is introduced in real estate complexes or multi-purpose horizontal properties;
  • Regarding the administration, it is stated that the appointment of the Administrator may not be made by a member of the Board of Directors;
  • The outgoing administration is obliged to deliver to the incoming administration all documents pertaining to the administration.
  • The figure of the Deputy Administrator is created, and this person shall have the same duties, powers, responsibilities and obligations as the Administrator;
  • The Decree includes the requirements for the incorporation and modification to the Horizontal Property Regime;
  • Through the Horizontal Property Department, the procedure for requesting a management report to the Administrator and the Board of Directors is established, as well as the conciliation procedure for the settling of conflicts between owners.

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