Panama's Rental Law: Article 45, Eviction, and Everything You Need to Know to Protect Yourself

If you searched for "Law 45 on rentals in Panama," it's worth clarifying one point before going further: Panama does not have a numbered law called "Law 45" specifically dedicated to rentals. The law that governs real estate lease agreements in the country is Law 93 of October 4, 1973, amended by Law 28 of 1974 and Executive Decree 7 of 1995, among other provisions.

What does exist, and what you were likely looking for, is Article 45 of Law 93, which regulates the eviction and removal procedure: the formal legal mechanism for ending a lease when one of the parties fails to meet its obligations. It's one of the most important articles in the law and the one that most directly affects both the tenant facing an eviction process and the landlord who needs to recover their property.

This guide explains what Law 93 says, what Article 45 specifically establishes, what rights you have as a tenant or landlord, and how the process works in practice in 2026.

Law 93 of 1973: the legal framework every tenant and landlord should know

Law 93 of 1973 is the fundamental law governing real estate leases in Panama. It is a law of public order, meaning its provisions override whatever the parties may freely agree to in a contract. A contractual clause that violates Law 93 can be annulled even if both parties signed it in agreement.

The law covers the lease of real estate intended for housing, commercial establishments, professional use, and industrial and educational activities. It is administered and enforced by the Ministry of Housing and Territorial Planning (MIVIOT), through the Directorate General of Rentals.

Law 93 establishes two distinct regimes depending on the rent amount:

Type A contracts (rent up to $150 a month): fully subject to Law 93, with the strongest protections for the tenant. Any rent increase requires express authorization from MIVIOT.

Type B contracts (rent above $150 a month): under free contracting per Executive Decree 7 of 1995. The parties freely negotiate the rent and its terms, but certain articles of Law 93 still apply mandatorily, including those related to the security deposit, contract registration, non-discrimination, and the eviction procedure.

In practice, virtually all residential leases in Panama City are Type B, since market rents far exceed $150 a month. However, many of Law 93's fundamental protections apply to both types.

Article 45 of Law 93: the eviction and removal procedure

Article 45 of Law 93 establishes the formal procedure by which a landlord can request a tenant's eviction or removal. In other words, it defines how the eviction process must be legally carried out in Panama.

The text of Article 45 establishes that eviction or removal requests are processed under this procedure:

Step 1: Filing the request. The landlord files a request for eviction or removal with MIVIOT's Directorate General of Rentals, along with a copy of the registered lease agreement and a certificate showing the property has no outstanding debts.

Step 2: Admission and notice. The resolution admitting the request must be personally served on the tenant. This notice is the formal start of the process and activates the legal deadlines.

Step 3: The tenant's response period. The tenant has a deadline to respond to the request, present their arguments, and submit any documentation supporting their position.

Step 4: Resolution. The Directorate General of Rentals or the competent authority issues a resolution. If the eviction is granted, a deadline is set for the tenant to vacate the property.

The most important thing Article 45 establishes for the tenant is that no eviction can occur without following this formal process. A landlord who changes locks, cuts off utilities, or applies any form of physical pressure or intimidation to force a tenant out without having obtained the proper order is acting illegally and can face penalties.

The valid grounds for eviction under Law 93

Not every disagreement between landlord and tenant justifies an eviction process. Law 93 establishes specific grounds that the landlord must prove for the process to go forward:

Failure to pay rent. This is the most common cause. It's generally triggered when the tenant accumulates two or more months of late payment. The landlord must present proof of the default to MIVIOT.

Use of the property different from what was agreed in the contract. If the contract establishes residential use and the tenant uses the property for commercial activities, or if it establishes commercial use and the tenant converts it into housing, that can be grounds for eviction.

Unauthorized subletting. Law 93 establishes that subletting requires the landlord's prior, express consent. If the tenant sublets without that consent, the landlord can initiate the process.

Serious damage to the property. Deliberate damage, or damage from gross negligence, that affects the structure or installations of the property beyond normal wear and tear.

Expiration of the lease term without renewal. When the contract has expired, the landlord doesn't want to renew under the proposed terms, and the tenant doesn't voluntarily vacate, the landlord can initiate the eviction process.

Landlord's need for the property. In certain cases regulated by law, the landlord can recover the property if they need it for direct personal or family use, following the established procedure and the required notice periods.

Suspension of eviction: when Article 41 protects the tenant

Article 41 of Law 93 is the humanitarian complement to Article 45. It establishes that the eviction process can be suspended if the tenant demonstrates to the competent authority one of these circumstances:

Serious illness. If the tenant or a family member living in the property suffers from a duly documented serious illness, the authority can suspend or postpone the eviction for as long as that condition lasts.

Total lack of resources. If the tenant demonstrates a situation of extreme economic vulnerability that prevents them from paying or finding alternative housing, the process can be paused or the move-out deadline extended.

These suspensions are not automatic: the tenant must request them formally and document them. They are a last-resort protection, not a mechanism for evading compliance with contractual obligations that could otherwise be honored.

The tenant rights that Law 93 protects as mandatory

Beyond the eviction process, Law 93 establishes a set of fundamental tenant rights that cannot be eliminated by any contractual clause:

Right to use the property for the full term of the contract. The tenant has the right to occupy the property for the entire time agreed in the contract, and the landlord cannot interrupt that occupancy except for the legally established grounds and by following the formal process.

Right to contract extension. Law 93 establishes that the contract term is binding on the landlord but waivable by the tenant. This means the landlord cannot end the contract before its expiration purely at their own will, while the tenant can leave with 30 days' prior notice.

Right to have necessary repairs made. The landlord has an obligation to keep the property in habitable condition and to carry out structural and installation repairs that are necessary. The tenant has the right to demand those repairs.

