Panama Landlord-Tenant Laws: Complete Guide for Property Owners

The rental market in Panama is primarily regulated by Law 93 of October 4, 1973, which entered into force upon its publication on October 22, 1973. This foundational law is currently undergoing a modernization process by the Ministry of Housing and Territorial Planning (MIVIOT) to adapt to the 2026 real estate market.

Key Panama Rental Laws at a Glance

Security Deposits (Depósito de Garantía)

A security deposit equal to one month's rent is mandatory under Article 21 of Law 93. Crucially, the landlord must deposit these funds with MIVIOT (Ministry of Housing) and provide the receipt to the tenant. The government holds these funds until the end of the tenancy.

Rent Increases

Panama allows free negotiation for the initial term. Increases during the tenancy depend on contract terms. However, for housing with rent $150 USD or less, any increase requires express MIVIOT authorization based on property improvements, as per Law 93.

Eviction Procedures (Lanzamiento)

Evictions are managed by the Dirección General de Arrendamientos (General Directorate of Leases) under MIVIOT. Grounds include non-payment of two or more months' rent. The process can take several months, and Article 41 allows for suspensions if the tenant proves severe illness or total lack of resources.

Short-Term Rental Restrictions The Panama Tourism Authority

The Panama Tourism Authority (ATP) strictly enforces a 45-day minimum stay for residential properties in the District of Panama, as established in Article 21 of Law 80 of 2012. Rentals for shorter periods (Airbnbs) are prohibited in residential zones and can result in significant fines for the property owner.

Maintenance and Habitability

Landlords are obligated to maintain major systems (plumbing, structural, electrical). MIVIOT oversees habitability standards and can intervene if the unit becomes unsafe.