Law 284 of February 14, 2022; the new Horizontal Property Regime in Panama

Everything you need to know about the new Horizontal Property Law in Panama

HORIZONTAL PROPERTY REGIME

By: Jon J. Castillo G.

Since the entry into force of Law No. 284 of February 14, 2022, which subrogates Law No. 31 of June 31, 2010.

With the entry into force of Law No. 284 of February 14, 2022, which subrogates Law No. 31 of June 18, 2010, a new Horizontal Property Regime is constituted in Panama; with new principles and concepts in search of criteria adapted to this era. Among these is the creation of specific guidelines on relevant issues of common interest that we detail below:

• It is established that any transfer or sale of an appurtenant property must be executed in a Public Deed and registered in the Public Registry.
• It indicates that all mercantile operations that put in guarantee a property subject to the P.H. Regime, must be notified in writing to the P.H. administration.
• The common expenses of the real estate units must be paid monthly and these generate surcharges in case of delinquency, for which new actions are implemented that can be exercised against the owner who does not comply with the payment of the established common expenses.
• The Owners' Assembly may approve by 51% or more of the totality of the real estate units in the different decisions to be taken with respect to the common and private property.
• The Contingency Fund is created.
• Establishes responsibilities attributed to the Promoter in operations such as:
• • The delivery of the real estate units in the stipulated terms.
  • Complying with the terms of the promise or purchase and sale contract.
  • Development of the project as approved.
  • Pay the corresponding installments.
    
  • Responsibility for the reserved areas.
  • The validity of the Developer's company as established in Art. 1343 of the Civil Code.
• It attributes obligations to the Owners as follows:
  • Compulsory attendance to the meetings of the Owners' Assembly, since non-attendance will result in a fine.
  • To be responsible for damages caused to the common and private areas or other real estate units.
  • Important reports or announcements to the Administration.
• It is ruled that the Owners' Assembly shall meet at least once a year in ordinary session and in the absence of a date, it shall be held one year after the last one; emphasizing the adequate use of technological means to take the minutes of the Owners' Assembly.
• It details the procedure for the resignation of a member of the Board of Directors and that the vacancy will be filled by another director of the Board of Directors until he/she is appointed, considering that both the resignation and the minutes where his/her replacement is appointed must be registered in the P.R. within 30 calendar days.
• Adds new obligations to the Administrator such as:
• • • To inform the Board of Directors of non-compliance by the owners.
    • Require the approval of the Board of Directors or the Owners' Assembly, to agree and enter into contracts necessary for the ordinary and day-to-day work.o Management of petty cash assigned by the Board of Directors.
    • Notifications to mortgagors in arrears.
    • Perform breakdowns of monthly collections and their deposits.
    • Deliver all administration documentation to the Board of Directors, once the contractual relationship is terminated.:
      
  • Inform the Board of Directors of non-compliance by the owners.
    
  • To require the approval of the Board of Directors or the Owners' Assembly, to agree and enter into contracts necessary for the ordinary and daily work.
  • Management of petty cash assigned by the Board of Directors.
    
  • Notifications to mortgagors in arrears.
    
  • Performing monthly collection breakdowns and their deposits.
  • Deliver all administration documentation to the Board of Directors, once the contractual relationship ends.

Relevant Aspects:

• Changes in the participation percentages for the approval of decisions within the Owners' Assembly.
• New procedures for the establishment of common expense quotas and collection process.
• Obligations of the Developer to comply with the provisions of the pledge and/or purchase and sale contracts.
• Innovation in the use of electronic media and responsibilities of the Board of Directors.
• Limitations in the responsibilities of the Administrators and their supervision by the Board of Directors and Component Committees.

We hope this information is useful to you, and we remain at your disposal in case you have any additional questions or doubts about this new law.

For further information or assistance, do not hesitate to contact us by e-mail info@chlrabogados.com o joncastillo@chlrabogados.com // Telephone (507) 302 3975.