What horizontal property is
It is the legal form that allows one building or complex to have many owners. Each owns their apartment, shop or house with its own title in the Public Registry, and a proportional share of what is common: lobby, lifts, pool, visitor parking, gardens and structure. That share is called the participation coefficient and is set in the co-ownership regulations according to the value of each unit.
All apartment buildings, most gated residential complexes and many shopping centres in Panama are under this regime. Buying a unit means accepting the PH regulations, which have the force of a contract.
Who runs a PH
| Body | What it does |
|---|---|
| Owners’ assembly | Highest authority. Approves budget, fees, works and changes to the regulations. Can meet in person or virtually. |
| Board of directors | At least three members: president, secretary and treasurer. Carries out the assembly’s decisions and supervises the administrator. |
| Administrator | Manages day-to-day: collections, payments, staff, maintenance. Must present a budget and financial report every year. |
| MIVIOT | State authority. Mediates disputes, verifies minutes and imposes fines of 500 to 5,000 balboas. |
Fees and the contingency fund
The common expense fee is paid monthly and covers security, cleaning, lifts, water for common areas, building insurance and administration. It is calculated by multiplying the annual budget by each unit’s coefficient. In addition, Law 284 requires a contingency fund of at least 1% of annual income, kept in a separate bank account and usable only with the approval of 51% of owners.
What happens to an owner in arrears
- Surcharge of up to 20% on overdue fees.
- Suspension of the use of common areas and of services such as vehicle access control.
- Posting of the arrears in the building.
- Court collection from two months of arrears, with possible seizure of the unit.
- The debt follows the unit: whoever buys an apartment in arrears inherits the debt, which is why a PH clearance certificate is requested before a sale.
What is new in Law 284
- Virtual assemblies and board meetings with full validity, and consequences for non-attendance.
- Mandatory contingency fund and a ban on mortgaging or seizing more than 20% of common funds.
- Biosecurity rules the assembly can adopt in health emergencies.
- MIVIOT with binding powers and peace judges competent for coexistence disputes.
- Mandatory administrator profile, with knowledge of accounting, labour law and the law itself.
Frequently asked questions
What is a PH in Panama?
A property under the horizontal property regime: each owner has their unit with its own title and a proportional share of the common areas, and pays a monthly fee to maintain them. It is governed by Law 284 of 2022.
How is a PH maintenance fee calculated?
By multiplying the annual common expense budget by each unit’s participation coefficient, which depends on its value in the co-ownership regulations. It is paid monthly.
What happens if I do not pay the PH fee?
A surcharge of up to 20%, suspension of the use of common areas and court collection from two months of arrears. The debt is tied to the unit and surfaces on sale.
Related articles
Sources
- Law 284 of February 14, 2022, on the horizontal property regime, Official Gazette 29476-C.
- Ministry of Housing and Land Management (MIVIOT), Horizontal Property Directorate.
Ask about this article
Type your question and we will show you the answer inside this article or in other Radar Panamá publications.
