Commercial Evictions in Premises & Buildings (Panama)

The State recognizes that corporate environments handle the spectrum of contracts from a balance of market symmetry. For commercial, professional, industrial, or educational premises, the competence for notice to quit (desahucio) and eviction (lanzamiento) actions belongs exclusively to the ordinary civil jurisdiction (Civil Courts) under Article 42 of Law 93 of 1973, regardless of administrative protections for residential tenants. The primary procedural framework for these actions is established by the Judicial Code of Panama. Thus, it drastically reduces the assistance or "social" considerations that usually apply to residential evictions. Here, renting companies must pay their warehouses or commercial premises on time.

Avenues of Action Against Commercial Defaults

Just as it operates against any individual in Panama, formal non-payment through accumulation is a fundamental primary reason for a resolutory judicial action (Lanzamiento por Mora). Under Article 1401 of the Judicial Code, the lawsuit is only admissible if the tenant owes two (2) or more months of rent. This proceeds before the Municipal Civil Judge (for cases up to $5,000.00) or the Circuit Civil Judge (for cases exceeding $5,000.00), depending on the agreed-upon amount (cuantía). Under Article 1404, the tenant may stop the eviction (enervar la acción) by paying the total amount owed, plus costs, at any time before the eviction order is executed.

Proven infractions or unpermitted uses of the business purpose are stipulated grounds for eviction under Article 1395 of the Judicial Code. These grounds include:

1. Expiration of the lease term.
2. Arrears in payment (subject to the 2-month threshold for Lanzamiento por Mora).
3. Use of the property for purposes other than those agreed.
4. Poor maintenance or damage to the property.

Acceleration of Processes (Foreseen Eviction Notices)

Corporations, in order to minimize onerous litigation in the event of their sub-brands breaching a lease, sign extremely high penalties into the documentary framework. In the face of an unpaid commercial breach, sometimes the fault itself triggers the expiration of external guarantors or clauses where the lessee assumes indemnifying the entire expected margin. Upon receiving bureaucratic warnings, formal intimations, or due notifications issued by Panamanian notaries regarding dictated terminations, these usually end in express consensual vacating in order to settle more aggressive demands that might involve the seizure of accounts or merchandise.

Unlike purely domestic evictions, commercial premises run broad risks of seeing the goods inside compromised under processes by jurisdictions if they do not cease the default or abandon the premises. The possessor can request legal protections and claim coercive collections on the inventory.

Back to Panama Commercial Leases OverviewPreview unavailable.