Right to non-discrimination. Law 93 expressly prohibits refusing to rent based on race, sex, marital status, nationality, age, political or religious beliefs, or having children. This protection applies both at the time of contracting and throughout the lease.

Right to have a new owner honor the existing lease. If the property is sold, the new owner is obligated to honor the existing lease agreement until the agreed term expires, provided the contract was registered with MIVIOT.

Right to return of the deposit. When the contract ends, the tenant has the right to the return of the security deposit held with MIVIOT, unless the landlord validly demonstrates unpaid rent or damage to the property beyond normal wear and tear.

The landlord rights the law also protects

Law 93 is not only protection for the tenant. It also establishes concrete rights for the landlord:

Right to collect the agreed rent. The landlord has the right to timely payment of rent under the terms agreed in the contract.

Right to initiate the eviction process for valid grounds. When the tenant defaults, the landlord has the right and the legal mechanism to recover their property by following the Article 45 process.

Right to claim damages to the property. If the tenant causes damage to the property beyond normal wear and tear, the landlord can claim that compensation before MIVIOT and withhold the corresponding portion of the security deposit.

Right to have the building's bylaws followed. If the contract includes the building's internal bylaws as part of the lease terms, the landlord can demand compliance with them.

What the landlord cannot legally do

Law 93 is explicit about actions that are prohibited for the landlord, regardless of what the contract says:

Cannot evict without an order from the competent authority. Changing locks, cutting off utilities, removing the tenant's belongings, or exerting any form of physical pressure to force them out are illegal acts that can lead to criminal and administrative penalties against the landlord.

Cannot raise the rent during the term of the contract without agreement. Once the contract is signed, the rent can only be changed during its term if there is an adjustment clause expressly agreed to from the start. A unilateral increase is illegal.

Cannot enter the property without the tenant's permission. Except in cases of genuine emergency, the landlord needs the tenant's consent to enter the property. Inspection visits must be coordinated in advance and with the tenant's agreement.

The eviction process in practice: how long it takes and what to expect

One of the most frequent questions from both landlords and tenants is how long an eviction process takes in Panama. The honest answer is that timelines vary significantly depending on the cause of the eviction, the workload of the Directorate General of Rentals, and whether the tenant files appeals or challenges.

For an eviction due to non-payment with clear documentation and no challenge from the tenant, the process can be resolved within two to four months. For more complex cases — with appeals, requests for suspension on humanitarian grounds, or disputes over the condition of the property — it can extend to six months or more.

For the landlord, that reality means prevention is far more effective than the legal process: checking tenant references before renting, having a well-drafted contract with clear clauses, and properly registering the deposit with MIVIOT significantly reduces the likelihood of ever needing the Article 45 process.

Modernizing Law 93: what's underway in 2026

Law 93 is more than fifty years old. Its original text was drafted in a market context radically different from today's, with $150 in rent as the relevant threshold and no consideration for digital rentals, short-term platforms, or corporate leases.

MIVIOT has a modernization of the law underway to adapt it to the 2026 market. Among the aspects the update seeks to address are regulation of short-term Airbnb-style rentals, digitization of the contract registration process, and more agile dispute-resolution mechanisms. As of this article's publication, that modernization process is in progress but has not yet produced a new law to replace Law 93.

For a landlord or tenant who needs to know the current state of their rights and obligations, Law 93 and its amendments remain the governing legal framework. Questions about specific cases can be made free of charge at MIVIOT's Directorate General of Rentals.

Frequently asked questions about Panama's rental law

Does a "Law 45 on rentals" exist in Panama?
Not as an independent law. The law that governs rentals in Panama is Law 93 of 1973. What does exist is Article 45 within that law, which specifically regulates the eviction and removal procedure. It's likely that searches for "Law 45" are actually referring to that specific article within Law 93.

How long does an eviction process take in Panama?
Between two and six months for most cases, depending on the cause, the complexity, and whether the tenant files challenges or requests for suspension. Simpler cases — non-payment with clear documentation — tend to be resolved at the lower end of that range.

Can a landlord change the locks if the tenant doesn't pay?
No. That action is illegal in Panama regardless of whether the tenant is in default. The landlord must follow the formal Article 45 process before MIVIOT to legally recover the property. Acting unilaterally can lead to administrative and criminal penalties against the landlord.

What happens to the deposit if the tenant ends the contract early?
It depends on the terms agreed in the contract. Law 93 establishes that the tenant can end the contract at any time with 30 days' prior notice. If that early departure caused the landlord financial harm — because the contract had a fixed term with a penalty — the landlord can claim that penalty before MIVIOT. The deposit can be withheld if valid grounds are proven.

Where can I get free consultations about renting in Panama?
MIVIOT's Directorate General of Rentals offers free legal guidance to landlords and tenants on contracts, conflicts, and claims processes. Their offices are in Panama City, and you can also check www.miviot.gob.pa for forms, contract templates, and registration steps.

A well-made contract is the best protection there is

Law 93 and its Article 45 exist to resolve conflicts when a lease goes wrong. But the best scenario for both parties is never needing those mechanisms at all.

A well-drafted contract, with all the legally required elements, duly registered with MIVIOT and with the deposit properly recorded, is the first and most effective line of protection for landlord and tenant alike. That document is what defines what each party expects, what happens if someone defaults, and how disputes are resolved without resorting to a formal process.

If the landlord checked the tenant's references before renting and the tenant read the contract before signing it, the likelihood of ever reaching Article 45 is minimal. And if a conflict arises anyway, both the law and MIVIOT offer the mechanisms to resolve it in an orderly way, with full guarantees for both parties.