On February 2, 2026, Representative Jhonathan Edir Vega of Circuit 4-5 presented Draft Bill No. 348 to the National Assembly president; it was subsequently designated Bill No. 554. His nine co-sponsors are Representatives Augusto Efraín Palacios Muñoz, Luis Henrique Duke Walker, Jamis Gaspar Acosta Guerra, Manuel Cohen Salerno, Lenín Alberto Ulate Rodríguez, Patsy Cristina Lee Rentería de Huang, Julio de la Guardia Arrocha, Gertrudis Rodríguez de Gracia, and Manuel Cheng. Originally assigned to the Public Infrastructure and Canal Affairs Commission, the draft was reassigned to the Commerce and Economic Affairs Commission, which adopted it on March 17, 2026.

Article 1 defines the bill's purpose: to comprehensively regulate the activities of developers, real estate firms, and construction companies; to strengthen buyer protections; to regulate common areas and infrastructure in residential and horizontal property projects; and to prevent, penalize, and remedy project abandonment, latent defects, and construction flaws. The competent authority for enforcement will be the Consumer Protection and Competition Defense Authority (ACODECO), coordinating with the Ministry of Housing and Territorial Planning (MIVIOT), the Ministry of Public Works (MOP), and the National Institute of Aqueducts and Sewers (IDAAN), pursuant to Article 4. The provisions are of public order and complement the latent-defect regime of the Civil Code and Law 284 of 2022 on horizontal property, in accordance with Article 5.

Chapter III establishes two mandatory financial guarantees: Article 10 requires every developer to obtain a construction insurance policy with minimum coverage of ten years from the date of delivery, protecting against latent defects and construction flaws in residential units, common areas, streets, water and sewer systems, and easements; and Article 11 requires the posting of a bond equal to 10% of the project's total value for the same period of validity. Both instruments must be disclosed in writing to buyers before the sales contract is signed, under penalty of administrative sanctions.

Chapter IX defines project abandonment as any unjustified work stoppage lasting more than six months, repeated failure to meet delivery schedules, or the developer's operational disappearance. Upon a declaration of abandonment, Article 51 authorizes the competent authority to intervene in the project, enforce the guarantees, appoint a temporary administrator, or authorize third parties to complete the work. Article 50 establishes that, before commencing sales of any project, the developer must post financial guarantees — bonds, insurance policies, or trusts — equal to 20% of the project's total value. Liability is joint and several among the developer, construction firm, project designer, engineer of record, supervising architect, and any party with a determining role in design, execution, or marketing, pursuant to Article 55.

The penalty regime, set out in Articles 40 through 47, establishes graduated fines for failure to remedy defects: B/. 5,000 to B/. 10,000 for minor non-compliance; B/. 10,001 to B/. 20,000 for moderate non-compliance; and B/. 20,001 to B/. 30,000 for serious non-compliance. Repeat-offense fines range from B/. 25,000 to B/. 40,000, and fines for deliberate concealment of information reach B/. 50,000. ACODECO may also impose supplementary sanctions: temporary suspension of commercial activities for up to six months, or disqualification from construction and sales for up to two years. Article 57 extends the liability period for latent defects and structural failures to a minimum of ten years from the effective and functional delivery of the project.

The Commerce and Economic Affairs Commission held the First Debate on April 27, 2026, and the bill advanced to Second Debate on April 29, 2026. With 39 pages and 61 articles, the initiative is the most articulated legislative response to date to complaints from residents of horizontal property developments who have suffered incomplete common areas, non-functional water systems, and developers who disappear after selling their units. Final approval would substantially raise warranty standards in Panama's real estate market, which is currently governed by Law 13 of 1993 and Law 284 of 2022.