How To Rent Panama Real Estate - International Relocation Firm

How To Rent Panama Real Estate

Renting Panama Real Estate

Foreigners need to learn about their rights when renting real properties in Panama or investing in Panama real estate to rent out homes or apartments.

There are two old laws dealing with Panama real property lease agreements:

Panama Civil Code of 1917

Fourteen years after Panama became a nation the Spanish Civil Code was adopted which covers real estate leases in Panama.   The Panama Civil Code of 1917 oversees private residential real property where the monthly rent is $150 or more, business and & commercial usage, educational purposes, and industrial usage.

Law 93 of 1973

This law oversees the following types of properties where the monthly rent is less than $150:

• Residential leases in urban areas;

• renting rooms in a house or an apartment;

• Rentals of furnished apartments;

• Sub-leases;

• In addition, holiday (vacation) homes and apartments leased for more than six months for any monthly amount.

When this law was first enacted, $150 a month rent was a sizeable amount.   Tenants have more protection from rental increases and evictions than from the Panama Civil Code.

Law 93 does not include leases:

• located in the former Panama Canal Zone which reverted to Panama control;

• Rural properties;

• Government owned properties;

• Daily rentals (inns, hotels, motels, and lodging houses) and

• Holiday home rentals for less than six months.

Note: Foreigners will only be renting properties for more than $150 a month, therefore only the rights of tenants under the Civil Code will be emphasized here.

Tenant’s Rights

Here are the types of rights which tenants have:

Rental Amount

The parties to a lease agreement can agree on any monthly rental amount and increases.

Security Deposits

One month’s rent as a security deposit is supposed to be paid to the Ministry of Housing which is fully refundable to the tenant upon expiration of the lease.  Before the deposit is refunded the landlord can make a claim for rent past due or damaged property caused by the tenant.   However, foreigners usually do not know about this law and some Panamanians ignore the law by receiving the deposits for themselves.  This is a law which is not regularly enforced.

Length of the Lease

A lease can be agreed upon by the parties for any length in time.  Tenants can break a lease by providing 30 calendar days written notice prior to the next payment.


Certain services and utilities cannot be transferred to the tenant including monthly condo homeowner’s association fees and water where the landlord is responsible for paying.  The landlord normally inflates these costs into the monthly rent.  Phone, internet, cable TV, and electricity can be placed in the renter’s name to be paid by him or her.  Commercial property leases normally require the renter to pay water, building maintenance, and utilities.

Structural cracks & wear and tear, electrical wires, and plumbing are normally paid by the landlord.

Triple Lease Agreements

Rental agreements must be prepared in triplicate.  One copy is for the tenant, the second copy for the landlord, and the third copy for the Panama Ministry of Housing.

However, since foreigners do not have knowledge of this law and many
Panamanians ignore it, normally a copy is made for the landlord and another
copy is for the tenant.


The Panama Civil Code provides equal protection forforeigners’ leases as its citizens.  Foreigners are usually requested to provide first month’s security along with a damages deposit.  Sometimes, a landlord will request a personal reference letter from a Panamanian.  Cash or checks from local banks are the preferred methods for paying rent.


Many foreigners buy Panama real estate as investments and rent them out to other foreigners and sometimes to Panamanians.  This can be very profitable.


Panamanians and foreigners pay income taxes on profits derived from renting properties in Panama.  There are several tax deductions to help write off the taxes due.  A landlord can deduct repairs, maintenance fee, management fees, real estate commissions, utilities and other expenses.

Panama Real Estate Commissions

A Panama realtor’s commission normally is for one month’s rent.  Because there is no Multiple Listing Service (MLS) in Panama, many times there are two or more real estate agents splitting the commission.  The law requires payment of a 7% sales tax (VAT) called ITBMS in addition to the commission.

Panama Real Estate Agents Services

If the tenant requests, the real estate agent can assist with setting up phone, internet, cable TV, and electricity services in the renter’s name.

Contact Us to provide you with a quote for Panama real estate investment services before buying an apartment or a house as an investment.

Ask the Expert

Have a question? We're here to help. Give us a call or send us a message and get a free Panama legal consult.

Panama Legal Resources

Browse 100s of articles to & learn how to make moving, living, investing and doing business in Panama easy.

Free eBooks

Browse eBooks and guides on Panama immigration, relocation, business in Panama and more.

Panama Relocation Newsletter

Sign-up and receive the latest Panama news and articles on relocation, immigration, and real estate.