Responsibilities of Horizontal Property Boards of Directors

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, as regulatory of Law 226 of June 8, 2021, which regulates the design and building 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 perform the appropriate periodic maintenance work of their buildings once the Permit or Certificate of Occupancy have been issued. This maintenance must include the condition of the structure (slabs, columns, masonry), windows and roofs, coatings, as well as access ramps, evacuation routes, stairs and handrails, among others.

It is also established in said regulation, that the Boards of Directors of the Horizontal Properties, as well as their owners and/or inhabitants of the property, shall also be responsible for the periodic maintenance of the electrical and mechanical systems and equipment, such as elevators or escalators, electrical generators, pool equipment, fire detection systems and fire alarms, firefighting systems (including the maintenance of fire extinguishers and sprinklers), lightning and gas systems, as well as air conditioning and extraction equipment and any other equipment in use within the building, with their certifications updated by the Fire Department of the Republic of Panama, if required.

It is important to note that according to Article 62 of Law 31 of June 18, 2010, which governs Horizontal Property in Panama, the Board of Directors shall be responsible for complying with and enforcing the decisions of the Assembly of Owners regarding the administration and conservation of the common property and shall 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 numbers 2 and 9 of article 72 of Law 31 of June 18, 2010, the administrator of the Horizontal Property has the obligation to:

1. To perform the ordinary and regular duties of administration and conservation, carry out those that were of urgency for the integrity of the horizontal property and undertake those ordered by the Assembly of Owners and,
2. To order the urgent repairs in the common areas of the horizontal property and in the private areas that affect other real estate unit.

Although it is true that according to Article 62 the Board of Directors is responsible for complying 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 become responsible for verifying that everything is in order within the Horizontal Property so as to immediately inform the Board of Directors of what is happening, not only for the service they render, which is paid with the share of common expenses contributed by all the owners, but also for the duty they have of watching over 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 his daily life.

It is worth to remind the owners of a Horizontal Property, how important it is to attend the meetings of Co-owners’ Assembly of their Building or Residential, so that they can express their opinions and assert their rights, as well as to comply with their duty and take the opportunity to qualify the work of the administrators, who should be hired not only for the amount of services they propose 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.