Responsibilities of the Boards of Directors of Horizontal Properties

Responsibilities of the Boards of Directors of Horizontal Properties according to Executive Decree 142 of July 9, 2021

Executive Decree 142 was issued on July 9, 2021, regulating Law 226 of June 8, 2021, regulating design and construction standards in Panama.

This legislation establishes and defines the responsibility of the Boards of Directors of Horizontal Properties, as well as their owners and/or inhabitants of the property, to carry out the appropriate periodic maintenance of their buildings once the Permit or Occupancy Certificates have been issued. This maintenance must include the state of the structure (slabs, columns, masonry), windows and ceilings, cladding, as well as access ramps, evacuation routes, stairs and railings, among others.

It is also established in said regulations that the Boards of Directors of the Horizontal Properties, as well as their owners and/or inhabitants of the property, will also be responsible for the periodic maintenance of the electrical and mechanical systems and equipment, as well as the elevators or escalators, electric generators, pool equipment, fire detection and alarm systems, fire systems (including the maintenance of extinguishers and sprinklers), lightning rod and gas systems, as well as air conditioning and extraction equipment and any other equipment that is in use within the building, with their certifications up to date before the Benemérito Cuerpo de Bomberos de la República de Panamá, if required.

It is important to note that in accordance with article 62 of Law 31 of June 18, 2010, which governs Horizontal Property in Panama, the Board of Directors will be responsible for complying with and enforcing the decisions of the Assembly of Owners regarding the administration and conservation of common property and will also have the functions and powers established in said article, which are not as specific as the responsibilities established in Executive Decree 142 of July 9, 2021 mentioned above.

However, and according to numerals 2 and 9 of article 72 of Law 31 of June 18, 2010, the Horizontal Property administrator has the obligation to:

1. Carry out the ordinary and current tasks of administration and conservation, carry out those that are urgent for the integrity of the horizontal property and undertake those ordered by the Assembly of Owners and
2. Order urgent repairs in the common areas of the horizontal property and in the private areas that affect another real estate unit.

While it is true that according to article 62 it is the Board of Directors that is responsible for complying with and enforcing the decisions of the Owners’ Assembly, it is important to emphasize that it is the administrators who, during the performance of their duties, are responsible for checking that everything is in order within the Horizontal Property in order to immediately inform the Board of Directors of what is happening, not only for the service they provide, which is paid for with the common expenses fee contributed by all the owners, but also for the duty they have to ensure the integrity of the co-owners and inhabitants of the Residential or Building, the latter with the sole purpose of ensuring that each owner has peace of mind in their day to day life.

It is worth reminding the owners of a Horizontal Property, how important it is to attend the meetings of the assembly of co-owners of their Building or Residential so that they can express their opinions and assert their rights, as well as so that they can fulfill their duty and take advantage of the opportunity to evaluate the work of the administrators, who should be hired not only for the number of services they offer or for what they charge, but for the experience they have, so that in the case of a specific situation they act with due diligence.