{"id":17716,"date":"2026-10-08T20:00:00","date_gmt":"2026-10-09T01:00:00","guid":{"rendered":"https:\/\/expat-times.com\/panama\/?p=17716"},"modified":"2026-10-08T15:28:31","modified_gmt":"2026-10-08T20:28:31","slug":"a-outdated-1970s-law-for-todays-panama-rentals","status":"publish","type":"post","link":"https:\/\/expat-times.com\/panama\/panama-real-estate\/a-outdated-1970s-law-for-todays-panama-rentals\/","title":{"rendered":"A Outdated 1970s Law for Todays Panama Rentals"},"content":{"rendered":"\n

By Manuel Espinosa-Gillis<\/p>\n\n\n\n

There are laws that age without us even noticing. They remain in force, they continue to appear in contracts, and they are still relied upon by institutions, yet the country they were built to regulate no longer exists in the same way. That appears to be one of the central challenges Panama faces regarding its rental legislation.<\/p>\n\n\n\n

First, however, a necessary clarification is in order. When people speak of the so-called “1973 rental law,” they are actually referring to a regulatory framework whose core foundations stretch back even further. Law 93 was approved on October 4, 1973, establishing the General Directorate of Rentals under the then-Ministry of Housing, and was followed in 1978 by supplemental regulations governing rental rates and deposits.<\/p>\n\n\n\n

\"Panama
Panama City is no longer what it was in 1973, and Law 93 needs to adapt to the requirements of new generations. Panama City circa 1973.<\/figcaption><\/figure>\n\n\n\n

More than fifty years have passed since then. In that time, Panama has undergone a profound transformation: the architectural landscape <\/a>and construction methods have shifted, property values have evolved, the real estate sector has matured completely, and the entire process of renting a home looks entirely different.<\/p>\n\n\n\n

Today, a prospective tenant can search for an apartment from abroad, sign legal documents remotely, execute payments via international wire transfer, and manage all ongoing communication with their landlord through a messaging app. Yet, a significant portion of the legal architecture governing that modern relationship was born in an era when none of those technologies existed.<\/p>\n\n\n\n

\"Real
Real estate expert Luis Alberto Mon, from Expact-Tations.<\/figcaption><\/figure>\n\n\n\n

Between What the Law Says and What Happens in Practice<\/b><\/h2>\n\n\n\n

Real estate expert Luis Alberto Mon, from Expat-Tations, believes that one of the core problems lies precisely in the widening gap between antiquated legislation and the fast-paced reality of modern contracts. In his view, many agreements ultimately end up operating under unrestricted free-contracting schemes, leaving tenants at a severe disadvantage\u2014particularly when they are entirely unaware of their legal rights and the strict boundaries of what a landlord can or cannot legally demand.<\/p>\n\n\n\n

The issue, however, is not necessarily the mere existence of a private contract. The Ministry of Housing and Territorial Ordering (Miviot)<\/a> has repeatedly clarified that a private contract is not illegal in its own right. The critical requirement is that these agreements must undergo an administrative phase and be officially registered\u2014a process that Miviot continues to oversee actively in 2026. This oversight is precisely where one of the most intriguing structural contradictions arises.<\/p>\n\n\n\n

Decades ago, Law 93 already mandated that contracts be formalized in writing and that landlords submit a physical copy to the General Directorate of Rentals, alongside strict rules governing the security deposit. Consequently, some of the friction points currently framed as legislative failures do not happen because the law completely lacks protective mechanisms. Instead, the root of the problem often stems from the massive chasm between what the written rule dictates and what actually occurs on the ground in everyday practice.<\/p>\n\n\n\n

\"The
The Law 259 of 2021 amended Article 13 of Law 93, re-affirming that
the deposit must equal one month’s rent, while also establishing guidelines for its management and refund.<\/figcaption><\/figure>\n\n\n\n

The Deposit: A Debate That Is Still Ongoing<\/b><\/h2>\n\n\n\n

The security deposit serves as a prime example of this legal friction. Original legislation mandated that a tenant deposit a sum equivalent to one month’s rent. Subsequently, Law 259 of 2021 amended Article 13 of Law 93, re-affirming that\u2014barring specific exceptions determined by Miviot<\/a>\u2014the deposit must equal one month’s rent, while also establishing guidelines for its management and refund.<\/p>\n\n\n\n

However, modern market contractual practices frequently stretch far beyond this rigid framework, often requiring extra financial guarantees or additional sums when securing a property. This creates an even greater hurdle for international expats arriving in the country who are entirely unfamiliar with local Panamanian legislation. It is far from a minor issue: a newcomer may encounter a dense, multi-page contract drafted in complex legal jargon, signing it under the assumption that every clause is fully enforceable simply because it is on paper.<\/p>\n\n\n\n

Yet, Law 93 itself explicitly establishes strict limits on what can be legally stipulated in these agreements. Among other restrictions, it prohibits forcing a tenant to pay excessive rent in advance, demanding unauthorized extra sums beyond the official rate, or compelling individuals to waive rights legally granted to them. Furthermore, the statute dictates that any contractual clauses designed to diminish a tenant’s statutory rights are legally null and void.<\/p>\n\n\n\n

\"labor
This brings us to another critical issue: the modern lease contract has become far more complex than anything the original legislation ever envisioned.<\/figcaption><\/figure>\n\n\n\n

A Law That Could Not Imagine the Modern Contract<\/b><\/h2>\n\n\n\n

This brings us to another critical issue: the modern lease contract has become far more complex than anything the original legislation ever envisioned. Today’s agreements routinely incorporate clauses covering air conditioning maintenance, minor repairs, professional painting, appliances, monthly maintenance fees, pet policies, designated parking spaces, early termination penalties, and other nuances that define the daily reality of contemporary renting.<\/p>\n\n\n\n

Law 93 does attempt to establish a basic framework, noting that the landlord is obligated to carry out necessary repairs to maintain the property and its facilities, while the tenant remains responsible for damages resulting directly from their own fault or negligence. To illustrate this division, consider a straightforward example: if a tenant receives a home that was not freshly painted at move-in, it makes little sense to demand that they return it in pristine condition at the end of the term. The same principle applies when major equipment breaks down due to normal wear and tear rather than any misuse by the occupant.<\/p>\n\n\n\n

The core question, therefore, extends far beyond whether the law merely protects the tenant. Ultimately, the real issue is whether the legislation is adequately designed to govern the dynamic, high-stakes real estate market that exists in Panama today.<\/p>\n\n\n\n

\"Miviot
The Ministry of Housing and Territorial Ordering (Miviot)<\/a> has repeatedly clarified that a private contract is not illegal in its own right. By Miviot Panama.<\/figcaption><\/figure>\n\n\n\n

The Miviot Itself Acknowledges the Gap<\/b><\/h2>\n\n\n\n

And at this point, something particularly striking stands out: the Miviot itself acknowledges the problem. In its 2024\u20132029 Strategic Plan, the institution expressly notes that Law 93 of 1973 presents a significant gap when facing the reality of the current real estate market. The document argues that the regime created decades ago can generate friction for both tenants and landlords, and proposes an amendment aimed at striking a fair balance between both parties.<\/p>\n\n\n\n

Therefore, this is not merely an opinion held by lawyers, landlords, or frustrated tenants. The very institution responsible for administering this system recognizes that there is an ongoing, urgent debate about how to update it, making that discussion more necessary than ever before.<\/p>\n\n\n\n